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This post outlines some possible defences to a landlord's claim for service charge, dealing firstly with circumstances that render the entire service charge demand invalid, and secondly with defences to specific items in the service charge demand.

 

 

Firstly, there are many reasons why a service charge demand might be invalid or unenforceable in its entirety:

 

(a) The landlord has failed to comply with Section 47 of the Landlord and Tenant Act 1987.

 

(b) The landlord has failed to comply with Section 48 of the Landlord and Tenant Act 1987.

 

© The landlord has commenced proceedings before the due date for payment in the lease.

 

(d) The landlord has prepared the service charge accounts for the wrong period.

 

(e) The landlord’s accountant has failed to certify the amount of service charge due (if required by the terms of the lease).

 

(f) The landlord has failed to comply with Section 21 of the Landlord and Tenant Act 1985.

 

 

Secondly, if the demand is valid then nevertheless there are still many possible defences as to particular parts of the service charge accounts :

 

(a) Part of the amount included in the service charge account has already been paid.

 

(b) The tenant is entitled to set-off amounts previously overpaid, or any damages awarded by the County Court (e.g. under a counterclaim for breach of contract or negligence in the preparation of the accounts or the management of the building).

 

© Some of the items in the service charge account are ones the tenant is not contractually liable for under the terms of the service charge clause in the lease.

 

(d) The landlord has failed to comply with Section 20B of the Landlord and Tenant Act 1985 (18 month limit), so part of the relevant costs taken into account are not recoverable.

 

(e) The landlord has failed to comply with Section 158 of the Commonhold and Leasehold Reform Act 2002 (requirement to provide prescribed form of summary), so the tenant is not liable for administration charges.

 

(f) The service charge accounts include variable administration charges under Section 158 of the Commonhold and Leasehold Reform Act 2002 that are not reasonable in amount.

 

(g) The service charge accounts include relevant costs that were not reasonably incurred within the meaning of Section 19(1) of the Landlord and Tenant Act 1985.

 

(h) The service charge accounts include a payment on account of a greater amount than is reasonable under Section 19(2) of the Landlord and Tenant Act 1985.

 

(i) The service charge accounts include interest that is not contractually due under the terms of the lease.

 

 

In respect of each of the above points, here is a Defence which the tenant might rely on in court -

 

 

1. Section 47 Notice

 

The service charge accounts are a written demand falling within section 47 of the Landlord and Tenant Act 1987, but the service charge accounts do not contain the information required by that section. In consequence, no part of the amount demanded for service charges or administration charges is due.

 

Section 47 of the Act applies to premises which include a dwelling, as provided by section 46 of the Act.

 

Section 46(1) says :

 

"46. (1) This Part [Part VI] applies to premises which consist of or include a dwelling and are not held under a tenancy to which Part II of the Landlord and Tenant Act 1954 applies [business tenancies]."

Section 47 falls within Part VI of the 1987 Act.

 

Section 47(1) says :

 

"47. (1) Where any written demand is given to a tenant of premises to which this Part applies, the demand must contain the following information, namely -

(a) the name and address of the landlord, and

(b) if that address is not in England and Wales, an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant."

 

For further information see this thread: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/116181-service-charge-dispute-section.html

 

 

2. Section 48 Notice

 

The service charge accounts are a written demand falling within section 48 of the Landlord and Tenant Act 1987, but the service charge accounts do not contain the information required by that section. In consequence, no part of the amount demanded for rent, for service charges, or for administration charges is due.

 

Section 48 of the Act applies to premises which include a dwelling, as provided by section 46 of the Act.

 

Section 46(1) says :

 

"46. (1) This Part [Part VI] applies to premises which consist of or include a dwelling and are not held under a tenancy to which Part II of the Landlord and Tenant Act 1954 applies [business tenancies] "

and section 48 falls within Part VI of the 1987 Act.

 

Section 48(1) of the Act says :

 

"48. (1) A landlord of premises to which this Part applies shall by notice furnish the tenant with an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant."

 

The service charge accounts do not contain the information required by that section. Accordingly, by reason of section 48(2) of that Act no part of the amount demanded for rent, for service charges, or for administration charges [added by schedule 11 part 2 of the Commonhold and Leasehold Reform Act 2002], is due.

 

Section 48(2) says :

 

"(2) Where a landlord of such premises [to which this Part applies] fails to comply with subsection (1), any rent or service charge [or administration charge] shall ... be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection."

 

Section 48 applies to a tenancy created before 1 February 1988, the date the section came into force. Halsbury’s Laws Volume 27(1) page 59 at paragraph 49 note 6, says :

 

“Section 48 applies to tenancies created or in existence before 1 February 1988.”

 

For further information see this thread: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/116211-service-charge-dispute-section.html

 

 

3. Wrong Period

 

The service charge accounts are invalid or unenforceable as they have been prepared for the wrong period.

 

The service charge year runs to (for example) 31st December and is equivalent to the calendar year, but the Applicant has wrongly drawn up the service charge accounts to (for example) 25th December.

 

 

4. Accounts not certified

 

The terms of the lease require that the amount of service charge due must be certified by the Applicant's accountants.

 

The amount due has not been certified as required. This is a condition precedent to the tenant’s liability to pay, so the service charge demand is invalid or unenforceable.

 

 

5. No Statutory Accountant's Certificate

 

Section 21 of the Landlord and Tenant Act 1985 provides that a summary of the costs on which the service charge is based must be supplied to the tenant if requested, and that where it relates to more than four dwellings it must be certified by a qualified accountant.

 

I made such a request on several occasions but no summary, certified by an accountant, has been provided by the landlord for the period covered by the accounts.

 

In the absence of the statutory accountant's certificate :

 

(1) The service charge accounts are invalid or unenforceable, or the tenant is entitled to withhold payment, and/or

 

(2) The landlord is not entitled to pass on the accountant's fees to the tenant in the service charge.

 

 

6. Previous Payment

 

The service charge accounts include sums I have already paid.

 

I paid £______ to the landlord’s managing agents on (date). That payment was made in full and final settlement of all monies due under the service charge demand dated (date), which the landlord accepted. Accordingly, no further sum is due for the period to which that demand relates or any earlier period.

 

 

7. Items Not Within the Service Charge clause

 

I am not liable for payment of the following items in the service charge accounts.

 

The Applicant has no contractual right to recover these items, because they are not within the tenant's service charge covenant in clause ____ of the lease.

 

The items in question are not chargeable to me because the rights of the parties are governed by contract, namely the terms of the lease, and the tenant has only agreed to pay those items expressly stated in clause _____.

 

The contra preferentum rule, that any ambiguity in the lease shall be construed against the landlord and in favour of the tenant because it was the landlord who drafted the lease, excludes any scope for implying additional words beyond those expressly stated in that clause.

 

For the landlord to be entitled to recover those items under that clause would require express words in the lease making such costs recoverable. There are no such words in the lease in the following instances.

 

(Then give specific instances of the items in question)

 

 

8. Items not within the Service Charge clause: earlier years

 

The amounts below are for items which are not within the tenant’s service charge covenant in clause ___ of the lease.

 

In each case, the reason why the item concerned does not fall within the service charge covenant is the same reason as given in paragraph 7 above. The items concerned are the same items as are detailed in that paragraph, but from earlier service charge years.

