Landlord and tenant – Service charges – Sheltered housing scheme – Landlord maintaining grounds of property although not required to do so under lease – Appellant housing association taking over as landlord and seeking to impose charge for ground maintenance – Issue arising as to proper construction of tenancy agreement – Whether appellant entitled to add and charge for ground maintenance as “extra” service despite ground maintenance already being provided – Appeal dismissed
The respondent held 30, Sherwood Close, Keynsham, Bristol upon a weekly assured tenancy which arose pursuant to a tenancy agreement dated 18 August 2008. The property was a self-contained one-bedroom bungalow within a sheltered housing scheme for older persons and persons with disabilities which had open grounds including areas of lawn with mature trees. The landlord under the tenancy agreement was SHT. The appellant was a housing association formed in 2012 following the amalgamation of three housing associations including SHT.
The appellant sought to charge the respondent for services referred to as clearance, communal grounds maintenance, management charge and tree maintenance. The document which enclosed the breakdown of the proposed charge to the respondent showed that of the total charge, the communal grounds maintenance made up £7150 out of a total of £7560.
The appellant’s case was that the appellant, or its predecessor, as landlord was carrying out ground maintenance; there was no obligation imposed upon the landlord to do so; the landlord had no right to charge the cost of ground maintenance through the service charge which was recognised as a problem in 2009-2010; for tenancies granted from 2010 onwards the wording was changed to require the tenants to pay a contribution by way of service charge towards ground maintenance; no change was made for existing tenants (such as the respondent) such that they continued not to pay any service charge in respect of ground maintenance; but in due course the appellant decided to operate a clause in the tenancy agreement which entitled it to commence thenceforth to charge the respondent a service charge in respect of ground maintenance.
The First-tier tribunal (FTT) decided that the appellant as landlord was not entitled to recover the extra charge since “extra” services meant services from which tenants had not previously benefited. The tribunal took the view that a reasonable person would struggle with the notion that a service that had been provided for years without charge was somehow an “extra” service because it had been added to the list of services for which there would in future be a charge. The appellant appealed.
Held: The appeal was dismissed.
(1) Under the tenancy agreement as entered into, the landlord was not obliged to maintain the grounds; nor was the tenant obliged to contribute towards the costs of ground maintenance. At the date of the grant of the tenancy agreement, the bungalow let to the respondent was part of a sheltered housing scheme and was set within substantial garden grounds which were properly maintained by SHT as a responsible social landlord. Accordingly, the tenancy was granted in circumstances where both landlord and tenant knew that the grounds were maintained by the landlord and there was nothing to indicate any prospect of alteration in that position. The tenancy agreement made no provision for payment by the tenant of a service charge towards the landlord’s costs of maintaining the grounds.
(2) Under clause 1.4.1, the only matters to be charged for by way of service charge were services with specific charges listed in the particulars of tenancy which did not include ground maintenance. The only route by which the appellant landlord could charge for ground maintenance was if it was entitled pursuant to clause 2.10.1(iii) to add ground maintenance to the list of services to be charge for. The respondent could only operate the clause for that purpose if ground maintenance could properly be said to be extra services which would be useful. The word extra there meant extra to services that as a matter of fact were being provided by the appellant prior to the purported reliance upon clause 2.10.1(iii). That was the natural meaning of the words.
The addition of the extra service had to be something which could properly be believed to be of some use (or benefit) so as to make the post-addition position on the estate better than the pre-addition position. However, on the facts of the present case, the pre-addition position (i.e. prior to the purported exercise of clause 2.10.1(iii)) was exactly the same as regards ground maintenance to the post-addition position. There was no way in which the operation of the clause could be said to be useful save only that the appellant would be able to charge money for something it had not previously charged for. A financial benefit of that kind to the appellant was not contemplated by the word “useful”.
(3) Subparagraph (iii) merely stated that the landlord “may” provide extra services. If that provision was operated, although the landlord was entitled to provide the services, it was not obliged to do so. Accordingly, those services, supposing they had properly been introduced as constituting “extra” services, would be services which stood in a different position from those which the landlord had actually contracted to provide. Those services were not of a type which it was contemplated should be paid for having regard to clause 1.4.1. Therefore, the appellant was not entitled pursuant to clause 2.10.1(iii) to add ground maintenance as an extra service for which a charge could be made.
(4) The overall purpose of the tenancy agreement was to grant the respondent a tenancy of a bungalow in attractive garden grounds which could be expected to be kept maintained (rather than be allowed to become neglected and overgrown) by the landlord. Those were the facts and circumstances known or assumed by the parties when the tenancy agreement was executed. There was nothing inconsistent with commercial common sense for the respondent to be taking a tenancy of a bungalow in maintained grounds in circumstances where, although there was no contractual obligation on the landlord, the landlord was a responsible provider of sheltered accommodation and could be expected to continue to maintain the grounds without further charge to the tenant. The proper construction of the tenancy agreement could not be affected by events which occurred after the making of the agreement.
Christopher Baker (instructed by Anthony Collins Solicitors LLP, of Birmingham) appeared for the appellant; the respondent appeared in person.
Eileen O’Grady, barrister
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