MAN/00EU/LSC/2022/0052 — service charge decision
In MAN/00EU/LSC/2022/0052, decided 5 July 2023, the First-tier Tribunal considered 6 disputed service charge items at 18, Archers Green Road, Warrington WA5 7XS and reached a mixed result: 3 items were reduced or disallowed. Full decision on GOV.UK below.
Property: 18, Archers Green Road, Warrington WA5 7XS
Decision date: 5 July 2023
Full decision: Read on GOV.UK
Managing agent named in the decision: Revolution Property Management Limited.
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Buildings insurance (2016-2022) | — | £0 | Disallowed entirely | Not payable under the lease |
| Reserve fund contributions (2016-2022) | — | — | Disallowed entirely | Not payable under the lease, Other grounds |
| Management fees (2016-2022) | — | — | Reduced | Costs unreasonably incurred (s19(1)(a)), Fee excessive for service delivered, Other grounds |
| Management fees (2022) | — | — | Allowed in full | — |
| Cleaning (2022) | — | — | Allowed in full | — |
| Other charges (2022) | — | — | Allowed in full | — |
Section 20C order: granted.
Key passages (verbatim)
“directors' and officers' liability insurance: the premium costs incurred or budgeted in the service charge years 2016-2022 (inclusive) are not reasonably incurred and the Applicant is not liable to pay them”
“the establishment of a de facto sinking fund is in breach of the terms of the Applicant's lease and the re-distribution of surplus funds has not been effected proportionately to leaseholders' contributions and is unreasonable accordingly”
“the actual and budgeted management fees for the service charge years 2016-2022 (inclusive) have not been reasonably incurred and are reduced by 40%”
“the re-allocation of the management fee as between the leaseholders of the apartments and the leaseholders of the houses is reasonable and the Applicant is liable to pay a 'reasonable proportion' thereof”
“the budgeted amounts for waste collection and general maintenance insofar as it relates to pest control are reasonable and the Applicant is liable to pay a 'reasonable proportion' thereof”
“a 'reasonable proportion' of the Estate service charge payable by the Applicant is 1/149th”
“the Tribunal notes that the Respondent and Mr. Burkitt were aware from at least the date of issue of the 2014 Decision that there is no provision in the Lease permitting the charging of the D&O insurance premium as service charge”
“the collection of funds for the establishment of reserve funds and the failure by the Respondent's managing agents to ensure that surplus funds were re-distributed at the end of each service charge year constituted the de facto establishment of a sinking fund in the absence of any provision in the Lease permitting it”
“the refund of the accumulated surplus on the reserve fund without regard to the differing proportions payable by the leaseholders resulting in a "windfall" for some leaseholders at the expense of others”
“the delay in the preparation of accounts such that the 2020 accounts are still in draft form and the 2021 and 2022 accounts are yet to be issued”
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.