 

The items in question have in this case been paid, by accident, and I seek a credit for the amount of the overpayment. I paid the sums on (date) [or: I paid the sums as part of the settlement detailed in paragraph 6 above].

 

 

9. 18 Month Limit under Section 20B L&T Act 1985

 

The service charge accounts include relevant costs that were incurred by the Applicant more than 18 months before a demand for payment or other written notification was served on me.

 

Under Section 20B of the Landlord and Tenant Act 1985 I am not liable to pay so much of the service charge as reflects relevant costs that were incurred more than 18 months before a demand for payment was served on me.

 

Section 20B of the 1985 Act says :

 

"20B. (1) If any of the relevant costs taken into account in determining the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge is served on the tenant, then (subject to subsection (2)), the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred.

 

(2) Subsection (1) shall not apply if, within the period of 18 months beginning with the date when the relevant costs in question were incurred, the tenant was notified in writing that those costs had been incurred and that he would subsequently be required under the terms of his lease to contribute to them by the payment of a service charge."

 

 

10. Buildings Insurance

 

The following matters arise under the landlord’s covenant to insure the building in clause ___ in the lease :

 

(1) The landlord is in breach of his own covenants in the lease, and is not entitled to enforce the tenant covenants while his breach continues. In the alternative, it is not reasonable for him to recover the insurance premiums.

 

The Applicant covenanted to insure the building and to produce to the tenant on request the policy of insurance and the receipt for the current year’s premium. I made such a request on (date), but the landlord failed to comply with that covenant.

 

(2) Alternatively, I made a written request to the managing agents requiring the Applicant to supply a written summary of the insurance under section 30A of the Landlord and Tenant Act 1985, with which he has not complied.

 

For further information see this thread: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/113588-service-charges-dispute-buildings.html

 

 

11. Section 146 Notice

 

The sum of £______ claimed for legal costs in respect of a notice under section 146 of the Law of Property Act 1925 is not payable, because :

 

(1) The notice does not comply with section 146(1), in that :

(a) It does not specify the particular breach alleged, and/or

(b) The clause relied on does not exist in the lease

 

therefore the notice is invalid: no costs can arise under an invalid notice.

 

(2) Alternatively, the costs of the notice are not within clause ____ [the section 146 notice clause] in the Lease.

 

(3) Alternatively, the dispute concerning breach of covenant falls within clause ___ in the lease, which provides that the dispute must be submitted to arbitration as a condition precedent to the Applicant’s entitlement to serve the notice, but no reference to arbitration occurred, and the dispute arose prior to 30 September 2003.

 

 

12. Administration Charges

 

The service charge accounts include administration charges within the meaning of section 158 and schedule 11 in the Commonhold and Leasehold Reform Act 2002, detailed below, totalling £_______.

 

Paragraph 1(1)(d) of Schedule 11 says :

 

"1. (1) In this Part of this Schedule "administration charge" means an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable, directly or indirectly -

...

(d) in connection with a breach (or alleged breach) of a covenant or condition in his lease."

 

These are charges which fall outside the definition of “service charge” in section 18 of the Landlord and Tenant Act 1985.

 

I am entitled to withhold payment of the administration charges because paragraph 4 of Schedule 11 in the 2002 Act requires the Applicant to give me a summary, in the prescribed form, of the leaseholder's rights and obligations in relation to administration charges, which he has not done.

 

Paragraph 4 of Schedule 11 says :

 

“4.(1) A demand for the payment of an administration charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to administration charges.

 

(2) The appropriate national authority may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.

 

(3) A tenant may withhold payment of an administration charge which has been demanded from him if sub-paragraph (1) is not complied with in relation to the demand.”

 

Alternatively, I apply for a determination under paragraph 5 of Schedule 11 as to whether or not the administration charge is payable and if so, by whom it is payable, and the amount which is payable.

 

Paragraph 5 of Schedule 11 says :

 

“5.(1) An application may be made to a leasehold valuation tribunal for a determination whether an administration charge is payable and, if it is, as to - (a) the person by whom it is payable,

(b) the person to whom it is payable,

© the amount which is payable,

(d) the date at or by which it is payable, and

(e) the manner in which it is payable.

(2) Sub-paragraph (1) applies whether or not any payment has been made.”

 

 

13. Variable Administration Charges

 

The items specified below are variable administration charges and in each case the amount of the charge is not reasonable.

 

Section 158 and Schedule 11 in the Commonhold and Leasehold Reform Act 2002 defines a variable administration charge as a charge falling within paragraph 15 above, if the amount is not specified in the lease nor calculated in accordance with a formula specified in the lease.

 

Paragraph 1(3) of Schedule 11 says :

 

“(3) In this Part of this Schedule "variable administration charge" means an administration charge payable by a tenant which is neither -

(a) specified in his lease, nor

(b) calculated in accordance with a formula specified in his lease.”

 

Section 158 and Schedule 11 of the 2002 Act provides that a variable administration charge is only payable to the extent that the amount is reasonable.

 

Paragraph 2 of Schedule 11 says :

 

“2. A variable administration charge is payable only to the extent that the amount of the charge is reasonable.”

 

Each of the items specified is a variable administration charge, because each such item is an administration charge as defined above, of which the amount is not specified in the lease nor calculated in accordance with a formula specified in the lease.

 

In each case the amount is not reasonable: for the reasons above, and for the following reasons, it is either (a) entirely unreasonable, or alternatively (b) grossly excessive for what was involved, or alternatively © not reasonably incurred.

 

 

14. Reasonableness

 

In determining the amount of the service charge, relevant costs were taken into account that were not reasonably incurred or were not of a reasonable standard, within the meaning of Section 19(1) of the Landlord and Tenant Act 1985.

 

Section 19(1) says:

 

“19.(1) Relevant costs shall be taken into account in determining the amount of a service charge payable for a period—

(a) only to the extent that they are reasonably incurred, and

(b) where they are incurred on the provision of services or the carrying out of works, only if the services or works are of a reasonable standard;

and the amount payable shall be limited accordingly.”

 

The first point to be considered is whether each disputed head of expenditure falls within Section 18 of the 1985 Act, such that they fall to be limited under Section 19 of the 1985 Act if not reasonably incurred and/or if incurred in respect of services or works which are not of a reasonable standard.

 

"Service charge" is defined in Section 18(1) of the 1985 Act as: "an amount payable by a tenant of a dwelling as part of or in addition to the rent (a) which is payable, directly or indirectly, for services, repairs, maintenance, improvements, or insurance or the landlord's cost of management, and (b) the whole or part of which varies or may vary according to the relevant costs".

 

"Relevant costs" are defined in Section 18(2) of the 1985 Act as: "the costs or estimated costs incurred or to be incurred by or on behalf of the landlord... in connection with the matters for which the service charge is payable".

 

The following items in the service charge accounts are payable, either directly or indirectly, for services, repairs, maintenance, improvements, insurance, or the landlord's cost of management :

 

(a) For services, those amounts itemised as: (examples) “Electricity for common parts”, “Accountants - audit fee”, and “Accountants adjustment for 2004”.

 

(b) For insurance, those amounts itemised as: (examples) “Insurance” and “Lessor’s costs in maintaining insurance”.

