Tenants have been served a warning not to procrastinate when it comes to challenging the reasonableness of service charges.
The Upper Tribunal (Lands Chamber) (“the UT”) ruled that the lessee of a London flat had paid his service charge without protest and waited years to challenge it, meaning he had agreed or admitted the amounts claimed by landlord the London Borough of Islington.
In a preliminary ruling, the UT found that Peter Cain cannot challenge service charges claimed by his landlord in respect of the years 2002/2003 to 2007/2008 – albeit for slightly different reasons than the First-tier Tribunal (Property Chamber) (“the F-tT”).
Though the F-tT found that a six-year limitation period applied, the UT concluded that that was not the case. However, it dismissed Cain’s appeal on the basis that he had “agreed or admitted” the level of service charge claimed by landlord the London Borough of Islington in respect of those years.
As a result of this preliminary decision, Cain will only be able to challenge his service charge from 2008/2009 up to 2012/2013.
Judge Nigel Gerald found that the F-tT had been entitled to find that the appellant had agreed or admitted the service charge items in respect of the 2001/02 to 2006/07 period he sought to challenge.
He said: “In my judgment, the F-tT was entitled to so find based purely upon the series of payment in respect of the demanded service charge throughout this six year period, and subsequently, without reservation, qualification or other challenge or protest. That of itself is sufficient. The is, however, reinforced by the sheer length of time which has elapsed before challenge was first made – between eight years in respect of the 2006/07 service charge and 12 years for the 2001/02 service charge.”
“Whilst distinctions can be made between the nature of the different service charge items being challenged, the F-tT is entitled to look at matters in the round and find that where there has been substantial delay in making any challenges to the items now in dispute, and most if not all of which have long-since been paid, that the tenant has agreed or admitted the amounts claimed which, after all, have long-since lain dormant without challenge.”
He added that it is no bar to such a finding that a particular act or date for agreement or admission could not be pointed to, because it is “inherent in the nature of the facts and circumstances (inactivity; payment without qualification for a long time) that it is not possible to pinpoint any particular date upon which the agreement or admission was or should be treated as having been made”.
The F-tT had also found that the claim in respect of those years was statute barred, treating it as a claim for re-payment of service charge in respect of which a six-year limitation period applies, under section 8 of the Limitation Act 1980.
But the judge said that the application to the F-tT is a claim for determination as to the reasonableness of the service charge made under section 27A of the Landlord and Tenant Act 1985, and so the usual 12-year limit applies.
Cain v London Borough of Islington Upper Tribunal (Lands Chamber) (Judge Nigel Gerald) 25 September 2015
Amanda Gourlay for the appellant
Miss Karmel for the respondent
