This is just a quick post to draw attention to this case in the Upper Tribunal. It is about apportioning a service charge among various residents of a lakeside development. Normally the actual apportionment (eg 1.73% each) would be set out in the lease, but as the developer intended to build more properties later the leases contained a clause saying that each tenant would pay a fair apportionment of the cost of services:
to be determined by the surveyor for the time being of the Lessor whose determination shall be final and binding
The surveyor carried out a formal apportionment, the tenants objected and the case found its way to the LVT (now the FTT) and then on appeal to Martin Rodger QC the Deputy President of the Upper Tribunal.
The questions were
- How can the “final and binding” determination in the lease fit in with the terms of s27A LTA 1985? and
- If applicable, what is the correct split?
Now lots of leases have provisions that charges have to be certified by agents, accountants and so on before being payable. The LVT/FTT have had no problem in overruling them when they want, but a “final and binding” determination is something different.
Superficially it ought to be easy as s27A gives lots of powers to the tribunals to decide how much service charges should be and who they are payable by. It goes on to say that
(6) An agreement by the tenant of a dwelling (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—
(a) in a particular manner, or
(b) on particular evidence,
of any question which may be the subject of an application
However, one of the matters which cannot be brought before the tribunal is any matter which
(4) a) has been agreed or admitted by the tenant,
It was clear law that a tenant couldn’t raise the actual apportionment set out in the lease (eg 1.73%) so was this similar? Some previous decisions seemed to think so. And many tribunal decisions don’t need to alter apportionments, just the figures themselves, in fact apportionment disputes are very rare (up until now) so is this caught by s27A(6) at all?
The decision this time was clear. The Surveyor’s decision was wholly void, and was treated as not having been made. The matter had to be decided afresh by the tribunal. The LVT had done this, and the Upper Tribunal dismissed the landlord’s appeal.
There is an excellent (and far more detailed) summary of the decision in the Law and Lease blog and another in Nearly Legal , so I’ll just stop here. But this is a decision that will see a lot of action in the future, I’m sure.