Landlord and tenant – Service charge – Terms of lease – Respondent tenant disputing service charge payable to appellant landlord in respect of flat – Tenancy agreement providing for payment of service charge in respect of services but no such services in fact listed in agreement – Whether failure to specify services having effect that no service charge payable – Whether relevant services to be inferred from course of dealing between parties – Appeal allowed
The respondent was the tenant of a one-bedroom flat in a seven-storey block on a modern development in Cardiff. The tenancy had originally been granted by the appellant housing association to the respondent’s mother in July 2006, but had been assigned to the respondent in 2014 with the appellant’s consent. The tenancy agreement, which granted a weekly tenancy, was on a standard printed form with space for details to be added. It set out a list of payments to be made, including the rent and an initial service charge of £14.60, which the landlord could increase or decrease by giving four weeks’ notice in writing to the tenant. In its general terms, the tenancy agreement stated that the tenant was to pay a service charge for “the following services in connection with the premises”; that statement was followed by a blank space in which the relevant services could be listed, but it had not been filled in.
When the respondent took over the tenancy in 2014, the licence to assign and the deed of assignment were accompanied by another document, which, without any introductory explanation, set out a list of services including ground maintenance, communal cleaning, gate and door entry systems, fire alarm, CCTV and TV aerial and satellite system.
The respondent initially paid the service charges demanded by the appellant. However, about a year after taking over the tenancy, she received a notice specifying a revised amount payable with effect from August 2015. Although that figure was incorrect, the appellant later sent a revised notification correcting the amount of the service charge to £12.92 per week.
The respondent made an application to the leasehold valuation tribunal (LVT), under section 27A of the Landlord and Tenant Act 1985, in which she disputed her liability for the revised service charge. She asserted that the service charge was extremely expensive in general and she took issue with certain specific items.
The LVT determined that no service charge was payable because, although the tenancy agreement apparently required the payment of such a charge, it failed to identify the services which were to be provided. The LVT went on to decide that, had a service charge been payable, a charge of £11.10 per week would have been reasonable. The appellant appealed.
Held: The appeal was allowed.
The absence of a list of services did not appear to have created any difficulty in practice. While the building was new in 2006, and it might not then have been possible to point to services already being provided to other tenants, it was apparent that an assessment had been made of the charge that was to be levied. Since the landlord was a housing association, it could fairly be inferred that the stated figure of £14.60 was based on an estimate of the costs of providing specific services. Accordingly, at the commencement of the tenancy there must have been a list of services that were intended to be provided and to be paid for by the tenant. At any time between the commencement of the tenancy in 2006 and its assignment to the respondent in 2014, details of the services to which the charge related could have been requested. It was indisputable that service charges had been costed, delivered and paid for during the period of eight years before the assignment to the respondent. The nature of those services was therefore capable of being ascertained.
When the respondent took an assignment of the tenancy in 2014, she took over the obligations of the original tenant and, by the terms of the licence to assign, she had also agreed directly with the appellant that she would observe all the terms and conditions of the tenancy. Had anyone asked at that point what the terms and conditions of the tenancy were in relation to the payment of a service charge, there could have been no possible ambiguity. The practice of the parties over the previous eight years provided a continuous record of the services rendered to tenants of the flats in the building and of the sums charged for them. The respondent had the means of knowing, by enquiry, what the services were, and had agreed to be bound by the terms of the tenancy agreement, including the obligation to pay for services. The only inference that could be drawn from her payment of the service charge over a period of one year was that she was content to pay for the services that had been taken into account by the housing association when it calculated the weekly figure.
In those circumstances, the LVT had been wrong to conclude that no service charge was payable. The initial ambiguity over the services to be provided had been filled by the course of dealings over the years, both before and after the assignment, and by the express agreement of the respondent to pay the inclusive weekly rent at the time when she entered into the licence and was provided with the schedule of services.
Gwydion Hughes (instructed by Blake Morgan LLP, of Cardiff) appeared for the appellant; the respondent appeared in person.
Sally Dobson, barrister
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