The Court of Appeal in London has backed Bath-based housebuilder and social housing provider Curo Places Ltd in a £1m dispute with a resident over gardening services.
The dispute concerns Curo’s 2017 decision to add a charge for maintenance of the grounds to the service charge.
The dispute was brought by a resident of a one-bedroom bungalow on a Bristol sheltered accommodation housing scheme run by Curo. The resident objected to being charged £1.50 per week for the service and sued the company in the First-tier Tribunal, arguing that the tenancy agreement did not allow it.
However, the true cost to the company is much larger than it might seem.
“Although the amount involved in this case is small, we are told that the same issues arise in over 3,400 other tenancy agreements, as regards properties on the same and other housing schemes of which the appellant is the landlord,” Lord Justice David Richards said in his ruling, handed down yesterday (1 December).
“We are told that the overall financial impact is in excess of £300,000 pa and will amount cumulatively, as at the end of the appellant’s current financial year on 31 March 2021, to nearly £1.16m,” he said.
The dispute itself centres on the wording on the tenancy agreement which sets out the service charge, specifically the second clause which states:
“The Trust agrees to provide the Services (if any) listed in the Tenancy Agreement and for which you pay a service charge providing that, subject to consultation with tenants:
(i) the Trust may stop providing any of the Services if it reasonably believes it is no longer practicable to do so; or
(ii) provide the same service in a different way; or
(iii) it may provide extra Services if it believes this would be useful.”
Before 2017 the landlord maintained the grounds but didn’t pass the cost on to tenants via the service charge. The lower tribunals agreed that the tenancy agreement therefore didn’t allow a charge to be added because “the addition of the extra service must be something which can 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”, the ruling said.
The tribunals found that the landlord “being able to charge money for something it was not previously charging money for” does not fulfil the definition of “useful”.
However, the Court of Appeal disagreed, with judge Richards J saying that he did not think it was a “plausible” reading of the disputed clause.
The residents have agreed to pay a service charge based on the services provided to them, the judge said.
“Once it is accepted that, by operating clause 2.10.1, the landlord can add extra services to those that it is obliged to provide, it follows that they will be included in ‘the services’ by reference to which the annual service charge is to be calculated.”
Any change, he said, does not require the tenant’s agreement.
“For these reasons, I am unable to agree with the decisions of the tribunals below, and I would accordingly allow the appeal,” he said.
The court sent the case back down to the lower tribunal for further consideration.
Curo Places Ltd v Anthony Pimlett – [2020] PLSCS 217
Court of Appeal (David Richards LJ, Hickinbottom LJ, Andrews LJ), 1 December 2020
Christopher Baker (instructed by Anthony Collins Solicitors LLP) appeared for the appellant; Justin Bates and Miriam Seitler (instructed by SouthWest Law) appeared for the Respondent
