Tenants who are unhappy with the service charges they are asked to pay can apply to the First-tier Tribunal (FTT) for a determination of their liability to pay service charges. Recently, a tenant who made such an application succeeded in achieving reductions to her service charges, despite the FTT concluding that most of the charges were reasonably incurred.
The tenant held a long lease of a ground-floor studio flat in a block of five flats. The lease required the landlord to provide services and obtain insurance and the tenant to contribute a ‘fair and reasonable proportion’ towards those costs by way of a service charge, which the landlord had determined to be 20 per cent of the total costs incurred. The tenant applied to the FTT under Section 27A of the Landlord and Tenant Act 1985 for a determination of liability to pay service charges in respect of the 2017/18 to 2024/25 service charge years.
The tenant alleged that she had been disproportionately charged, having regard to the limited area occupied by her flat. She asserted that the FTT should not consider the service charge items individually but should look at the ‘bigger picture’ and relate them to the value and surface area of her property.
The FTT noted that it was required to look at the terms of her lease to establish what she was contractually bound to contribute. Overall, the FTT preferred the landlord’s evidence, which demonstrated that the costs had been properly incurred in accordance with the terms of the lease; the works had been carried out; and they were of a reasonable standard and cost.
However, the FTT determined that the management fee for the 2022/23 service charge year should be reduced to the amount charged previously. The FTT also found that fees for cleaning of bins in the 2020/21 to 2022/23 service charge years had not been reasonably incurred and disallowed them in full. Fees relating to two failed building network operator visits were also disallowed.