 

© For the landlord's cost of management, those amounts itemised as: (examples) “Management Charge”, “Statutory Management costs, F.S.A. and European Initiative - December 2004”, “Lessor’s costs in maintaining insurance”, “Accountants - audit fee”, “Accountants adjustment for 2004”, “Legal and management costs”, “Breaches of Lease”, “Advance Service Charge" and “Interest”.

 

Those items are detailed in paragraphs 7 and 8 above. For each of those items, the amount is unreasonable because of the matters detailed in respect of the item in those paragraphs, and because of the following matters.

 

To the extent that it is not implicit in the wording of the 1985 Act, the Court of Appeal has decided that the parties to a lease could not have intended that the landlord should have an unfettered discretion, and that the service charge covenant contains an implied term that the landlord must be reasonable in his proposals and demands (Finchbourne -v- Rodrigues, Court of Appeal, 1976).

 

 

15. Payment on Account

 

The service charge accounts dated (date) include a payment on account of relevant costs that have not yet been incurred, of an amount greater than is reasonable.

 

Section 19(2) of the Landlord and Tenant Act 1985 says :

 

“19.(2) Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise.”

 

 

16. Interest

 

The service charge accounts include a sum for interest, but the landlord is not entitled to any interest because :

 

(1) There is no contractual provision in the lease requiring interest to be paid by the tenant; and/or

 

(2) The claim for interest in the County Court proceedings has not been adjudicated, as those proceedings are still continuing, and no award of interest under the County Courts Act has been made.

 

 

17. Ground Rent

 

The Leasehold Valuation Tribunal does not have jurisdiction to determine liability to pay ground rent.

 

Section 27A of the Landlord and Tenant Act 1985 empowers the tribunal only to determine questions relating to “whether a service charge is payable”.

 

“Service charge” is defined in section 18 of the Landlord and Tenant Act 1985, as the amount payable “for services, repairs, maintenance or insurance, or the landlord's costs of management”, a list which does not include ground rent.

 

Accordingly, as ground rent is not within the definition of “service charge” in section 18 of the Act, the tribunal has no jurisdiction under section 27A of the Act to determine whether ground rent is payable. The tribunal therefore cannot determine liability for ground rent under any of the service charge accounts served from 1999 to the present.

 

Alternatively, a notice in the prescribed form must be given to the tenant before he is liable to pay the ground rent, and the notice must give at least 30 days to pay, under section 166 of the Commonhold and Leasehold Reform Act 2002.

 

Section 166 says :

 

“166.(1) A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment; and the date on which he is liable to make the payment is that specified in the notice.

 

(2) The notice must specify -

(a) the amount of the payment,

(b) the date on which the tenant is liable to make it, and

© if different from that date, the date on which he would have been liable to make it in accordance with the lease,

and shall contain any such further information as may be prescribed.

 

(5) The notice -

(a) must be in the prescribed form …”

 

Subsection (9) of section 166 provides that "long lease" has the meaning in section 76 of the Act, which includes a lease “granted for a term of years certain exceeding 21 years”. The lease of my flat was granted for a term of __ years.

 

Section 166 came into force on 28th February 2005, by the Commencement No 5 Order made under the 2002 Act.

 

The service charge accounts include a demand for payment of ground rent. The account was served on me after section 166 came into force: they were served on me on (date).

 

No notice has been given to me by the landlord under section 166 at any time. Accordingly, no liability to pay ground rent under either of those demands had arisen at the time the landlord applied to the tribunal in these proceedings, so those demands for ground rent must fail.

 

 

18. Set Off

 

[Restricted power of leasehold valuation tribunal to deal with set-off]

 

I seek to set-off against the amount (if any) of service charge found to be due to the Applicant the sums which I overpaid for service charge in earlier service charge years.

 

I am not asking the Tribunal for damages, only for a set-off in reduction of the amount of service charge.

 

The Tribunal has jurisdiction to do this under section 27A of the Landlord and Tenant Act 1985. Sub-section 1© provides that the Tribunal shall determine “the amount [of service charge] which is payable”. I am only asking that the Tribunal take into account, in its calculation, the amount of the overpayment of service charge I made previously.

 

However, I am asking in addition that enforcement of any order made be conditional on the outcome of my Counterclaim for damages in the County Court: that enforcement be suspended pending the final judgement on my Counterclaim.

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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If proceedings are begun in the County Court over the service charge, the chances are that the Court's first step will be to transfer the case to the Leasehold Valuation Tribunal.

 

This does not mean the Court is washing its hands of the case.

 

The tribunal's job is to decide some basic issues (i.e. whether disputed service charge items are payable, and if so then the amount which is payable), but any issues which fall outside the tribunal's powers - such as damages (e.g. for breach of contract, or breach of statutory duty) or limitation - will be decided later, by the Court.

 

The tribunal, having made its decision (i.e. at a hearing), will then remit the case back to the County Court, which will decide the other issues pleaded by the tenant in the Defence. To reactivate the Court case it may be necessary to apply to the Court for further directions, once the tribunal has made its final decision and any appeal against that decision (to the Lands Tribunal) has been heard.

 

 

The examples I gave of possible defences to the landlord's claim for payment of the service charge are not exhaustive. There are other possible defences, depending on the terms of your lease and on which of the statutory protections the landlord has ignored.

 

I've merely outlined a few possibilities, which won't apply in every case.

 

 

The basic approach is to read the service charge clause carefully, and try to understand it. It means what it says; and the tribunal will try to give effect to the actual words used in it. The items it specifies are the ONLY ones the landlord can charge for.

 

It is usually only one clause, or one schedule, in the lease. You normally don't need to bother trying to understand the rest of the lease.

 

 

The statutory provisions are more straightforward. These are the same in every case, so the tribunal will be familiar with them. (More familiar, obviously, than it will be with the wording used in your particular lease.)

 

 

Sorry about any offence given by the length of my original posting, but this is not an issue which can be addressed in a couple of paragraphs.

 

If merely reading that posting is too much for you, then you should certainly forget about contesting a service charge demand yourself: get a solicitor, but be prepared to pay through the nose for the privilege.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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Share on other sites

Items Not Within the Service Charge Covenant

 

[The tenant is not liable for payment of items in the service charge which are not within the service charge clause in the lease].

 

I am not liable for payment of the following items in the service charge accounts.

 

The landlord has no contractual right to recover these items, because they are not within the tenant's service charge covenant in clause ____ of the lease.

 

Clause ___ says: "(Here set out, verbatim, the wording of the clause)".

 

The items in question are not chargeable to me because the rights of the parties are governed by contract, namely the terms of the lease, and the tenant has only agreed to pay those items expressly stated in clause ____.

 

The contra preferentum rule, that any ambiguity in the lease shall be construed against the landlord and in favour of the tenant because it was the landlord who drafted the lease, excludes any scope for implying additional words beyond those expressly stated in that clause.

 

For the landlord to be entitled to recover those items under that clause would require express words in the lease making such costs recoverable. There are no such words in the lease in the following instances.

