Hicks Farm House Management Company LimitedApplicantElizabeth WalkerRespondent
Before
First-tier Tribunal Judge K Neave
Members
Mr R Thomas MRICSMs Jaycee McCabe, Director for the ApplicantVenue Remote hearing by CVPDate 19 June 2026Property: Flat 1, Hicks Farm House, Hicks Farm Way, High Wycombe, HP13 7AA Applicant : Hicks Farm House Management Company LimitedType of application: For the determination of the liability to pay service charges under section 27A of the Landlord and Tenant Act 1985
DECISION
Decisions of the tribunal(1) The tribunal determines that the sum of £937.18 is payable by the Respondent in respect of the budgeted expenditure for the 2024/25 service charge year.(2) The tribunal makes the determinations as set out under the various headings in this Decision.(3) The tribunal does not make an order under section 20C of the Landlord and Tenant Act 1985(4) The tribunal has no jurisdiction in respect of county court costs and fees. This matter should now be referred to the County Court at Reading to deal with all outstanding matters in the county court proceedings. The application[1]The parties seek a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) and Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”) as to the amount of interim service charge payable by the Respondent in the 2024 service charge year, and also as to whether an administration charge is payable by her.[2]Proceedings were originally issued in the County Court at Reading under claim number M2QZ4428 in proceedings begun by the Applicant to recover unpaid service charges. The claim was transferred to this tribunal by the order of Deputy District Judge Hutchin of 25 July 2025.[3]The sums in dispute are modest – the tribunal was provided with an account statement relating to the Respondent’s flat which shows that the following sums have been demanded:(i)2 June 2024 – advance contribution to managing agent’s fees in the sum of £119.18.(ii)1 July 2024 – interim service charge demand for the half year period 1 July 2024 – 31 December 2024 in the sum of £440.50.(iii)20 September 2024 – late payment fee of £55.97.[4]It appears that the second half of the 2024 budgeted expenditure has also been demanded, though we have not seen a copy of this service charge demand.[5]The service charge year runs from 1 July to 30 June in each year. We were provided with an amended service charge budget for 2024/25 which states that budgeted service charge expenditure for this year was £3524.00, of which the Respondent’s share was £881.00. The background[6]The background to this application is set out in the 203-page hearing bundle, together with the second page of an email from the managing agents to the lessees dated 24 June 2024, which was initially missing from the hearing bundle but which was provided on the day of the hearing. At the outset of the hearing the parties agreed that the tribunal should consider the documents referred to above, save for pages 175 and 176 of the hearing bundle which they agreed should be removed. We have considered these documents in detail.[7]Hicks Farm House is a block of four flats arranged over two storeys, located on the outskirts of High Wycombe. Neither party requested an inspection of the block and the tribunal did not consider that an inspection was necessary and nor would it have been proportionate to the issues in dispute.[8]The Applicant is a lessee-owned freehold company. It is the freehold owner of Hicks Farm House under title number BM402850 and is the Respondent’s immediate landlord.[9]Until April 2022, the Respondent was also a director of the Applicant company and was actively involved in the management of the block, including demanding service charges and apportioning service charge expenditure. There is a dispute between the parties about whether the Respondent was lawfully removed as a director of the company, however that dispute is not relevant to any of the issues that we are required to decide.[10]The Respondent occupies Flat 1 Hicks Farm House under the terms of a lease dated 10 August 2018 for a term of 125 years from 29 June 2018. The relevant provisions of her lease are set out below. The hearing[11]At the hearing, which took place by CVP, the Applicant was represented by Ms McCabe, a director of the company. Ms McCabe is also the lessee of a flat in the block. She was accompanied by Mr Headlam, another director and lessee. The Respondent was assisted in making her submissions by Mr Alex Williams-Odonkor, a lay representative.[12]We heard oral evidence from Ms McCabe, who adopted her witness statement dated 31 March 2026 and was cross-examined by Mr Williams-Odonkor. We also heard oral evidence from the Respondent who adopted her witness statements dated 3 March 2026 and 14 April 2026. She was cross-examined by Ms McCabe. Both parties made submissions about each of the items referred to in their scott schedule. We reserved our decision. The issues[13]The parties agreed at the outset of the hearing that the following issues remain in dispute and require resolution:(i) Whether the Applicant is entitled under the terms of the Respondent’s lease to apportion service charge expenditure equally between the four flats in Hicks Farm House as it did when demanding the 2024 interim expenditure.(ii) The payability and reasonableness of the disputed service charges set out in the scott schedule completed by the parties.(iii) Whether an order under section 20C of the Landlord and Tenant Act 1985 and/or paragraph 5A of schedule 11 of the 2002 Act ought to be made.[14]Having heard the evidence and submissions and having considered the documents provided, the tribunal makes determinations on the various issues as follows. The Lease[15]The following are the material terms of the Respondent’s lease:(i) “landlord’s surveyor” is defined as “a surveyor appointed by the Landlord who may be an individual or a firm or company of chartered surveyors, or an employee of the Landlord or a company which is in the same group as the Landlord”(ii) “Service Charge” is defined as “the Tenant’s Proportion of the total cost of the Landlord’s Expenses in relation to the relevant Service Charge Year...”