Automated Summary
Key Facts
The case CHI/24UD/LSC/2021/0085 involves a tenant, Eyitope Akingbade Oyolola, challenging service charges for the years 2020/2021 and 2021/2022 from Trinity (Estates) Property Management Company Limited. The Tribunal determined that the applicant is required to pay a service charge for 2020/21 of £1540.43 (the estimated sum) plus £378.73 (balancing charge); plus for 2021/2022 a service charge of £1619.06 (the estimated sum). The Tribunal also allowed the applicant's applications under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, thus precluding the Respondent from recovering its costs in relation to the application by way of service charge or administration charge.
Issues
- The Tribunal found that the Respondent failed to comply with the RICS Code requirement that 'All service charge demands should be clear, easily understandable, relate to available budget estimates or actual accounts and be served in accordance with the lease.' The Respondent's confusing accounting practices, particularly regarding the Tomlin Order sums, were cited as the main reason for this failure.
- The Tribunal found that the Respondent incorrectly treated the Tomlin Order sums as separate service charge demands, failing to clarify that they were part of a global sum. This led to significant confusion for the Applicant, who repeatedly requested clarification that was not provided.
- The Tribunal found that the Respondent had wrongly charged the Applicant for legal costs in the sum of £3,600, which only came to light after the Applicant started the proceedings. The Tribunal ruled that these costs should not be considered relevant costs for service charges.
- The Tribunal allowed the Applicant's application under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, ruling that the Respondent's costs in relation to the application were not to be regarded as relevant costs to be taken into account in determining the amount of service charges for current or future years.
- The Tribunal determined the reasonableness of service charges for the years 2020/2021 and 2021/2022, finding that the Applicant was required to pay a service charge for 2020/21 of £1540.43 (the estimated sum) plus £378.73 (balancing charge), plus for 2021/2022 a service charge of £1619.06 (the estimated sum).
Holdings
The Tribunal determined that the Applicant must pay service charges of £1540.43 (estimated sum) plus £378.73 (balancing charge) for 2020/21, and £1619.06 (estimated sum) for 2021/2022, with no other charges due except for potential administration charges for future non-timely payments or balancing charges for finalized 2021/2022 accounts. The Tribunal also allowed the Applicant's applications under Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, precluding the Respondent from recovering its costs in connection with the proceedings through service charges or administration charges.
Remedies
- The Tribunal allows the Applicant's application under Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002, so that the Respondent's costs incurred in connection with the proceedings are not to be regarded as relevant costs to be taken into account in determining the amount of any administration charge payable by the Applicant.
- The Tribunal determined that the Applicant is required to pay a service charge for 2020/21 of £1540.43 (the estimated sum) plus £378.73 (balancing charge); plus for 2021/2022 a service charge of £1619.06 (the estimated sum). No other charges are due from him, save for any administration charge in the event of future non-timely payment and any balancing charge when the accounts are finalised for 2021/2022.
- The Tribunal allows the Applicant's application under Section 20C of the Landlord and Tenant Act 1985, directing that the Respondent's costs in relation to the application are not to be regarded as relevant costs to be taken into account in determining the amount of service charge for current or future years.
Legal Principles
The Tribunal applied Section 20C of the Landlord and Tenant Act 1985 and Paragraph 5A of Schedule 11 Commonhold and Leasehold Reform Act 2002 to determine that the Respondent's costs incurred in the proceedings should not be regarded as relevant costs for service charges or administration charges. The Tribunal found the Respondent's accounting practices to be confusing and unreasonable, and it was unjust for the tenant to bear these costs.
Precedent Name
- SCMLLA (Freehold) Limited
- Redrow Regeneration v Ryan Edwards
- Avon Ground Rents Ltd v Child
- Conway v Jam Factory Freehold Limited
- James Scicluna v Zippy Stitch Ltd & Ors
- Tenants of Langford Court v Doren Ltd
- Arnold v Britton
Cited Statute
- Landlord and Tenant Act 1985
- Leasehold Reform Housing and Urban Development Act 1993
- Commonhold and Leasehold Reform Act 2002
Judge Name
- Judge A Cresswell
- Mr K Ridgeway
Passage Text
- Respondent failed to comply with RICS Code requirements for service charge demands
- Tribunal determined service charge amounts for 2020/21 and 2021/22
- Tribunal allows applications under Section 20C and Paragraph 5A