Landlord and tenant – Service charges – Section 47 of Landlord and Tenant Act 1987 – Respondent tenant failing to pay service charges – Appellant landlord seeking determination of liability – First-tier Tribunal finding in favour of respondent – Appellant appealing – Whether notices demanding payment complying with statutory requirements – Appeal allowed
In 2008, the appellant purchased the freehold of Snowshill Place, London, a purpose-built block of 17 flats. The respondent was the tenant of flat 6, which he held under a 125-year lease granted by the appellant’s predecessor in 2006. The lease contained obligations on the part of the tenant to pay service charges and ground rent. The respondent had not paid the sums demanded for the years 2012 to 2017, and the appellant applied to the First-tier Tribunal (FTT) seeking a determination as to the respondent’s liability to pay service charges pursuant to section 27A of the Landlord and Tenant Act 1985.
The FTT decided that the service charges for those six years were not payable by the respondent because, although they were properly served on the respondent, they neither complied with section 47 of the Landlord and Tenant Act 1987, nor contained the information prescribed by section 21B of the 1985 Act; the property was not insured in the appellant’s name and therefore sums charged for insurance were not payable in any event; the sums charged for management of the building were to be reduced, because of poor management, to £200 per annum (from the sums of just over £300 demanded in each year); section 20C of the 1985 Act applied; and costs of £1,300 were payable by the appellant to the respondent pursuant to rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The appellant should have made itself aware of the “fundamental flaws” in its application in relation to section 47 of the 1987 Act and to the insurance problem.
The appellant appealed against the finding that the content of the notices was not compliant with the statutory requirements. If the appellant succeeded on that ground, the tribunal was asked to consider whether section 20C of the 1985 Act applied and the decision in relation to costs. The appeal was determined on written representations.
Held: The appeal was allowed.
(1) Under section 47 of the 1987 Act, a written demand given to a tenant had to contain the name and address of the landlord. If the landlord’s address was not in England and Wales, an address within the jurisdiction had to be provided at which notices might be served on the landlord by the tenant. When a written demand contained more than one name and address of a company, the demand had to expressly identify which of the two was the landlord for the purposes of section 47. There was no case law to the effect that section 47 required any indication, in the service charge demand, that the name and address given were the name and address of the landlord (except in circumstances where more than one name and address was given, in which case an indication was needed to avoid confusion): Beitov Properties Ltd v Martin [2012] UKUT 133 (LC); [2012] 3 EGLR 21 and Terhas Tedla v Camaret Court Residents’ Association Ltd [205] UKUT 221; [2015] EGLR 50 (LC) considered.
In Terhas, the deputy president said that the statutory requirement was not simply that the name and address of the landlord had to appear on any written demand. The tenant had to be informed of the name and address of the landlord, hence the requirement that “the demand had to contain the following information”. A demand which provided the name and address of two or more different companies without identifying which of them was the landlord did not provide the required information. The tenant was not to be left to guess which of two or more parties was the landlord, but was to be informed of the landlord’s identity. There was no indication that where there was only one name and address given the tenant was to be told that they were the name and address of the landlord. The information was clear whether or not the tenant happened to be familiar with section 47 of the 1987 Act. In the circumstances of the present case, the FTT’s finding on section 47 of the 1987 Act was not open to it and could not reasonably have been made on the evidence before it. The appeal would be upheld on that point. The service charge demands complied with the statutory requirements and therefore the service charges for each of the six years were payable, subject to the reductions made by the FTT.
(2) In the presence of evidence, in the form of disclosed documents, that the summary had been provided to the respondent for the purposes of section 21B of the 1985 Act, and in the absence of any evidence to the contrary, the FTT could not reasonably have made its finding about section 21B.
(3) In the light of the tribunal’s findings on the appeal, there was no justification for the FTT’s order that section 20C should apply. Nor could there be any justification for the award of costs against the landlord; the reason given for that award was that the appellant should have been aware of the weakness of its case under section 47 and in connection with the insurance policies (which the FTT disallowed from the service charge because the policy had not been in the appellant’s name). The point about section 47 fell away, and the appellant’s mistake about the insurance policy did not justify a finding that it behaved improperly, unreasonably or negligently, as would be required before a costs order could be made under rule 13. Accordingly, the FTT’s order that section 20C applied, and its costs order, would be set aside.
Eileen O’Grady, barrister
Click here to read a transcript of Westlake Estates Ltd v Yinusa
