Partners in a partnership would be well advised to keep comprehensive documentation at every stage...
A case recently decided by the First-tier Tribunal (FTT) serves as a reminder to tenants to check the terms of their leases and to monitor the service charges they are asked to pay.
The tenant of a ground-floor flat sought a determination of liability to pay service charges under Section 27A of the Landlord and Tenant Act 1985, in respect of the 2017-2022 service charge years. He challenged various charges, on grounds that they had not been reasonably incurred or that there was no evidence that they had been incurred at all.
Although the FTT upheld some of the charges, including for electrical repairs and general maintenance, the tenant succeeded in a number of respects. The FTT concluded that there was a 'striking discrepancy' between the amounts charged for cleaning services and open-market quotations for such services. It reduced the amount payable for each of the relevant years to £5,292, from an average of more than £10,300 per year.
The FTT also reduced the amount payable in respect of professional fees for 2020 and 2021 from nearly £2,000 to less than £500. It further concluded that legal fees relating to defaulting tenants were not recoverable from other tenants under the lease, and that certain accounting services the landlord had charged for should have been covered by the basic management fee. The FTT also reduced the management fee by 30 per cent, going back to 2007, on the basis that several aspects of the building's management fell below the standards set out in the RICS Service Charge Residential Management Code.