CHI/00HY/LSC/2021/0091/SS — service charge decision
In CHI/00HY/LSC/2021/0091/SS, decided 4 May 2022, the First-tier Tribunal considered 13 disputed service charge items at The Old Rectory, Malmesbury Road, Chippenham, Wiltshire SN15 1PR and reached a mixed result: 9 items were reduced or disallowed. Full decision on GOV.UK below.
Property: The Old Rectory, Malmesbury Road, Chippenham, Wiltshire SN15 1PR
Decision date: 4 May 2022
Full decision: Read on GOV.UK
Managing agent named in the decision: Ten Property Management Limited.
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Other charges (2018) | — | — | Reduced | Apportionment error |
| Buildings insurance (2018-2021) | — | — | Disallowed entirely | Not payable under the lease |
| Other charges (2018-2021) | — | — | Disallowed entirely | Not payable under the lease, Landlord could not evidence the cost |
| Utilities (2019) | £957 | £957 | Allowed in full | — |
| Utilities (2020) | £549 | £485.36 | Reduced | Costs unreasonably incurred (s19(1)(a)) |
| Utilities (2021) | £364 | — | Reduced | Landlord could not evidence the cost |
| Other charges (2019) | £113 | £0 | Disallowed entirely | Works not necessary |
| Repairs & maintenance (2019) | £222 | — | Allowed in full | — |
| Repairs & maintenance (2019) | £96 | — | Allowed in full | — |
| Legal & professional costs (2021) | £300 | £300 | Allowed in full | — |
| Management fees (2019) | £500 | £250 | Reduced | Fee excessive for service delivered |
| Management fees (2020) | £600 | £300 | Reduced | Fee excessive for service delivered |
| Management fees (2021) | £600 | £300 | Reduced | Fee excessive for service delivered |
Section 20C order: granted.
Key passages (verbatim)
“service charge expenditure for the year 2018 should be apportioned on the basis of the calculations made by Mr Stamford to reflect the time which each leaseholder had been in residence as a leaseholder in the property in 2018.”
“payments of insurance are not included within the service charge provisions of the lease, but are instead regulated separately as Insurance Rent. Accordingly, the Tribunal has no jurisdiction in relation to the demands for the costs of insurance.”
“The Tribunal finds that no payment is due by the Applicants for Greensquare costs; the Tribunal can make a Decision only on the basis of the evidence before it.”
“Y/E 31 Dec 2019 - £957 shown in accounts. Bills provided covering period 11 Oct 2018 - 9 Jan 2020 total £956.80.”
“Y/E 31 Dec 2020 - £549 shown in accounts. Bills provided covering period 10 Jan 2020 to 20 Jan 2021 total £485.36.”
“Y/E 31 Dec 2021 - £364 shown in accounts. 3 bills in bundle total £232.08 but these only cover the period up to 12 Oct 2021. There would have been another bill issued in January 2022 but that hasn't been provided within the bundle.”
“The Respondent had failed to provide receipts (in breach of the terms of the lease) and answers which could have resolved many of the issues and removed the need for the Applicants to come to the Tribunal. There were poor accounting practices too, including not holding a sinking fund in a separate account and the issuing of service charge demands in a manner not consistent with the law. Further, the Respondent was seeking to charge Greensquare invoices for insurance of the garages, which showed that it was again not familiar with the terms of the lease. The Tribunal further notes the attempts by the Respondent to claim interest on sums which were not overdue because they become due only once lawful demands are made of the Applicants.”
“Ms Davey accepted that demands to date had not been accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.”
“The Tribunal noted that Ms Davey had spoken of the accounts being audited but, as she accepted, there was no evidence that an audit, in its truest sense, had ever taken place. The Tribunal did note that one set of accounts had been the subject of an independent examiner's statement, but that is not the same as an audit.”
“The Tribunal believed that the Applicants had been involved in too much "detective work" here. The important figures are contained in the invoices and there should, generally, be no requirement to analyse meter readings and energy provider charges.”
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.