Correct service charge procedures
Residential leases usually contain detailed procedures that must be followed before valid demands for service charges can be raised. Some landlords sidestep such requirements for reasons of convenience, but an Upper Tribunal (UT) decision has underlined the hazards inherent in such a course.
The case of Jetha & Anr v Basildon Court Residents Company Limited (2017) concerned a prestigious block of 56 flats, the common parts of which were owned by a services company.
The tenants of 11 of those flats had refused to pay service charges due to various concerns about the property’s management. The company launched proceedings to recover arrears of more than £40,000.
The First-tier Tribunal (FTT) found that the lease did not provide for the collection of interim service charges on account. Those charges and contributions to a sinking fund maintained by the company had not been agreed at an annual general meeting (AGM), as required by the lease.
The FTT, however, found that the disputed bills were payable on the basis that the procedure employed by the company was well established and the tenants had never objected to it in the past.
In upholding the tenants’ challenge to the latter ruling, the UT noted that the requirement that service charges be approved by a majority at an AGM was an important safeguard. It was neither unfair nor unjust for the tenants to rely upon the letter of the lease and, in the circumstances, the disputed bills were not payable.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
The benefits of writing articles for your organisation
How to create a profile for your organisation and publish for free.
No Falls Week. The importance of safe working at height
What to expect and what is on offer to avoid accidents.
Scottish Government action to reach net-zero targets
Retrofit expert group highlight critical actions needed.
A forward thinking, inclusive global community of members.
From engineered product life-spans, to their extension.
Circular economy in the built environment
A brief description from 2021. Where are we now?
Mental Health Awareness Week with ABS
Architects Benevolent Society programme of activity.
CLC publishes domestic retrofit competency framework
Roadmap of Skills for net zero.
May 13-19: Moving more for our mental health.
Understanding is key to conservation.
Open industry engagement survey seeks responses
Institutions and the importance of engagement.
National Retrofit Hub unveils new guide
Digital Building Logbooks and Retrofit: An Introduction.
Enhancing construction site reporting efficiency
Through digitisation and the digital revolution.
Noise in the built environment
BSRIA guide TG 20/2021.
17,000 people suffer conditions as a result of exposure to excessive noise at work.
Turning down the noise: Auditory health
A pervasive risk with far-reaching consequences.
Getting the most out of heat pumps and heating
How heat pumps work and how they work best.
Electrotechnical excellence, now open for entries.