(iii) “Service Charge Estimate” is defined as “The Tenant’s Proportion of the amount which the Landlord, the Landlord’s Surveyor or its accountant, reasonably estimates will be the total cost of the Landlord’s Expenses in any Service Charge Year”.(iv) “Tenant’s Proportion” is defined as “fair proportion”.(v) By clause 2.9 “references to a “fair proportion” of any sum are to the whole or a proportion of that sum reasonably determined by the Landlord’s Surveyor whose decision will be final and binding (except in the case of manifest error or injustice)”(vi) By clause 6, “the Tenant must pay to the Landlord...the Service Charge Estimate in advance and in equal instalments on the Rent Payment Days”(vii) The service charge provisions are set out in clause 10 of the lease. The service charge year begins on 1 January in each year.(viii) By clause 10.3.1, “the Landlord will give the Tenant a statement of the Service Charge Estimate for each Service Charge Year...” The tribunal’s decision and reasons Apportionment[16]The Respondent’s case, as it is set out in her statement of case and witness statements, and as she developed it further in her oral submissions and those of Mr Williams-Odonkor, is that the service charge apportionment adopted by the Applicant (that is to say, an equal division of the charges between each of the 4 flats) is not in accordance with the lease and is “arbitrary and unsupported”. In particular, she says that the apportionment has not been determined by a surveyor, as the lease requires.[17]The Respondent accepted, and we find, that when she was a director of the Applicant company (and indeed since she purchased the flat in 2018), service charges were apportioned between the flats in the same way as they are now. All service charge expenditure was divided equally so that each flat paid a 25% share of all the costs. The Respondent said that a 25% share of expenditure seemed to her at the time to be a straightforward and sensible way to apportion the charges. As she said in her witness statement, this was a practical way of dividing the costs. All the leaseholders, including the Respondent, agreed about this method of apportionment. It was not until 2024 that the Respondent took a different view (though she did not raise her concerns with the Applicant until the parties were engaged in this litigation).[18]The Respondent said, and we find, that she changed her mind about the apportionment because her ideas about how the building was to be managed had been rejected by the other leaseholders. Further, Ms McCabe and Mr Headlam had begun to sublet their flats and the Respondent was concerned about the extra costs involved with managing a block occupied otherwise than by owner-occupiers, who might be less concerned about keeping the common areas tidy and well-maintained. Additionally, the newly appointed managing agents had pointed out in an email to leaseholders dated 24 June 2024 that the leases did not contain a fixed service charge percentage. The Respondent said in her oral submissions that she would accept a 25% apportionment of the charges if this were determined by a surveyor, but she pointed out that there were other ways of apportioning the charges, such as by reference to floor area and/or by the use of schedules based on use and benefit.[19]The 2024 service charge budget was set by 2 Rivers Property Management Limited, the (then) newly appointed managing agent for the block. The property manager was Catherine Kersey. We accept, as Ms McCabe said in her evidence, that Ms Kersey is an experienced property manager with particular expertise in managing small blocks of flats. The budget itself states that it was “certified by 2 Rivers Property Management Ltd” on 10 July 2024. Ms Kersey said in her email of 24 June 2024 referred to above that a 25% apportionment was “obvious” and she confirmed to the leaseholders that this was the apportionment that she would be adopting.[20]We do not agree with the Respondent that the service charges have not been apportioned in accordance with the terms of the lease. The surveying profession is not a regulated one. Though chartered surveyors must hold membership of the RICS, the lease does not require the apportionment of service charge expenditure to be carried out by a chartered surveyor. It requires the landlord’s surveyor to determine the apportionment. The landlord’s surveyor could be a chartered surveyor, but it could also be an individual. There is no requirement for the surveyor to hold any particular qualifications. It was in our judgment sufficient and in compliance with the terms of the lease for the qualified and experienced property manager to determine the apportionment and to certify the service charge budget which specified the proportion of the service charge costs that the Respondent was required to pay, as in fact has taken place in this case.[21]If we are wrong about that, we accept and find, as the Applicant says at paragraphs 4 and 5 of its statement of case, that the Respondent’s previous agreement and conduct set out above relating to apportionment and the long-standing practice between 2018 and 2024 of apportioning the charges equally means that she is to be taken to have accepted that the service charge expenditure should be divided equally between the leaseholders, even in the absence of a determination by a surveyor. The Respondent was clearly aware that this was how the service charges were historically being apportioned. Indeed, this was her own practice when she was a director of the Applicant. The practice was long-standing. She did not object to this methodology before the 2024 budget was set and indeed had agreed to it in the past. In our judgment, both the Applicant and the Respondent shared a common assumption that the equal division of service charges was correct, notwithstanding that there had been no determination of this by a surveyor. The Respondent is in our judgment estopped from asserting now that there must be a surveyor’s determination before the interim 2024 service charge demands are payable by her.