Friday, 6 September 2019

Service Charge Challenges: Escape from Landlord's costs

That's enough time off. Put down the ice cream cones and get on with some serious litigation. 

Although some of my best friends are residential landlords (to be honest, I am anti-social), they and their managing agents do know how to load the service charge bill, don't they? Unreasonably incurred bills, sub-standard services and work and services which are outside the scope of what, according to the lease, the tenant should be paying for, can all be challenged. The usual place to mount a challenge is the tribunal: to be precise, the First-Tier Tribunal Property Chamber (Residential Property). I know the name alone is enough to put you off but don't be deterred, my friends. You will find some sexy decisions on challenges that have been made in this blog at http://www.breakinglaw.co.uk/search/label/service%20charges

Now, one of the problems with a challenge is it will involve the landlord in expense. The landlord might well bring in lawyers. And, whether you win or lose, the lease may say that the landlord can add these challenge expenses to a future service charge bill. This would mean you and the other tenants in the block eventually having to contribute towards them. 

There's a possible escape. It is an application (under section 20C of the Landlord and Tenant Act 1985) for an order which prohibits the landlord from adding part if not the whole of its expenses to the service charge. The tribunal will grant such an application if it is satisfied that, in the circumstances it is 'just and equitable' to do so. It would be madness for  the challenger not to apply for such an order. The application should be made on the tribunal form called Leasehold 7.   

What an appeal judgement* has established is that a section 20C order can only be made in favour of the challenger and anyone else who the challenger specifies in the form they seek to benefit from an order. The application form specifically asks for details of other tenants who would wish to avoid being stung for challenge expenses, even though they are not parties to those proceedings. The judgment also makes clear that * there is no time limit for a section 20C application being made: * co-tenants who might be effected can make their own application in the same proceedings or subsequently; and * co-tenants can apply for a section 20C order even though the tenant making the challenge was refused a section 20C order.

Good luck, if you deserve it. And, remember, there's a load on landlord and tenant warfare and a thousand other legal topics in Breaking Law.

*The case is Plantation Wharf Management Ltd v Blain Alden Fairman and others [2019] UKUT 236 (LC)