Russell Stewart Lacy v Homeselect Finance (No.3) Limited
[2023] UKUT 231 (LC)
Mark Saunders v Shenfield Limited
21 August 2023
[2023] UKUT 208 (LC)
Upper Tribunal
A landlord and tenant disagreed about service charges. The court said the process was unfair because the tenant didn't get all the important documents in time to properly challenge some of the charges. The tenant won on some points (cleaning and security), but lost on the biggest issue (refurbishment) because they should have raised their concerns sooner.
Key Facts
- •Appeal against a First-tier Tribunal (Property Chamber) (FTT) decision on service charges for 2020 and 2021.
- •Four disputed items: security equipment (£4,753.30), cleaning (£11,728.43), and common parts refurbishment (£271,189.14 and £53,348.20).
- •FTT's standard directions required leaseholder to identify issues before disclosure of documents.
- •Appellant argued that this procedure prevented a fair hearing.
- •Appellant, a property maintenance company owner, was not selected for the refurbishment contract and had prior knowledge of the works.
- •Cleaning contract was a key point of contention.
- •Appellant requested further disclosure, including the cleaning contract, shortly before the deadline for responding to the landlord's case.
Legal Principles
Appeals from case management decisions are only allowed where the tribunal failed to account for a relevant factor, considered an irrelevant factor, or reached a plainly wrong decision.
English Rose Estates Ltd v Menon [2022] UKUT 347 (LC)
Section 20ZA(2), Landlord and Tenant Act 1985 defines a "qualifying long term agreement" as one for more than 12 months.
Landlord and Tenant Act 1985
An agreement is terminable at the end of the initial period if it's for an initial term and then continues year to year, subject to termination rights; therefore, not a qualifying long-term agreement.
Paddington Walk Management Limited v Peabody Trust [2010] L&TR 6
A contract running from a specific date generally excludes that date when calculating the contract period.
FTT procedural rules require cases to be dealt with fairly and justly, avoiding unnecessary formality and seeking flexibility.
FTT procedural rules
Outcomes
Appeal allowed in part.
FTT's refusal to consider arguments based on the cleaning contract, which was only provided shortly before the hearing, was unfair.
Cleaning charge of £11,728.43 upheld, but procedural issue regarding the lack of consultation due to the contract not being a qualifying long-term agreement means it should have been considered.
The cleaning contract was not a qualifying long-term agreement under section 20ZA(2), Landlord and Tenant Act 1985, because it was terminable at the end of the initial 12-month period.
Security equipment charge reduced by £688.30 (£4,065 remaining).
FTT failed to address the issue of whether some invoices related to work on individual leaseholders' windows and not the service charge.
Appeal dismissed regarding common parts refurbishment works.
Appellant had sufficient information beforehand to raise challenges to the work and costs but chose not to do so until late in the process.