 

 

1. Electricity for lighting the common parts -

 

The facts are as follows :

 

The service charge accounts include the following amounts for lighting the common areas of the building, itemised as (example) 'Electricity' or 'Electricity Common Parts', totalling £______:

 

Accounts Dated Amount

(examples)

01.04.06 £____

01.04.07 £____

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

The service charge accounts include a total of £____ in electricity charges for lighting the common parts of the building. [Of that total, £____ arises prior to 31 December 2005 and falls within the settlement specified in paragraph __ above, and the balance of £_____ arises under the service charge accounts dated (date).]

 

This item is not within clause ____ in the lease because that clause includes only repairs to the main structure of the building, and does not mention either services, such as electricity, or common parts.

 

 

2. Landlord’s costs of maintaining insurance -

 

The facts are as follows :

 

The service charge accounts include the following amounts for maintaining the buildings insurance, itemised as (example) “Lessor’s costs in maintaining insurance”, totalling £_____ :

 

Accounts Dated Amount

(example)

01.04.06 £_____

01.04.07 £_____

 

In all of those accounts this is a different item from the actual insurance premium itself, which is itemised separately in each case as "Insurance".

 

The tenant’s obligations under the lease in connection with insurance, in clauses 1 and ___, specify only the payment of the premium itself.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

The service charge accounts include a total of £______ for maintaining the buildings insurance, as detailed above, itemised as (example) "Lessor’s costs in maintaining insurance".

 

[Of that total, £_____ arises prior to 31 December 2005 and falls within the settlement specified in paragraph __ above. The balance of £_____ arises under the service charge accounts dated (date).

 

This item is not within clause ____ in the lease because that clause includes only repairs to the main structure of the building, and does not mention services, such as insurance of the building.

 

This item is not the management fee allowed under clause ____, because that clause says (example) "a management fee", i.e. in the singular, meaning one management fee only. The Applicant already includes a management fee in all of the service charge accounts as a separate item.

 

As clause ____ limits him to only one management fee, he cannot recover his so-called "costs of maintaining insurance" as a second management fee.

In every set of service charge accounts this charge is a separate item from the insurance premium: the premium is always itemised separately as "Insurance".

 

Clause 1 in the lease is also relevant in relation to insurance. It says :

 

(example) "ALSO PAYING unto the Lessor on demand by way of additional rent a sum equal to all such sums as the Lessor from time to time may pay for insuring and keeping insured the premises against loss or damage by fire and other risks as hereinafter provided."

 

The item does not come within clause 1 in the lease, because that clause only requires the reimbursement of the insurance premium, not some additional fee.

 

The Applicant is seeking to make a profit out of the provision of the insurance, but there are no express words in clause _____ of the lease entitling him to do so. The landlord is not entitled to recover a profit element in addition to the actual cost of supplying the service in the absence of an express term.

 

 

3. Costs in disputes with other tenants -

 

The facts are as follows :

 

The service charge accounts include the following items allegedly owed by other tenants, relating to disputes between the landlord and tenants of other premises, carried forward into the accounts dated (date).

 

(a) The sum of £______ itemised as "Photography" relating to the landlord’s dispute with other tenants in the building, the former tenants of Flat __ :

 

Accounts Dated Amount

01.04.05 £_____

 

(b) A total of £______ itemised as “Photography”, relating to the landlord covertly photographing the activities of other tenants in the building, lessees of Flat number __, in a dispute in connection with a covenant in the lease :

 

Accounts Dated Amount

(example)

01.04.06 £_____

01.04.07 £_____

 

The accounts claim on two occasions, namely (date) and (date), for the same item of expenditure. Those items are duplicates, claiming on multiple occasions for a single item.

 

(example) On (date) I received the landlord's letter, which included numerous invoices issued all bearing the identical invoice number, appearing to be the same invoice, issued and reissued and amended, claiming for the one item of expenditure on multiple occasions.

 

There is no power in the lease for the landlord to engage in those activities, nor is there a right of entry onto the property for those purposes in the lease, and I did not give the Applicant permission to enter the property for those purposes.

 

I have read the landlord's letter dated (date). He admits that he trespassed on the property and spied on myself and other tenants.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

(1) The items are not within clause ___ in the lease, because the clause does not use the express words which would be necessary to bring such items within its ambit -

 

(a) The clause does not require the tenant to pay charges in connection with photographic surveillance. There are no such express words in the clause.

 

(b) Alternatively, the clause does not require me to pay charges in connection with a breach of covenant. That would require express words in the clause making costs in connection with a breach of covenant recoverable as service charge. There are no such express words in the clause.

 

Alternatively, the Applicant has not proved such a breach in a court or an arbitration; and there are no express words in the clause that refer to costs of an alleged but unproven breach.

 

© Alternatively, the clause does not require me to pay charges in connection with a dispute between the Applicant and lessees of other premises: there are no express words in the clause that refer to costs of such a dispute. These costs ought to have been pursued against the offending lessee.

 

 

(2) Alternatively, the leases of the flats in the building, which were granted piecemeal over many years, are not in identical terms. A covenant in another of the leases may not be in the lease of my flat. The Applicant has not given any particulars of the alleged breaches of covenant, so has not established that the breaches alleged in respect of the other leases are capable of being a breach of my lease.

 

For instance, I have the right to park at the property: a car parking space is included in the demise, in clause 1 of the lease.

 

The original parties to my lease cannot have intended that its interpretation would depend upon clauses in other leases, not included in my lease, of which the original tenant under my lease could have no knowledge. So they cannot have intended the service charge clause to relate to matters which are not capable of arising under my lease.

 

 

(3) Alternatively, the clause says that expenses incurred by the landlord are only recoverable from the tenant if they are (example) "in connection with the management of the said Building". A dispute with a tenant of another flat about his flat relates only to that flat, and not to the building as a whole. It cannot therefore be said to be management "of the said Building". The dispute relates to part only of the building, whereas the covenant relates only to the whole building: the words "of the said Building" are not qualified by any words such as "or part thereof".

 

In the alternative, such a dispute is not management of the building within the meaning of the clause because the clause provides only for repairs to the main structure and external parts of the building, and nothing else, those being the only landlord functions mentioned in the clause.

 

 

(4) Alternatively, the landlord has not reserved a right in the lease to enter the property to conduct such surveillance activities.

 

There is no express right of entry for that purpose: the only rights of entry reserved by the lease are: (example) to maintain drains and pipes, in clause 1; to view the interior of the flat, in clause ____; and to repair the main structure of the building, in clause ____.

 

There is no implied right of entry. On this point I rely on “The Law of Landlord and Tenant” by Evans and Smith, page 108, which says :

 

“Except for the purpose of distraining for rent arrears, the landlord has generally no implied right to enter the premises.“

 

Therefore without the express permission of the tenant the landlord is a trespasser. Any costs incurred by the landlord in the course of wrongful trespass cannot be a reasonable and proper cost of providing a service to the tenant, so cannot fall within the tenant’s service charge covenant in the lease.

 

 

(5) Alternatively, the two items of £______ specified in above are duplicates, claiming on multiple occasions for a single item of expenditure.

 

 

4. Legal fees -

 

The facts are as follows :

 

The service charge accounts include the following items -

 

(a) (example) The sum of £_____ in the service charge accounts dated (date) itemised as “legal costs concerning breach of covenant”, for service on me by a solicitor of a notice under section 146 of the Law of Property Act 1925.

