CHI/23UC/LSC/2021/0007 — service charge decision
In CHI/23UC/LSC/2021/0007, decided 3 December 2021, the First-tier Tribunal considered 6 disputed service charge items at Lodge 77, Isis Lakes, Spine Road East, South Cerney, Glos and reached a mixed result: 5 items were reduced or disallowed. Full decision on GOV.UK below.
Property: Lodge 77, Isis Lakes, Spine Road East, South Cerney, Glos
Decision date: 3 December 2021
Full decision: Read on GOV.UK
Managing agent named in the decision: Mainstay Residential Ltd.
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Other charges (2015-16) | — | — | Disallowed entirely | Apportionment error |
| Management fees (2015-16) | — | £25,311 | Reduced | Fee excessive for service delivered, Costs unreasonably incurred (s19(1)(a)) |
| Management fees (2016-17) | — | £24,702 | Reduced | Fee excessive for service delivered, Costs unreasonably incurred (s19(1)(a)) |
| Management fees (2017-18) | — | £22,049 | Reduced | Fee excessive for service delivered, Costs unreasonably incurred (s19(1)(a)) |
| Management fees (2018-19) | — | £23,996 | Reduced | Fee excessive for service delivered, Costs unreasonably incurred (s19(1)(a)) |
| Other charges | — | — | Allowed in full | — |
Section 20C order: granted.
Key passages (verbatim)
“The Applicants have failed to establish a legal basis for a sharing of costs incurred for facilities enjoyed by owners of lodges on both the Isis and Windrush Sites… the full amount of those costs must be borne by the lodge owners on the Isis Site alone and the Applicants are therefore liable for a 1/100th share.”
“The Tribunal determines that a reasonable total sum for an overall management fee for the Landlord's Property is 13% of the total costs of services provided, excluding management, in any accounting year.”
“The Tribunal determines that a reasonable total sum for an overall management fee for the Landlord's Property is 13% of the total costs of services provided, excluding management, in any accounting year.”
“The Tribunal determines that a reasonable total sum for an overall management fee for the Landlord's Property is 13% of the total costs of services provided, excluding management, in any accounting year.”
“The Tribunal determines that a reasonable total sum for an overall management fee for the Landlord's Property is 13% of the total costs of services provided, excluding management, in any accounting year.”
“this would be justifiable as a form of pest control provided it was lawful under the general law and met the requirements of the paragraph 15 of Part 1, Schedule 3 of the Lease held by the Applicants.”
“The Tribunal considers that the continuing lack of any management agreement between the Respondent and Mainstay means that Mainstay can set its own parameters within which the services under the Lease are delivered. It is not possible for the Tribunal to just use the oral and written evidence of Neelam Samra given in this case on its own to determine whether the management fees are reasonable when, taken as a whole, and in the opinion of the Tribunal using its expertise, they exceed the range of charges for management services in the market.”
“There is no evidence of how the base fee was set when Mainstay began as managing agents except that they were based on those previously charged by Savills. There is no suggestion that Mainstay was appointed after competitive tender.”
“The Tribunal also ventures to suggest that it may be expedient for the future for the vexed issue of charges for facilities shared between the two sites to be addressed by the Respondent in conjunction with all leaseholders with a view to exploring whether there is a basis for the costs to be shared across all 182 lodges. If this is not done, the sense of unfairness will remain.”
“It could not have been contemplated in 1994 that 'visitors' would be a future stream of owners and tenants of another 82 lodges next door.”
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.