ASP Independent Living Limited v Jean Barbara Godfrey

Introduction

1. This is an appeal from a decision of the First-tier Tribunal (“the FTT”) about the reasonableness and payability of service charges. The appellant landlord has permission from the Tribunal to appeal three of the decisions made by the FTT, two about the reasonableness of charges for the provision of a warden and the other about a charge for gardening services.

2. The appeal has been conducted under the Tribunal’s written representations procedure. The appellant has been represented by The Commercial Law Practice; the respondent has chosen not to participate in the appeal but the Tribunal has read the written representations made on her behalf in response to the application for permission to appeal by her son Mr Peter Godfrey, dated 15 June 2021, together with some emailed corrections. Because the appellant in the Tribunal was the respondent in the FTT, for the avoidance of confusion I shall refer to the parties as the landlord and the lessee. The factual background

3. The lessee holds a long lease of Flat 60 in a block of 23 flats known as The Gate House, 354 Seafront, Hayling Island. The lease contains service charge provisions. It states that the flat must be occupied by someone over 60 years of age. The Gate House is part of a larger complex together with two buildings known as Gorseway Apartments, containing another 52 flats, and a care home. If I have understood correctly, Gorseway Apartments is also owned by the landlord, but not the care home which is the property of an organisation referred to by the parties and the FTT as Agincare; its title according to documents in the bundle is Agincare Homes Holdings Limited. The four buildings are managed together, and Agincare provides some of the services for the whole estate including the warden and the gardening service.

4. In 2020 the lessee made an application to the FTT for a determination of the reasonableness and payability of a number of items in the services charges for the years 2019/20 and 2020/21, demanded as payments on account rather than as final charges. She was represented in those proceedings by Mr Peter Godfrey; her case was that service charges had risen considerably since the freehold changed hands in 2018 and she regarded a number of charges as unreasonable. The landlord was represented by Mr David Jenkins of Daniells Harrison, the landlord’s managing agents.

5. The FTT decided the reasonableness and payability of nine items for the year 2019/20 and ten for the year 2020/21. Its initial decision was dated 4 December 2021. The landlord applied to the FTT for permission to appeal, and as a result the FTT reviewed its decision and issued an amended one on 1 March 2021. The landlord then applied for permission to appeal the amended decision, which the FTT refused but which the Tribunal granted in respect of charges for the provision of a warden and for gardening services. The legal background

6. Service charges demanded of a lessee by the landlord are payable only insofar as they are reasonably incurred, and for services or works of a reasonable standard: section 19 of the Landlord and Tenant Act 1985 . Section 27 A of the 1985 Act gives the FTT jurisdiction to determine the reasonableness and payability of service charges.

7. It is well-established that where a lessee seeks to challenge the reasonableness of a service charge they must put forward some evidence that the charges are unreasonable; they cannot simply put the landlord to proof of reasonableness. See for example Schilling v Canary Riverside Development Ltd ). [2005] EWLands LRX_26_2005

8. The 1985 Act provides further protection for lessees in respect of “qualifying works” and “qualifying long term agreements”.

9. Section 20 of the 1985 Act , together with the Service Charges (Consultation Requirements) (England) Regulations 2003, provide that a tenant cannot be charged more than £250 for “qualifying works”, or £100 in any accounting period for a “qualifying long-term agreement”, unless consultation requirements have been complied with. The consultation process involves a sequence of notices, the circulation of estimates for work to be done, and the opportunity for tenants both to nominate a contractor to provide an estimate and to make observations on the landlord’s plans.

10. Qualifying works are defined (in section 20 ZA(2) of the 1985 Act ) as works on a building or any other premises and are subject to the consultation requirements if they are going to cost the tenant more than £250 by way of service charge.

11. A qualifying long-term agreement is defined (again in section 20 ZA(2)) as an agreement entered into by a landlord for a period of more than 12 months, and such an agreement falls within the consultation requirements of section 20 if the tenant is going to be charged more than £100 in an accounting period.