 

(b) (example) The sum of £_____ in the service charge accounts dated (date), itemised as “Landlords costs incurred - solicitors”, allegedly incurred by the Applicant for solicitors fees.

 

© (example) The total of £_____ in the service charge accounts dated (date) itemised as “charges re Lands Tribunal” £___ and “Solicitors - County Court Costs incurred” £______, allegedly incurred by the landlord for legal fees.

 

(d) (example) The sum of £______ in the service charge accounts dated (date) itemised as “Counsel”, allegedly incurred by the Applicant for Barrister’s fees.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

(1) The items are not contractually payable.

 

They do not fall within the service charge covenant in clause _____ of the lease, because :

 

(a) Halsbury’s Laws Volume 27(1) page 268, at paragraph 287 note 9, says :

 

“Legal costs of prosecuting a claim for forfeiture not ‘costs of management’. (Iperion Investments Corpn v Broadwalk House Residents Ltd [1992] 2 EGLR 235 at 251)”

 

which prevents the Applicant recovering the costs of item (a).

 

(b) In so far as the items relate to proceedings before a Court or Tribunal, namely items (b), © and (d), for the landlord to be entitled to recover them would require express words in the clause making costs in proceedings recoverable as service charge. There are no such words: the clause does not include words such as “legal costs” “court fees”, “costs of proceedings”, or “barristers charges”.

 

In so far as the items relate to disbursements, including barrister’s fees, for the Applicant to be entitled to recover them would require clear words in the clause making solicitors disbursements recoverable as service charge. There are no such words: the clause does not include words such as “solicitors disbursements”, “disbursements”, or “solicitors expenses”.

 

© Alternatively, with regard to the item for Counsel’s fees, for the Applicant to recover them would require express words in the clause making barristers fees recoverable as service charge. There are no such words: the clause does not include such words as “Counsel’s fees”, “barrister’s charges”, or “legal costs”.

 

(d) Alternatively, the fees of the barrister are at issue in these proceedings. They arose in the County Court at an earlier stage of these proceedings, and are the subject of my application under section 20C of the Landlord and Tenant Act 1985, dealt with in paragraph __ below.

 

(e) Alternatively, with regard to the items £____ itemised as “Landlords costs incurred - L.V.T. application” and £____ itemised as “charges re Lands Tribunal”, these items are not payable because for the landlord to be entitled to recover them would require express words in the clause making costs in a Tribunal case recoverable as service charge. There are no such words.

 

In the alternative, these items relate to a dispute between the landlord and a third party: ABC Management Company Limited, a limited company formed by the tenants to acquire the Right To Manage, which is a separate legal entity. I am not liable for costs of the Applicant’s disputes with third parties, because there are no such words in the clause making such costs recoverable as service charge.

 

 

(2) Alternatively, the solicitor’s fees and disbursements are not reasonable and proper in each case, because :

 

(i) No details, or inadequate details, have been given as to what the alleged fees relate to and what work was done. The Applicant has thus not proved that the charges are reasonable. It is noted, also, that the amount appeared always to be £______, regardless of the type or the difficulty of the work concerned.

 

 

(ii) Alternatively, there is no evidence that the costs were actually incurred. In each case I was not given a copy of the solicitor’s bill.

 

 

(iii) Alternatively, in each case the Applicant failed to give me notice of my rights to challenge the solicitor’s bill under the Solicitors Act 1974. This was unreasonable. A third party liable to pay that bill has a right to challenge the bill under section 71(1) of the Solicitors Act 1974. In each case the Applicant also failed to give me a copy of the bill for the purpose of making such a challenge.

 

Halsbury’s Laws Volume 44(1) (Solicitors), pages 174-5, paragraph 207, says :

“Taxation of a solicitor’s bill to his own client under the Solicitors Act 1974 may be ordered, subject to various conditions being met, on the application of the party chargeable, the solicitor or a third party.“

 

Note 6 in paragraph 207 says in this context “third party” means : “any person who has paid the bill or is or was liable to pay it either to the solicitor or to the party chargeable.”

 

This includes a tenant who is liable, under the tenant’s service charge covenant, to pay a solicitor’s bill incurred by the landlord, because the landlord is for this purpose the “party chargeable” as defined in section 71 of the 1974 Act.

 

Until the bill is shown to me I cannot know its date, amount, the details of the work done, the charging rates applied, or the name of the solicitor.

 

 

(iv) Alternatively, in each case the Applicant failed to give me notice of my rights to challenge the solicitor’s costs under the Solicitors (Non-Contentious Business) Remuneration Order 1994, where applicable.

 

Section 87 of the Solicitors Act 1974 defines non-contentious work as any work in which Court proceedings were not begun, including work done in a Tribunal. Accordingly, the 1994 Order even applies to the section 146 notice served on me, because no Court proceedings were begun in respect of it.

 

The Applicant cannot remedy any of the above-mentioned defects once he has served a demand for payment or issued proceedings based on that demand.

 

 

Additional reasons relating to the above matters :

 

In relation to the above, I rely on Halsbury’s Laws Volume 27(1) page 268, paragraph 287 note 9, which says :

 

“Fees of solicitors and counsel incurred in bringing proceedings to recover the service charge held not to be recoverable. (Sella House Ltd v Mears [1989] 1 EGLR 65, CA)“.

 

The case directly concerns the issues of contractual recoverability of solicitor's costs, and contractual recoverability of costs of disputes with third parties.

 

In that case, the landlord sought to recover the costs of counsel and solicitors employed to pursue other lessees for arrears of rent and service charges. The judgement of Taylor J includes the following passage at 68E-F :

 

"Nowhere in [the relevant clause of the lease] is there any specific mention of lawyers, proceedings or legal costs. The scope of [one of the covenants] is concerned with management, in [another covenant] it is with maintenance, safety and administration. On the [landlord's] argument a tenant, paying his rent and service charge regularly, would be liable via the service charge to subsidise the landlord's legal costs of suing his co-tenants, if they were all defaulters. For my part, I should require to see a clause in clear and unambiguous terms before being persuaded that that result was intended by the parties."

 

There are four considerations which I submit are persuasive :

 

Firstly, there is the reasoning of Taylor J in Sella House. The legal expenses which are claimed by the Applicant, detailed above, were incurred in relation to alleged breaches by the tenant of obligations under the lease of her Flat. If those expenses are allowable it would enable the landlord to also recover from the tenant costs in relation to breaches of the lease of Flat number __: the costs which are in fact detailed above. This is the danger identified by Taylor J, but the Respondent’s lease does not contain the clear words necessary to impose this consequence.

 

Secondly, the words actually used in the service charge clause of the lease are (example) "the costs and expenses of keeping in good repair and condition ... all external parts of the Building and accessways and garden areas. The clause refers to “the Building”. It clearly relates to the building as a whole. The landlord therefore cannot recover costs incurred in relation to individual flats. The legal costs being claimed were incurred in trying to ensure that the Respondent paid the service charge relating to her flat, or observed the covenants relating to her flat. These are matters which relate solely to her flat, rather than to “the Building” as a whole.

 

Thirdly, there is some support for this in another provision of the lease. Clause ___ in the lease provides for the tenant to pay all expenses (including Solicitors' costs and Surveyors' fees) incurred by the landlord in the preparation and service of section 146 notices. The draftsman could have included a similar provision in respect of other legal costs, but chose not to.