[22]There is in our judgment nothing irrational or indeed unreasonable about the decision to apportion service charge expenditure equally in this case. The block is a small block. An apportionment based on use and schedules would in our judgment be unnecessarily complex and disproportionate to the modest sums involved. There are external areas which require maintenance and from which all the lessees derive benefit. This would lean against an apportionment based on floor area.[23]For these reasons, we find that the Respondent is liable to pay 25% of the budgeted service charge expenditure for the 2024/25 service charge year. The relevant costs[24]We next consider the disputed service charge expenditure identified by the parties in their completed scott schedule. We refer below to each item identified in the schedule.[25]The Respondent is particularly concerned that she has not been provided with what she refers in her witness statement to as “full communications relating to budgeting, apportionment or expenditure decisions”. However, the Respondent is no longer a director of the Applicant company. As lessee, she will not necessarily be party to all of the Applicant’s decision-making processes and nor will she be consulted on every decision that the Applicant makes – the 1985 Act provides for lessees to be consulted on decisions to carry out major works or to enter long-term agreements, but not about the day-to-day management of the block. Items 1, 3 and 15 - managing agent fees[26]The Respondent does not dispute that the Applicant is entitled to appoint a managing agent under the terms of the leases. She does not assert that the Applicant is overpaying for the agent’s fees. She says that she has not been provided with a copy of the agent’s retainer and that she was not consulted about the decision to appoint an agent.[27]However, on 19 April 2024 the Respondent was invited to a meeting to discuss appointing the agent, but she did not attend. In any event, there was no requirement for the Applicant to consult the Respondent about the appointment – there is no suggestion that the agency agreement is a qualifying long-term agreement. We find, having considered the email between Ms Kersey and the Respondent dated 21 August 2024, that the Respondent was sent the terms upon which the agent is engaged by email on that date.[28]We find that the budgeted provision for the managing agent’s fee for the 2024/25 service charge year, the Respondent’s share of which was £388.36, is payable under the terms of the lease and is reasonable in amount. Items 2 and 5 – inconsistent budgeting[29]The Respondent raised as items 2 and 5 in the schedule what she says is an inconsistency in the sums sought from her, as the Applicant initially budgeted £1,208.36 for the 2024 service charge expenditure but then later reduced this sum to £880.00. Ms McCabe explained that the Applicant had amended the initial budget prepared by the managing agent in order to reduce the sums sought on account to better reflect what the directors felt would be spent in 2024. The Respondent accepts this explanation and therefore this challenge falls away. Items 4 and 6 – late payment fees[30]The Applicant confirmed that it does not now seek any late payment fees from the Respondent. Accordingly, we find that items 4 and 6 are not payable by her. Items 7 and 8 - general repairs / maintenance[31]The Applicant budgeted £500 for general repair and maintenance works in the amended service charge budget for the 2024/25 service charge year, the Respondent’s share of which is £125.00. The Respondent’s case is that no schedule of repairs has been provided and she has not been informed of the nature of the works proposed to be carried out or which were in fact carried out. She says that the exterior lighting at the property has been changed and this work should not have taken place unless there was a fault with the lights.[32]We remind ourselves that we are concerned with the reasonableness of the budgeted figures for general repairs. Though the parties do not agree about the nature and extent of the electrical and lighting work carried out in 2024, and the need for this work, we do not need to resolve this dispute because it is not relevant to the question of whether the budget set aside for general maintenance was reasonable. Ms McCabe told us that the managing agents had initially proposed a larger budget for this item, but that the Applicant had reviewed the budget and reduced it to £500.[33]We find that £500 is a reasonable sum to budget for all works of general maintenance that may be required in a block that was in 2024 six years old and would likely have required some maintenance throughout the service charge year. The Respondent is liable to pay her share of the budgeted costs in respect of items 7 and 8 on the schedule. Her share is £125.00. Item 9 – electrical maintenance[34]This cost does not appear in the amended 2024/25 service charge budget and the Respondent is not being asked to pay for it by way of an interim service charge. The point therefore falls away. Item 10 – gutter cleaning[35]The Respondent asserts that this sum is not payable by her because she arranges for her own gutter cleaning to be carried out independently of the Applicant. Ms McCabe explained that all the guttering at the property is connected and that the Applicant arranges for all the gutters to be cleaned by one contractor in the course of one visit to the block. A sum of money was set aside for these costs in 2024, but it may be that this is not an annual expense as the gutters may not need to be cleaned every year.