BIR/41UB/LIS/2019/0034 — service charge decision
In BIR/41UB/LIS/2019/0034, decided 12 October 2020, the First-tier Tribunal considered 6 disputed service charge items at 10 Ashworth House, Cannock Road, Cannock and reached a mixed result: 4 items were reduced or disallowed. Full decision on GOV.UK below.
Property: 10 Ashworth House, Cannock Road, Cannock
Decision date: 12 October 2020
Full decision: Read on GOV.UK
Managing agent named in the decision: Pennycuick Collins.
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Major works (2018-19) | £9,727.43 | £5,472.14 | Reduced | Costs unreasonably incurred (s19(1)(a)), Apportionment error, Standard not reasonable (s19(1)(b)) |
| Buildings insurance (2017-18) | £938.18 | £487.45 | Reduced | Apportionment error, Not payable under the lease |
| Buildings insurance (2018-19) | £1,057.87 | £549.63 | Reduced | Apportionment error, Not payable under the lease |
| Other charges (2018-19) | £1,868.46 | £0 | Disallowed entirely | Not payable under the lease |
| Reserve fund contributions (2018-19) | — | — | Allowed in full | — |
| Administration charges (2018-19) | £270 | £270 | conceded | — |
Section 20C order: granted.
Key passages (verbatim)
“the Tribunal did not consider the sum demanded on account for the major works to the roof of £125,000.00 to be a reasonable sum… the Tribunal determined that a sum of £75,000.00 on account for the costs of the works to the roof, to include any professional fees and all VAT, to be reasonable.”
“Year ending 31st March 2018 – a reduction of £450.73 (being the Tribunal's reduction in the apportionment of the premium for the buildings insurance premium from £938.18 to £487.45)”
“Year ending 31st March 2019 – a reduction of £4,908.93 (being the Tribunal's reduction in the reasonable costs of the major works to the roof of £4,255.29, the reduction in the apportionment of the premium for the buildings insurance premium from £1,057.87 to £549.63 and the deduction of £145.40 for the insurance claims handling fee).”
“under the Fourth Schedule of the Leases, the lessees are only liable for the costs of insuring the property and the fees of any managing agents for the collection of rents, general management and administration. In addition, the Tribunal noted that Pennycuick Collins instructed insurance brokers to obtain terms and did not consider an additional fee for such services to be appropriate.”
“The Applicants provided no submissions in relation to the transfer of the funds to the reserves – the Tribunal considered the Respondent's actions in this regard to be reasonable.”
“at the CMC, the Applicants admitted liability to pay the administration charges, totalling £270.00 each”
“the Tribunal was surprised that the Respondent had failed to consider any alternate roofing systems to the Bauder system.”
“In recalculating the figures, the lessees were being penalised for an error made by the lessor. The floor area of the flat, in comparison to the remaining properties at Ashworth House, had not changed.”
“Ms Cannon-Leach provided no information as to why the residential insurance would need to be for 35% of the building value when the Leases clearly stated that it only needed to be two years' loss of ground rent (£70.00 per residential unit) nor did she confirm as to how much of the insurance premium related to this or to the three years' loss of rent which was attributable to the commercial rents.”
“At this point, Mr Kalia became abusive and threatening towards the members of the Tribunal, so the Tribunal left.”
This summary is assembled from the structured record of the published decision; amounts appear only where the tribunal stated them. Always rely on the full decision itself.