 

Finally, the ambit of clause ____ of the lease relates to repair and maintenance rather than to legal advice by solicitors. Moreover, it is difficult to see how the advice given by the solicitors is even incidental to repair or maintenance.

 

 

(3) Other Items in the Service Charge Accounts dated (date) -

 

The facts are as follows :

 

The service charge accounts dated 28 February 2005 include the following item: £____ itemised as (example) “Statutory Management Costs”.

 

The service charge accounts dated 28 February 2005 were not served on me, as detailed below.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

As I was not served with the service charge accounts dated (date), I have no liability to pay them as no demand for payment was made.

 

Alternatively, the service charge covenant in the lease does not require the tenant to pay these management costs. For the landlord to be entitled to recover these costs under that clause would require express words in the clause making such costs recoverable, but there are no such words in the clause.

 

The clause limits the landlord to one management fee, and that fee is itemised separately, described as “management charges” (detailed in paragraph __ above).

 

The clause says "a management fee", i.e. in the singular, meaning one management fee only. The Applicant already includes a management fee in all of the service charge accounts, as a separate item (detailed below), and because the clause limits him to only one management fee he cannot recover this item as a second management fee.

 

 

(4) Other Items in the Service Charge Accounts dated (date) -

 

The facts are as follows :

 

The service charge accounts include the following items :

 

(a) The sum of £_____ in the service charge accounts dated (date), itemised as “Parking”, allegedly incurred by the landlord. No details are given as to what this charge might relate to.

 

(b) The sum of £_____ in the service charge accounts dated (date), itemised as “XYZ Investigations”, allegedly incurred by the landlord. No details are given as to what this charge might relate to.

 

I did not give the Applicant permission to enter the property for those purposes.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

With regard to each of those items :

 

(i) The service charge covenant in the lease does not require the tenant to pay these costs. For the landlord to be entitled to recover these costs under that clause would require express words in the clause making such costs recoverable, but there are no such :

(a) The clause does not include words such as “Parking”, or “parking costs”.

(b) The clause does not include words such as “Investigations” or “investigations costs”.

 

(ii) Alternatively, in each case this is a disguised management fee. The service charge clause in the lease limits the landlord to one management fee, and that fee is itemised separately, described as “management charges” (detailed in paragraph __ above).

 

The clause says "a management fee", i.e. in the singular, meaning one management fee only. The landlord already includes a management fee in all of the service charge accounts, as a separate item (detailed in paragraph __ below). Because the clause limits him to only one management fee, cannot recover these items as a second management fee.

 

(iii) Alternatively, the Applicant has not reserved a right in the lease to enter the property to conduct these activities.

 

For the reasons set out above, there is no express right of entry onto the property for those purposes, and no implied right of entry.

 

Therefore without the express permission of the tenant the landlord is a trespasser. Any costs incurred by the Applicant in the course of wrongful trespass cannot be a reasonable and proper cost of providing a service to the tenant, so cannot fall within the tenant’s service charge covenant in the lease.

 

 

5. Advance Service Charge -

 

The facts are as follows :

 

The accounts dated (date) include an item of £_____ on account of future service charge, for the 2008 service charge year (the year to 31 December 2008 ), itemised as "advance service charge".

 

The accounts dated (date) are marked "to 25.12.07". Accordingly, they relate to the period of 12 months to 25th December 2007.

 

A deceit is used by the landlord in the accounts: by describing this item as “interim demand” he seeks to make the item appear on the face of it to be a payment on account for the current year, rather than a payment for next year.

 

 

My reasons for disputing the Service Charge accounts in this respect are :

 

The service charge accounts served in each calendar year are drawn up for the period of 12 months ending on the following December 25th.

The account dated (date) is marked "25.12.06 to 25.12.07 ". That account includes a sum of £_____ for advance service charge, itemised as “interim demand”.

 

That sum is for the following service charge year, the year to 31 December 2008. The sum is payable in addition to the ordinary service charge, so must be for a future period (a future service charge year): the total from the page headed “Interim Demand” is added to the total on the front page summary, establishing that the amount of the “Interim Demand” is in addition to the current year’s service charge. Accordingly, it can only be for a future period.

 

The tenant's covenant to pay service charge in the lease does not require the tenant to pay any sum on account of a future service charge year.

 

The provision in that clause requiring a payment on account only requires it to be "on account thereof". That is to say, on account of the "rateable proportion as certified by the Lessor's Accountants on the 31st day of December". In other words, on account of the costs and expenses incurred in the current year only.

 

 

For the above reasons, I am not liable to pay any sum in respect of any of the disputed service charge items.

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

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This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

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Useful information for tenants.

 

Just one query. If a landlord is in breach of his obligations relating to insurance does it always follow that the tenant does not have to pay the premium? In any event, presumably you would agree that once the landlord has complied the premium is payable.

 

About time the legislation was consolidated, don't you think?

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When the tenants own the freehold or are responsible for management through a tenant owned management company and (wearing their hats as landlord/management company) they fail to comply with legislation so that all or part of the service charge is irrecoverable, who is going to make up the shortfall? Presumably if professional managers are at fault they will, but what if there are no professional managers?

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Useful information for tenants.

 

Just one query. If a landlord is in breach of his obligations relating to insurance does it always follow that the tenant does not have to pay the premium? In any event, presumably you would agree that once the landlord has complied the premium is payable.

 

The argument the tenant will rely on in the Court/Tribunal is that in those circumstances it is not reasonable under section 19(1) of the Landlord and Tenant Act 1985 for the landlord to recover the premium.

 

That section gives the Court or tribunal a discretionary power to disallow a service charge item if it agrees that the item is not reasonable.

 

Although I have argued section 19(1) in detail in a seperate paragraph, it is worth making this specific point in relation to the insurance premium. A landlord will often fail to comply with his insurance covenant: they usually send only a copy of the policy schedule, and fail to produce (a) the policy and (b) the receipt for payment of the latest premium.

 

And no, the landlord cannot retrieve the position in the way you suggest. Once the landlord has issued legal proceedings, he has no way out. The proceedings are once-and-for-all. He cannot sue a second time.

 

If he loses this point, the premium is not recoverable at all because he cannot re-litigate the issue subsequently.

 

He may learn from his error, and comply with his covenant properly in future years of course.

 

 

When the tenants own the freehold or are responsible for management through a tenant owned management company and (wearing their hats as landlord/management company) they fail to comply with legislation so that all or part of the service charge is irrecoverable, who is going to make up the shortfall? Presumably if professional managers are at fault they will, but what if there are no professional managers?

 

This is an entirely different question, and one I don't propose to explore. You will understand that the tribunal has no jurisdiction where the tenant is also a freeholder, and that it declines to accept applications of this nature as it has no jurisdiction in a dispute between two freeholders.

 

The tenants will of course all be members of the management company, so there may be issues of breach of contract, breach of company law, breach of trust, and issues of land law involved. The property may even become unmanageable: it does happen.

 

It is, however, no longer a landlord and tenant dispute.

  • Haha 1

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This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

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As to insurance S. 19(1) says:

 

(1) Relevant costs shall be taken into account in determining the amount of a service charge payable for a period—

(a) only to the extent that they are reasonably incurred, and

 

(b) where they are incurred on the provision of services or the carrying out of works, only if the services or works are of a reasonable standard;

 

 

and the amount payable shall be limited accordingly.

