BIR/41UB/LIS/2019/0049 — service charge decision
In BIR/41UB/LIS/2019/0049, decided 12 October 2020, the First-tier Tribunal considered 7 disputed service charge items at 10 & 12 Ashworth House, Cannock Road, Cannock and reached a mixed result: 5 items were reduced or disallowed. Full decision on GOV.UK below.
Property: 10 & 12 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 | Insurance not market tested, Apportionment error, Not payable under the lease |
| Buildings insurance (2018-19) | £1,057.87 | £549.63 | Reduced | Insurance not market tested, Apportionment error, Not payable under the lease |
| Buildings insurance (2019-20) | — | £361.14 | Reduced | Insurance not market tested, Apportionment error, Not payable under the lease |
| Other charges (2018-19) | £1,868.46 | £0 | Disallowed entirely | Not payable under the lease, Costs unreasonably incurred (s19(1)(a)) |
| Administration charges (2018-19) | £270 | £270 | Allowed in full | — |
| Reserve fund contributions (2018-19) | — | — | Allowed in full | — |
Section 20C order: granted.
Key passages (verbatim)
“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.”
“Feb 2018 - Feb 2019: 80% of £9,544.09 x 6.384160% = £487.45”
“Feb 2019 - Feb 2020: 80% of £10,761.64 x 6.384160% = £549.63”
“Feb 2020 - Feb 2021: 80% of £7,070.96 x 6.384160% = £361.14”
“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.”
“the Applicants, at the CMC, confirmed that the items of expenditure in dispute related to the major building works…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.”
“The Tribunal considered that an 11.5% charge for professional fees in overseeing a replacement of a roof to be excessive.”
“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.