MAN/OODA/LSC/2022/0015 & others — service charge decision
In MAN/OODA/LSC/2022/0015 & others, decided 25 July 2023, the First-tier Tribunal considered 10 disputed service charge items at 115, 32 & 72 Candle House, 1 Wharf Approach, Leeds, LS1 4GH and reached a mixed result: 6 items were reduced or disallowed. Full decision on GOV.UK below.
Property: 115, 32 & 72 Candle House, 1 Wharf Approach, Leeds, LS1 4GH
Decision date: 25 July 2023
Full decision: Read on GOV.UK
Managing agent named in the decision: Watsons Property Management.
What was challenged and what the tribunal decided
| Item | Demanded | Allowed | Outcome | Grounds |
|---|---|---|---|---|
| Major works (2017-2020) | £71,679.15 | £31.99 | Reduced | Works not necessary, Costs unreasonably incurred (s19(1)(a)) |
| Legal & professional costs (2016-2021) | £176,099.68 | £132,074.76 | Reduced | Costs unreasonably incurred (s19(1)(a)), Other grounds |
| Legal & professional costs (2020) | £5,000 | £0 | Disallowed entirely | Costs unreasonably incurred (s19(1)(a)) |
| Other charges (2020) | £14,099.41 | £14,099.41 | Allowed in full | — |
| Management fees (2016-2021) | £47,785.49 | £32,644.51 | Reduced | Costs unreasonably incurred (s19(1)(a)), Fee excessive for service delivered, Works not necessary |
| Other charges (2020) | £5,280 | £5,280 | Allowed in full | — |
| Other charges (2016-2021) | £857,790.42 | £857,790.42 | Allowed in full | — |
| Other charges (2016-2021) | £9,233.44 | £9,233.44 | Allowed in full | — |
| Other charges (2016-2021) | £57,012.60 | — | Reduced | Costs unreasonably incurred (s19(1)(a)), Duplication of charges, Works not necessary |
| Legal & professional costs (2017-2021) | £6,876.51 | £5,741.71 | Reduced | Costs unreasonably incurred (s19(1)(a)) |
Section 20C order: partial.
Key passages (verbatim)
“In our view, and in particular having regard to the before and after photographs we find that a significant proportion of these works went beyond renewing and replacing and were improvements.”
“we estimate that 25% of the legal costs was solely attributable to the Directors. We discount this element of the Service Charge to this extent accordingly.”
“We do not accept that the sum of £500 paid to Mr Walker for CCTV evidence retrieval is a sum reasonably incurred. This seems to us to be an inflated cost which is not reasonably payable.”
“the installation of pre-payment meters, whilst not necessarily the only possible solution to the problems faced by Candle House, was a reasonable decision to have taken, in line with the independent professional report”
“We share the Applicant's concerns that there are no invoices for this work carried out by Mr Walker, and also that there therefore appears to be no scrutiny.”
“We find this sum to be reasonable and recoverable through the service charge.”
“we are concerned that there appears to be a lack of scrutiny by the Directors of the level of legal costs being incurred, which might have been higher had they been spending their own money rather than that of the leaseholders.”
“We share the Applicant's concerns that there are no invoices for this work carried out by Mr Walker, and also that there therefore appears to be no scrutiny.”
“we are not persuaded that unanimity amongst the directors as to the hourly rate they consider appropriate to pay themselves for sundry work renders that rate reasonable. £75/per hour is, in our view, an excessively high hourly rate for a director to apparently be taking preparatory steps in litigation, particularly against a backdrop of non-itemised legal costs with a catch-all heading of 'nuisance leaseholders' and also within the context of extremely high solicitors' costs.”
“We share the concern of the Applicants about the lack of scrutiny. We note that Mr Khan confirmed that the sums invoiced by GWEML are not scrutinised by the Property Management Company. It appears that they are simply being passed on to the Leaseholders without being subject to careful consideration as to the validity of the charges contained therein.”
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.