 

Paragraph (a) has no application if the premium is reasonable. Paragraph (b) has no application to insurance. Arguing that the premum is irrecoverable because the landlord failed to comply with an obligation under the lease to supply a copy of the lease or with a request under S. 30A of the L&T Act 1985 would not seem to be an option, at least under S.19(1).

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Hi Ed999,

This is the situation im in, the new freeholder took over two years ago and has increased the maintance charge to double the amount we paid before, I was neva goivn a summary of cost or certified accounts. Then i found out after getting a solicitor involved that are details were not on the insurance either.

I strongly believe that the freeholder has been making us pay all the cost and not paying his half under the terms of the lease, example the electricity for the hall way lights which only come on when you enter ( it's a block of four flats) has increased from £200 a year to £1100.

I refused to pay the last installment for the maintance charge until i had proper aduitted accounts and certified by an accountan.

He's had some accounts done but the accountant has put in big letters that they are unadditted., and the freeholder point blank refuses to have them auditted.

There a many other things that are indispute but i would like to know that could i get my money back for the two years insurance ive paid and if i win in tribunal could i take him to court for damages.

The damages are we have had to take the flat off the market because of all the trouble ( freeholder become very hostile and the dispute of course). This is making my flat unsaleable, could i sue for this.

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As to insurance S. 19(1) says:

 

(1) Relevant costs shall be taken into account in determining the amount of a service charge payable for a period—

(a) only to the extent that they are reasonably incurred, and

 

(b) where they are incurred on the provision of services or the carrying out of works, only if the services or works are of a reasonable standard;

 

and the amount payable shall be limited accordingly.

 

Paragraph (a) has no application if the premium is reasonable. Paragraph (b) has no application to insurance. Arguing that the premum is irrecoverable because the landlord failed to comply with an obligation under the lease to supply a copy of the lease or with a request under S. 30A of the L&T Act 1985 would not seem to be an option, at least under S.19(1).

 

 

No, Aequitas. That's not what the section means.

 

Section 19(1)(a) gives the Court (or Tribunal) power to determin *whether* the item in question, in this case the insurance premium, is reasonably incurred.

 

Sub-section (1)(b) gives the Court (or tribunal) an additional power, in the case of services or building works, to determin whether the service or works were done to a reasonable standard.

 

So there are in fact two grounds there on which the tenant can challenge an item charged for services (e.g. legal services) or for building works (e.g. repairs or redecoration): firstly that the amount was not reasonably incurred, and secondly that the standard of the service provided, or work done, is not reasonable.

 

The Court (or tribunal) wants to know, though, what the tenant's reason is for saying the insurance item is not reasonably incurred.

 

If the landlord failed to comply with his insurance covenant (e.g. failed to produce, on request, a copy of the insurance policy or the receipt for the latest premium) the tenant can use that as a reason for arguing that the landlord has not acted reasonably, i.e. pursuant to section 19(1).

 

When considering reasonableness in this context, the breach of covenant is unreasonable in itself, without more, since the insurance covenant is what the tenant has put in issue.

 

The argument under section 30A is an entirely separate ground of objection, to which different considerations apply.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

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it's not just that he didn't supply us with a copy, none of the leaseholders are stated on the insurance only the freeholder, while under the terms of the lease we have to be onit.

So we've been paying towards the premium even though we were never on it.

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I cannot see how the landlord's failure to supply a copy of the insurance has any bearing on the resonableness of the amount of premium.

 

I am inclined to agree. However, I can understand the reasoning, and can understand why the argument would work in some situations - you cannot establish what the insurance covers without a copy of the insurance, and therefore cannot establish if it is reasonable or not fully(although you can clearly come to a educated guess) without a copy of the insurance details.

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I cannot see how the landlord's failure to supply a copy of the insurance has any bearing on the resonableness of the amount of premium.

 

Section 19(1)(a) says that "relevant costs shall be taken into account in determining the amount of a service charge payable for a period only to the extent that they are reasonably incurred".

 

The argument I am advancing is that the insurance premium was not "reasonably incurred".

 

My reason for saying this is the landlord's breach of his insuring covenant. If there was a breach of that covenant then the entire amount of the premium is unreasonable, because breach of the covenant (it being the covenant which the landlord is relying on) is itself evidence of unreasonableness, without anything more.

 

 

Secondly, the nature of the breach evidences a failure to pay the premium: no production, on request, of the latest premium receipt.

 

Therefore argue also that the entire amount of the premium is unreasonable as the premium was not paid.

 

And argue that, in the alternative, the entire amount is unreasonable as there is no evidence of payment. (Even if the landlord did pay the premium, the lack of evidence of payment sinks him, as the key issue in a hearing is evidence.)

 

 

Thirdly, the breach also means that no evidence has been produced that the amount of the premium is the amount stated in the service charge accounts.

 

Therefore argue also that the amount demanded cannot be reasonable if it is not the true amount paid by the landlord for the cover.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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it's not just that he didn't supply us with a copy, none of the leaseholders are stated on the insurance only the freeholder, while under the terms of the lease we have to be onit.

So we've been paying towards the premium even though we were never on it.

 

On the question of insurance, the basis of the argument which I outlined is the landlord's breach of his insuring covenant in the lease.

 

That covenant is worded in a million different ways in a million different leases. I used the example of a failure to produce, on request, a copy of the policy or a copy of the latest premium receipt.

 

The point you mention is merely another example of breach of that covenant. You simply have to modify the illustration I gave, to refer to the particular breach you are complaining of (in place of the examples which I used).

 

But the overall argument remains the same.

 

 

However, you nevertheless need to understand contract law. Although the landlord is in breach of covenant, it is not correct to say you are uninsured.

 

The insurance contract is valid if the freeholder has entered into it with an insurer, in respect of the premises, and paid the premium. The bald fact is, some insurance contracts don't allow the interest of the tenant or his mortgagee to be noted on the policy.

 

This does not invalidate the insurance cover, although the landlord is the only person who can claim on the policy.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

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Hi Ed999,

This is the situation im in, the new freeholder took over two years ago and has increased the maintance charge to double the amount we paid before, I was neva goivn a summary of cost or certified accounts. Then i found out after getting a solicitor involved that are details were not on the insurance either.

I strongly believe that the freeholder has been making us pay all the cost and not paying his half under the terms of the lease, example the electricity for the hall way lights which only come on when you enter ( it's a block of four flats) has increased from £200 a year to £1100.

I refused to pay the last installment for the maintance charge until i had proper aduitted accounts and certified by an accountan.

He's had some accounts done but the accountant has put in big letters that they are unadditted., and the freeholder point blank refuses to have them auditted.

There a many other things that are indispute but i would like to know that could i get my money back for the two years insurance ive paid and if i win in tribunal could i take him to court for damages.

The damages are we have had to take the flat off the market because of all the trouble ( freeholder become very hostile and the dispute of course). This is making my flat unsaleable, could i sue for this.

 

 

I suggest you read my original post very carefully, and make sure you understand what I'm saying in it in regard to summary of cost and certified accounts.

