LON/00BK/LSC/2021/0431 — service charge decision
In LON/00BK/LSC/2021/0431, decided 17 October 2022, the First-tier Tribunal considered 9 disputed service charge items at Aviary House, 23 Wilfred Street, London, SW1E 6PR and reached a mixed result: 5 items were reduced or disallowed. Full decision on GOV.UK below.
Property: Aviary House, 23 Wilfred Street, London, SW1E 6PR
Decision date: 17 October 2022
Full decision: Read on GOV.UK
Managing agent named in the decision: Residential Management Group (RMG).
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Buildings insurance (2020) | — | £32,908.94 | Reduced | Costs unreasonably incurred (s19(1)(a)), Insurance not market tested, Undisclosed insurance commission |
| Buildings insurance (2021) | — | £29,026.36 | Reduced | Insurance not market tested, Costs unreasonably incurred (s19(1)(a)) |
| Major works (2020) | £5,616 | £5,616 | Allowed in full | — |
| Major works (2021) | £14,457.78 | £14,457.78 | Allowed in full | — |
| Utilities (2021) | £4,677.55 | £2,123.78 | Reduced | Costs unreasonably incurred (s19(1)(a)) |
| Utilities (2020) | £11,313.37 | £1,567.63 | Reduced | Costs unreasonably incurred (s19(1)(a)) |
| Utilities (2021) | £15,624.47 | £2,755.49 | Reduced | Costs unreasonably incurred (s19(1)(a)) |
| Staffing & concierge (2020) | — | £39,787.08 | Allowed in full | — |
| Staffing & concierge (2021) | — | £90,357.57 | Allowed in full | — |
Section 20C order: granted.
Key passages (verbatim)
“the tribunal determines that the cancellation charge is not payable by the Applicants. It determines that the additional costs of insurance for the period are not payable. It therefore determines that the reasonable costs for insurance for that year is £32,908.94.”
“It determines that the reasonable cost of insurance for the year ended 31st December 2021 is £29,026.36.”
“The tribunal determines that the amount payable in respect of the major works is £5,616 for the year ended 31st December 2020.”
“The tribunal determines that the amount payable in respect of the major works is £5,616 for the year ended 31st December 2020 and £14,457.78 for the service charge year ended 31st December 2021.”
“The tribunal determines that the amount payable in respect electricity charges for the service charge year is £2,123.78. This is the amount charged (namely £4,677.55) reduced by the additional charges of £2,553.77.”
“The tribunal determines that the amount payable in respect of gas charges for the year ending 2020 is £1,567.63. This is the amount charged (£11,313.37) less the additional charges of £5,966.47 and less the sums received from Vital Energi for the year ended 31.12.2020 of £3,779.17.”
“The tribunal is surprised that the Respondent is unable to provide evidence of market testing. The standard commercial form of communication is email rather than telephone and the tribunal would have expected to see email communications in connection with evidence of market testing. In any event, the Respondent was not able to tell the tribunal who it was who had spoken to the broker about this, nor the date on which it happened, nor provide any note or other record of any call made. In the light of the absence of evidence the tribunal concludes on the balance of probability that there was no market testing of the insurance.”
“The Respondent appears to have been passive and allowed a detrimental financial situation to arise. The tribunal agrees with the Applicants that the Respondent was careless about the accrual of additional charges and therefore determines that the charges have not been reasonably incurred.”
“The Respondent also has an obligation to be transparent about any commission received. This information was necessary to the tribunal to help it understand why the policy was cancelled and additional costs incurred, but no confirmation was provided by the Respondent as to whether commission was received.”
“The Respondent has returned leaseholder money incorrectly to Vital Energi and it needs to take responsibility for reclaiming the monies.”
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.