The First-tier Tribunal has jurisdiction to determine whether service charges are reasonable and payable under section 27A of the Landlord and Tenant Act 1985. The FTT’s jurisdiction is circumscribed by section 27A(4). In particular, section 27A(4)(a) provides that no application can be made to the FTT for a determination in respect of a matter that has been agreed or admitted by the tenant.
In Triplerose Ltd v Bowles and others [2022] UKUT 214 (LC), the appellant freeholder argued, on appeal, that the FTT had exceeded its jurisdiction in finding that only 50% of the costs incurred for cleaning and management fees for the block were reasonable and payable for the service charge years 2014 to 2019.
Bridge Court, Lea Bridge Road, London E10 was a development consisting of two blocks of flats containing 24 flats. The respondents were the leaseholders of both blocks. Situated between both blocks was a car park that was available for public use on payment of a fee to the freeholder.
Under the terms of the respondents’ leases they were obliged to pay a service charge to the freeholder for services provided. Under section 27A the lessees applied to the FTT seeking a determination of the reasonableness and payability of service charges incurred by the landlord for cleaning, management services and the provision of CCTV for the car park.
In their statement of case the lessees had disputed the entirety of the costs incurred for the provision of CCTV. In respect of the cleaning and management fees the lessees only disputed a third of the costs incurred for cleaning and management fees.
The FTT determined that only 50% of the costs incurred for the provision of CCTV were reasonable and payable. There was no specific evidence provided by the appellant that the CCTV was working frequently and that good use was made of it. Yet, without explanation, the FTT found that only 50% of the service charges for the cleaning and management costs were reasonable and payable.
The Upper Tribunal (Lands Chamber) upheld the FTT’s determination in respect of the CCTV, but set aside the FTT’s decision in relation to the cleaning and management fees for the period in dispute. On appeal, the lessees argued that by virtue of section 27A(4) and the admissions made by the lessees, the FTT’s finding that they were only liable to pay 50% of the service charges in respect of cleaning and management fees was wrong. The UT agreed. It found that the FTT had no jurisdiction to reduce the service charges payable below the sum that had been admitted by the lessees in light of section 27A(4).
Elizabeth Dwomoh is a barrister at Lamb Chambers
