A residential developer has issued a claim seeking high court backing for the average £4.50 per sq ft service charge it levies on its tenants in Canary Wharf.
Singapore-based Canary Riverside Developments, the landlord of a luxury residential and hotel scheme in London’s Docklands, levies a total charge of £2.2m pa.
The company is seeking a declaration from London’s high court that the Leasehold Valuation Tribunal has no jurisdiction to determine the charge’s fairness, after residents Christopher and Joan Schilling went to the tribunal to challenge the spiralling charges in January.
The Schillings, who have a 999-year lease on a two-bedroom apartment at Eaton House in Canary Riverside, pay more than £6,000 pa in service charges. They claim that, between April 2002 and March 2003, charges at the 325-flat complex rose to around £2.2m in total, from £1.7m the previous year. According to local residents, the charge is almost twice that of neighbouring developments.
Although the tribunal has yet to make a decision, Canary Riverside is now seeking a declaration that the charges are not “unfair” under regulations dealing with consumer contracts. It claims that the tribunal does not have jurisdiction to determine the “fairness” of the charges under the regulations.
Simon Scott-Barrett, property management partner at Cluttons, said: “While a 30% increase might seem like quite a lot, the court or tribunal will decide whether it is fair when they have all the facts before them. Overall, average running costs of buildings are much more than people realise.”
He added: “Wider debate is needed as to what an annual average charge should be.”
References: EGi Legal News 01/11/04
