Flat 14 Oak Close, Gospel Oak, Tipton, DY4 0AY (Leasehold disputes (management) - Service charges) -[2019] UKFTT RP_BIR_00CS_LIS_2018_0011- (24 January 2019)

Key Facts

Issues

• The Respondent sought an order to prevent the Applicant from recovering the costs of this application via service charge. The Tribunal directed, under section 20C of the 1985 Act, that the costs should not be added to the service charge, citing the Applicant's defective demands and failure to meet lease requirements as the basis for its decision.
• The Applicant unilaterally increased the Respondent's share from 1/31st to 1/24th and 1/20th without a formal application under section 35 of the Landlord and Tenant Act 1987. The Tribunal ruled that such modifications require a section 35 application and since none was filed, the increased shares were not lawful, rendering the demands defective.
• The Respondent contested the reasonableness of certain charges, including management fees and emergency lighting costs prior to installation. The Tribunal found the Applicant's approach to calculating the 1/8 share for the building 'wholly unclear' and rejected the Applicant's argument that the lease did not require itemized cost breakdowns, concluding the notices were defective for failing to specify the Respondent's contribution.
• The Respondent argued that the service charge demands did not comply with the lease terms, particularly regarding the changing proportions of the Respondent's share from 1/31st to 1/24th and later 1/20th. The Tribunal found the Applicant failed to serve estimates of expenditure as required by the lease and that the demands were defective under s20B(2) of the 1985 Act due to lack of clarity and failure to specify the Respondent's contribution.

Holdings

• The Tribunal directed that the costs incurred by the Applicant in the proceedings shall not be added to the service charge, pursuant to section 20C of the Landlord & Tenant Act 1985.
• The Tribunal dismissed the Applicant's application for a determination of liability to pay service charges, finding that the demands were defective and lacked proper compliance with lease terms.

Remedies

• The Tribunal directed that costs related to proceedings shall not be added to the service charge under section 20C of the Act of 1985.
• The application was dismissed, and costs were directed not to be added to the service charge.

Legal Principles

Precedent Name

• Bretby Hall Management Company Ltd v Pratt
• Freeholders of 69 Marina v Oram
• Barrett v Robinson
• Brent LBC v Shulem B Association Ltd

Cited Statute

• Landlord and Tenant Act 1985
• Landlord and Tenant Act 1987

Judge Name

Passage Text

• The Tribunal finds that the Applicant's approach to identifying sums said to be owed by the Respondent are wholly unclear and are not recoverable by reason of that lack of clarity.
• Further, and in the light of the findings above, the Tribunal also concludes that it would be appropriate to direct, pursuant to section 20C of the Act of 1985, that the costs shall not be added to the service charge.
• The Tribunal finds that there is no evidence of any lawful variation of the terms of the lease to reflect the increase in share of the Respondent; and, in the absence of an application pursuant to section 35 Landlord and Tenant Act 1987, the Tribunal is unable to adopt the practical course suggested by Mr Beaumont. Accordingly it is clear that the Applicant had no entitlement to seek the increased share it did, either by the historical increase to 1/24th or, more recently, 1/20th in respect of the 'Mansion'.