LON/00BG/LSC/2022/0122 — service charge decision
In LON/00BG/LSC/2022/0122, decided 30 January 2023, the First-tier Tribunal considered 14 disputed service charge items at Various flats at 9 Rearden Path, London E1W 2AN and reached a mixed result: 8 items were reduced or disallowed. Full decision on GOV.UK below.
Property: Various flats at 9 Rearden Path, London E1W 2AN
Decision date: 30 January 2023
Full decision: Read on GOV.UK
Managing agent named in the decision: Residential Management Group Ltd (RMG).
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Cleaning (2020-21) | £8,914 | £5,500 | Reduced | No Section 20 consultation |
| Cleaning (2021-22) | £11,500 | £5,500 | Reduced | No Section 20 consultation |
| Cleaning (2022-23) | — | £5,500 | Reduced | No Section 20 consultation |
| Repairs & maintenance (2020-21) | £582 | £0 | Disallowed entirely | Costs unreasonably incurred (s19(1)(a)) |
| Repairs & maintenance (2020-21) | £84 | £0 | conceded | Other grounds |
| Other charges (2020-21) | — | — | conceded | Other grounds |
| Other charges (2020-21) | £6,601.92 | £5,500 | Reduced | No Section 20 consultation |
| Buildings insurance (2020-21) | £16,188.86 | £0 | conceded | Other grounds |
| Utilities (2020-21) | — | — | conceded | Other grounds |
| Management fees (2020-21) | £9,900 | £9,460 | Reduced | Fee excessive for service delivered |
| Management fees (2021-22) | £10,200 | — | Reduced | Fee excessive for service delivered |
| Management fees (2022-23) | — | — | Reduced | Fee excessive for service delivered |
| Repairs & maintenance (2020-21) | £1,043 | — | Allowed in full | — |
| Legal & professional costs (2020-21) | — | — | Allowed in full | — |
Key passages (verbatim)
“the accounts for 2020-21 refer to a 'Cleaning Contract' at a budgeted cost of £9,750 and an actual cost of £8,914... it is a single contract... it is covered by those requirements and should have been consulted on. The Respondent did not consult and has not sought dispensation. Therefore, the actual charges for each relevant year must be limited to £5,500.”
“The budget for 2021-22 puts the 'Cleaning Contract' at £11,500. These sums are considerably in excess of the limit for the aforementioned statutory consultation requirements... the actual charges for each relevant year must be limited to £5,500.”
“the charges for cleaning are limited to £5,500 (£250 per lessee) for each year.”
“Complete Security Installations invoiced on 12th November 2020 for a charge of £582... the only reasonable conclusion is that, for whatever reason, the Applicants did not receive any value from this work and the costs set out in the invoice cannot be regarded as having been reasonably incurred.”
“The Respondent conceded that service charges arising from an invoice dated 20th October 2020 from Reactive Contracting Group for £84 would not be payable because the work was aborted.”
“The Respondent conceded that its predecessor-in-title should have carried out an asbestos survey at its own cost when completing the development and, therefore, that they would not charge for the one they had arranged for themselves.”
“there can be no doubt that RMG have not communicated well, either in their response times, the provision of information, or explanations for the service charges. More active management and better communication would have resulted in a better level of understanding and possibly even have avoided these proceedings.”
“Unfortunately, neither party had appreciated the full extent of their obligation to disclose documents with their statement of case and the hearing bundle prepared by the Applicants did not contain documents which each wished to rely on.”
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.