Landlord and tenant – Service charge – Demands – Appellant disputing liability for service charges from 2001 and seeking reimbursement of sums paid – Respondent landlord claiming unpaid charges – Service charge demands giving name of freeholder not respondent – Whether parties reaching binding agreement on appellant’s service liability for period to June 1009 – Section 47 of Landlord and Tenant Act 1987 – Whether service charge demands issued by respondent complying with statutory requirement to give name and address of “the landlord” – Appeal allowed in part
The appellant was the long leaseholder of a flat in a building in London W11. Her immediate landlord was the respondent, a company owned and controlled by the owners of the flats. The respondent had originally been a party to the underleases as the management company responsible for providing services to the flats, but it had subsequently been granted a headlease of the reversion to the occupational underleases.
In May 2013, the appellant applied to the leasehold valuation tribunal for a determination, under section 27A of the Landlord and Tenant Act 1987, of her liability for service charges for the years 2001 to 2010. She sought reimbursement of all the service charges that she had paid in the period from January 2001 to at least June 2007. A claim by the respondent for service charges payable from December 2011 was also transferred from the county court to the first-tier tribunal (FTT) so that it could be heard with the appellant’s application. The appellant’s primary contention was that she was not liable to pay the sums demanded by the respondent since the demands, by giving the name of the freeholder and not the respondent, did not comply with the requirement in section 47 of the Landlord and Tenant Act 1985 to give the name and address of “the landlord”.
The respondent contended that the appellant’s liability for service charges from January 2001 to June 2009 was governed by a compromise agreement reached in 2009, which settled the appellant’s liability for the whole of the period up to June 2009. The appellant disputed that any such agreement had been made or, alternatively, that the agreement only to the period from June 2007 to June 2009.
Finding in favour of the respondent, the FTT held that: (i) the requirement to include the name and address of the landlord in demands served by a landlord did not apply to the respondent, which was a party to the appellant’s lease in its capacity as manager; and (ii) a binding agreement had been reached in 2009 settling the appellant’s liability for the whole of the period up to June 2009. The appellant appealed.
Held: The appeal was allowed in part.
(1) For the purpose of the appeal, the parties had produced all the relevant correspondence leading up to the 2009 compromise. The correspondence showed that the parties agreed they had reached a settlement but disagreed as to the period to which it related. From the correspondence as a whole, it was apparent that the appellant had offered a sum in full and final settlement of all of her liability for service charges. Although the correspondence seen by the FTT only referred expressly to the period from June 2007 to June 2009, namely the period of appointment of the managing agent which was engaging in the correspondence, the agent was not by then suggesting that there were outstanding sums pre-dating its management.
Even if that were wrong, the FTT had still correctly concluded that it had no jurisdiction to consider service or administration charges pre-dating June 2007. Any such charges were affected by section 27A(4) of the Landlord and Tenant Act 1985, barring any application to the FTT in respect of a service charge, which had been agreed or admitted by the tenant. Although, by section 27A(5), a tenant was not to be taken to have agreed or admitted any matter by reason only of having made any payment, in the circumstances of the instant case the appellant had admitted her liability by making the payments she did before the managing agent took over management, and by subsequently settling the charges due after it commenced its management, without claiming a credit for sums previously paid. It followed that the appellant’s liability for service charges pre-dating June 2007 was the subject of agreement and was not capable of being challenged by the appellant under section 27A of the 1985 Act.
(2) By virtue of section 60(1) of the 1987 Act, the word “landlord” in section 47 meant the immediate landlord. Section 47 had no application to demands for payments of sums due to parties to leases who were not landlords within the meaning of the section 60 definition: Pendra Loweth Management Ltd v North [2015] UKUT 91 (LC); [2015] PLSCS 105 applied. It was not possible to construe section 47 as intended to include demands by management companies. It could not be said that parliament had intended, but had simply failed by inadvertence to make clear, that a management company should be included within the meaning of “landlord” in cases where the management company was responsible for the delivery of services and was entitled to receive service charges. Parliament did not have any such obvious purpose in mind when enacting the 1987 Act.
However, the respondent had become the appellant’s immediate landlord by reason of the grant to it of a headlease of the whole building subject to the appellant’s occupational underlease. It followed that the respondent’s name and address had to be included in any demand for service charges. That point had not been raised before the FTT. The absence of the respondent’s name and address from the service charge demands was not rectified by the form of invoices used by the respondent’s new managing agent, which had given the names and addresses of both the respondent and its agent. It would be unclear to anyone unfamiliar with section 47 whether either of those companies was being identified as the landlord. The statutory requirement was not simply that the name and address of the landlord should appear on any written demand. The tenant had to be informed of the name and address of the landlord. A demand, which provided the name and address of two or more different companies, without identifying which was the landlord, did not provide the required information. It followed that the sanction in section 47(2) of the 1987 Act applied to the demands given by the new managing agent and that the service charges claimed in the county court proceedings as being due from December 2011 had not been shown to have been due when those proceedings commenced.
(3) That did not mean that the respondent had to serve further demands for all of the charges claimed from June 2009 onwards. The effect of section 47(2) was suspensory only, in that any service charge or administration charge was treated as not being due from the tenant to the landlord “at any time before the information is furnished by the landlord by notice given to the tenant”. All that was required to satisfy the statutory requirement was for a notice to be given to the appellant informing her that the respondent was her landlord and giving its address. It was not necessary for all the previous service charge demands to be re-issued. From the time at which such a notice was given, the service charges would be treated for all purposes as being due from the appellant to the respondent.
Justin Bates (instructed by Brethertons LLP) appeared for the appellant; Brynmor Adams (instructed by PDC Legal) appeared for the respondent.
Sally Dobson, barrister
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