 

Did you make a written request under section 21 of the 1985 Act? If not, you have no right to a summary of cost certified by an accountant. Are there more than 4 flats? If not, you have no rights under section 21.

 

If there are 5 or more flats, consider making a written request under section 21 of the 1985 Act.

 

Does your lease require the landlord to have the accounts audited? If not, you have no claim for breach of contract, and no contractual right to an audit.

 

Under section 19(1) of the 1985 Act, you can challenge the insurance premium as unreasonably incurred. My previous posts in this thread indicate how to do this. It is a DEFENCE to a current demand for service charge, not a right to sue. You can ask, though, for any overpayment of service charge that you made in earlier years to be credited to you, and thus to be set-off against the amount now being demanded.

 

 

You can only get damages from a court, not from a tribunal.

 

You can sue for damages for breach of contract, breach of statutory duty (e.g. based on a breach of section 21), or negligence (e.g. negligent preparation of the service charge accounts), or fraud (e.g. falsely claiming in the service charge accounts for an amount not actually incurred).

 

You will get no damages unless you can prove loss.

 

You will not prove loss by suggesting you might have lost a sale of your flat, unless you produce e.g. a solicitor's bill for conveyancing costs you actually paid in a specific sale that actually collapsed, or other actual expenses of such an actual sale (e.g. estate agents' fees).

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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I have posted further details regarding defending a landlord's claim for the buildings insurance premium in a new thread -

 

http://www.consumeractiongroup.co.uk/forum/landlords-tenants/113588-service-charges-dispute-buildings.html#post1120868

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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The 1985 Act on its own just won't do you any good. It has been amended and re-amended since it was originally enacted.

 

You must also check the Landlord and Tenant Act 1987, the Housing Act 1996, and the Commonhold and Leasehold Reform Act 2002 for the repeals and amendments to the 1985 Act.

 

Some amendments made in the 1996 Act have since been repealled by the 2002 Act and replaced with other provisions.

 

Some of the provisions of the 2002 Act are not yet in force, so also check the five Commencement Orders made under the 2002 Act to establish what is in force and what is not.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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The 1985 Act on its own just won't do you any good. It has been amended and re-amended since it was originally enacted.

 

You must also check the Landlord and Tenant Act 1987, the Housing Act 1996, and the Commonhold and Leasehold Reform Act 2002 for the repeals and amendments to the 1985 Act.

 

Some amendments made in the 1996 Act have since been repealled by the 2002 Act and replaced with other provisions.

 

Some of the provisions of the 2002 Act are not yet in force, so also check the five Commencement Orders made under the 2002 Act to establish what is in force and what is not.

 

 

Are those sections you mentioned at the beginning of this thread suitable to use in a defence?? (obviously the breach has to relate to those sections)...i am assuming they are still in force and you have already allowed for amendments.

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Are those sections you mentioned at the beginning of this thread suitable to use in a defence?? (obviously the breach has to relate to those sections)...i am assuming they are still in force and you have already allowed for amendments.

 

 

All of the statutory provisions which I mentioned in my original post in this thread are ones which are currently in force, and any amendments have been taken into account. They can be relied on in a defence to a claim for payment of a service charge demand.

 

Which of those defences do you actually intend to rely on? I have additional details about all of them, and I will be happy to post the details here.

 

It may be of more help to you if I start by posting the details of those grounds that you intend to actually use.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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  • 3 weeks later...

I think the service charge for gardening a strip of grass in my street is unreasonable: it has risen from £200 to £2500 in five years. I have sent four letters challenging the cost, the last one a petition from everyone who pays the charge sent to the agent by recorded delivery but he has ignored them all. What should I do next?

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You can refuse to pay the Service Charge. Or you can choose to pay the rest of it, but not the item in dispute.

 

You will be in a stronger position if ALL the tenants refuse to pay, but whether or not you are the only one refusing to pay your legal rights are the same.

 

If the landlord sues, you could defend the claim under section 19(1) of the Landlord and Tenant Act 1985.

 

In that event you might choose to also challenge any or all of the service charge accounts served on you in the last six years, to obtain a refund of sums overpaid for this item previously.

 

 

As I say, the obvious ground to rely on would be section 19(1) of the Landlord and Tenant Act 1985, detailed in my original post in this thread at http://www.consumeractiongroup.co.uk/forum/landlords-tenants/113080-service-charges-dispute-suggestions.html#post1112848, challenging the item on the ground that it, being a relevant cost, was not reasonably incurred.

 

But you should check carefully each of the fifteen grounds of objection set out in my original post, of which section 19(1) is only one of them. It might strengthen your case if you can also challenge the service charge accounts on one or more of the other fourteen grounds. But it is not essential. A challenge can be made on one ground only.

 

 

Section 19(1) requires you to prove that the cost is unreasonable. To do so you MUST produce quotations for the cost of providing the service from at least two independent contractors, each of which is cheaper than £2,500 per year for doing the work in question, in order to stand any chance of succeeding under section 19(1).

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

Note

 

This is a self-help forum in which users share their experiences. Assistance is offered informally, without any assumption of liability. Use your own judgement; obtain advice from a qualified and insured professional if you have any doubts.

 

This posting gives general guidance only. It is not an authoritative statement of the law. Consult a Solicitor for specific advice before deciding on any course of action.

 

 

Further information:

 

Assured and Shorthold tenancies - A guide for tenants

 

Renting and Leasehold - Advice from Shelter

 

 

All posts are opinion only

 

 

If you've found my suggestions useful, please click on my star and add a comment

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  • 1 year later...

HI

 

hopefully this thread is still active, as i need some advice.

 

has anyone else had eperience of a freeholder charging £500 for a 'type 2 asbestos survey'? is this the standard or average cost?

 

notification was received that this survey had to be carried out, but no warning as to the what seems to be to be an excess charge for a tiny common hallway 10 foot by 5 foot. my complaint on this point is that if some indication as to the pending cost was provided earlier i could have obtained some quotes for this work myself and maybe got the work done at a lesser cost.

 

a copy of the invoice for this work has not been provided. do i have the right to request a copy?

 

i also noted on checking past statements the following

 

increase in management fees without prior notification

a charge for an insurance valuation £300 - no notification/warning that this was being planned and that both leaseholders would be charged

increase in building insurance. once again no notification.

 

prior to the new freeholder, the previous would always split the cost of the works 3 ways to include himself, did we just have a kindly freeholder? or should the new freeholder do the same?

 

final query on this point is that the freeholder now seems to have his own company that he calls in for repairs and does not get quotes or give us the 2 leaseholders the opportunity to also obtain quotes.

 

any advice greatly appreciated

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  • 5 months later...

I really hope someone can help me. I just received a service charge bill for £6,000 for 'roof repairs'. My flat is on the ground floor and there is one other flat above me so the roof repair is essentially £12,000 which seems extremely excessive. My freeholder is the council and there are 7 properties in the block. However, my property has no communal areas. I also receive regular bills for communal areas for things such as lift repairs, entrance doors, lighting etc none of which affect me as I don't have any communal areas.

 

Does anyone know if I have any comeback? I requested the surveyors report stating the roof needed repairing but it was literally one shhet of paper which stated an inspection had been done at ground level, i.e. they never even got on the roof to look.

 

Any help would be really really appreciated.

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