Decision summary

CAM/22UG/LSC/2021/0043 — service charge decision

In CAM/22UG/LSC/2021/0043, decided 16 August 2022, the First-tier Tribunal considered 20 disputed service charge items at Various Properties at Quayside Drive / Colne View, Colchester and reached a mixed result: 9 items were reduced or disallowed. Full decision on GOV.UK below.

Property: Various Properties at Quayside Drive / Colne View, Colchester
Decision date: 16 August 2022
Full decision: Read on GOV.UK

Managing agent named in the decision: Firstport Property Services Ltd.

What was challenged and what the tribunal decided

ItemDemandedAllowedOutcomeGrounds
Buildings insurance (2020)£84,054—ReducedCosts unreasonably incurred (s19(1)(a)), Landlord could not evidence the cost
Buildings insurance (2021)£84,373—ReducedCosts unreasonably incurred (s19(1)(a)), Landlord could not evidence the cost
Utilities (2015-2021)——Allowed in full—
Management fees (2015-2021)——ReducedFee excessive for service delivered, Poor standard of work
Other charges (2013-2015)——Disallowed entirelyEstoppel or prior agreement
Other charges (2017)£540—Allowed in full—
Repairs & maintenance (2017)£44,461.34—Allowed in full—
Major works (2017)£43,200—ReducedNot payable under the lease
Repairs & maintenance (2017-2020)£836.39—Allowed in full—
Cleaning (2017-2020)£40,849.43—Allowed in full—
Administration charges (2017)£13,955.40—Disallowed entirelyDuplication of charges, Not payable under the lease
Repairs & maintenance (2017-2020)£7,016.84—Allowed in full—
Reserve fund contributions (2018)£119,698—Disallowed entirelyNot payable under the lease, Other grounds
Cleaning (2020)£6,444—Allowed in full—
Lifts (2020)£1,627—Allowed in full—
Other charges (2015-2020)£13,986—Allowed in full—
Other charges (2020)£456—Disallowed entirelyNot payable under the lease
Major works (2017)£18,289.90—ReducedNot payable under the lease
Repairs & maintenance (2017)£5,726.40—Allowed in full—
Legal & professional costs (2017)£1,194—Allowed in full—

Section 20C order: granted.

Key passages (verbatim)

“We determine there should be a discount of 20% in the insurance service charge payable by the Applicants, for the 2 years ending 30 September 2020 and 30 September 2021.”
On buildings insurance
“We determine there should be a discount of 20% in the insurance service charge payable by the Applicants, for the 2 years ending 30 September 2020 and 30 September 2021.”
On buildings insurance
“We therefore allow all utilities costs, as being costs reasonably incurred and reasonable in amount.”
On utilities
“Applying Kullar, the Tribunal determines that the service charges payable by the Applicants for management fees should be reduced by 40% for the years from July 2015 to September 2021.”
On management fees
“We determine that it is stale, and should not be allowed to proceed on the grounds that the Tribunal does not have jurisdiction over matters which have been agreed or admitted.”
On other charges
“We therefore find that this was a cost which was reasonably incurred and reasonable in amount.”
On other charges
“Needless to say, the Tribunal is most concerned that this substantial sum of money has not been recovered. The First Respondent seemingly held that money in trust for the leaseholders. ARMA members must comply the RICS Service Charge Management Code. At 7.10 the Code makes clear that 'service charge funds for each property should be identifiable and either placed in a separate bank account, or in a single client / trust account where the account records of the manager separately identify the fund attributable to each property.' Whilst the First Respondent might have done this itself, it does not appear that this fiduciary duty was thought to extend to ensuring the monies went into a trust account when this substantial sum of money was passed to Rylands. The First Respondent was content to transfer it to a 'normal account', which we understood to mean was not a trust account of the kind envisaged. Moreover, we are not convinced on the evidence before us that adequate steps have since been taken to recover these monies.”
Of Respondents (Firstport Property Services Ltd)
“In short, therefore, the Tribunal can place only the most limited reliance on the Respondents' accounts.”
Of Respondents (accounts quality)
“it was absolutely clear to the Tribunal that he did not have a sufficient mastery of the facts and figures and the wider picture of goings on within this Estate.”
Of Respondents (Nicholas Franklin – witness)
“the Respondents are property professionals, and frankly can do better. There has been a lack of transparency on the part of the Respondents, with documents being destroyed (which they were unwise to do), and difficulty providing essential data and explaining documents such as invoices.”
Of Respondents (general)

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.