[36]The lease provides that the Applicant is responsible for maintaining the common parts. In our judgment, the cleaning of the external guttering is part of its discharge of this obligation. Accordingly, the landlord is entitled to recover as a service charge from the Respondent the budgeted cost of this work. It matters not when considering the reasonableness of the provision in the budget for these costs that the Respondent has arranged for her own cleaning of the guttering – we accept Ms McCabe’s straightforward and unchallenged evidence that she did not know about this and in any event the Applicant is required to discharge its own maintenance obligations notwithstanding the steps that the Respondent might take in respect of the guttering. There is no suggestion that the budget set for this work is excessive. We find that it is reasonable.[37]We accordingly find that the Respondent is liable to pay her share of the costs in respect of item 10 on the schedule. Her share is £62.50. Item 11 – window cleaning[38]This cost does not appear in the amended 2024/25 service charge budget and the Respondent is not being asked to pay for this work by way of an interim service charge. The challenge therefore falls away. Item 12 – communal electricity[39]There is no dispute that electricity charges are recoverable as a service charge under the terms of the lease. The Respondent asserted during the hearing that she has made payment for the electricity invoices directly to the supplier rather than paying the service charges demanded. It is unclear why the Respondent has done this – the electricity bills are in the Applicant’s name and it is the Applicant’s responsibility to pay them. In any event, these actions are not relevant to the sums budgeted by the Applicant for communal electricity charges in the 2024/25 service charge year. It may be relevant to the actual service charge expenditure for this year depending on when the payments were made and how they have been applied to the electricity account by the supplier, however we are not concerned with that issue and received no evidence relating to it.[40]We do not agree that there is excessive external lighting (leading to excessive electricity consumption) as the Respondent asserts in the schedule. The photographs of the block provided to us show what is in our judgment a normal amount of lighting for a residential block.[41]We find that the Applicant’s budget for communal electricity, of £128.00, of which the Respondent’s share is £32.00, is recoverable under the lease and is reasonable. We accordingly find that the Respondent is liable to pay her share of £32.00 in respect of item 12 on the schedule. Item 13 – communal water supply[42]At the hearing, the parties agreed that the Respondent is liable to pay her share of £25.00 in respect of item 13 on the schedule. Item 14 – accountancy fees[43]The Respondent’s case, as it was set out during the hearing in her oral submissions, is that accountancy costs should be included in the agent’s management fee referred to above. She was also concerned that the accountancy costs might include provision for the accountant to work on the Applicant’s corporate accounts.[44]Ms McCabe confirmed that the budgeted figure of £420 is for service charge accounts only, not for confirmation statements or any other matter relating to the Applicant’s requirements to file accounts and documents at Companies House. The Applicant is entitled to recover these costs as a service charge by clause 10.1 of the lease, which includes within the list of service charge expenses the cost of preparing the service charge certificate at the end of the service charge year. There was no evidence that other managing agents could provide these accountancy services as part of a lower overall management fee than the Applicant has budgeted for management and accountancy services separately. It is not unusual for managing agents to instruct accountants to prepare final service charge accounts and certificates. The lease envisages that these accounts will be produced by an accountant.[45]We are satisfied that it was reasonable to make separate provision for these costs and that the sums budgeted are reasonable. We accordingly find that the Respondent is liable to pay her share of these costs in respect of item 14 on the schedule. Her share is £105.00. Items 16 and 17 – Office costs and online portal[46]These costs relate to the managing agent’s fee for the Applicant’s use of the agent’s address as a correspondence address and also for the Applicant’s use of a software licence for the management and reconciliation of the service charge expenditure.[47]The Respondent’s case is that these costs should be included as part of the management fee, or that she could do this work herself for no charge. However, there was no evidence that other managing agents could provide these services as part of a lower overall management fee than the Applicant has budgeted for the services separately. It would not be appropriate for the Respondent to do this work herself as she is not a director of the Applicant. The other directors cannot in our judgment be criticised for not wishing to do this work without experience or renumeration.[48]We are satisfied with the explanation provided by the Applicant and find that it was reasonable to make separate provision for these costs and that the sums budgeted are reasonable. We accordingly find that the Respondent is liable to pay her share of the costs in respect of items 16 and 17 on the schedule. Her share is £96.00. Item 18 – buildings insurance[49]By the time of the hearing, the Respondent’s case on insurance was simply that the budget for insurance was higher than she would expect. There was no comparable evidence to show that insurance could be obtained at a more reasonable cost elsewhere. On the face of it, the Applicant’s budgeted provision for insurance costs is not obviously excessive. We find that the Respondent is liable to pay her share of the costs in respect of item 18 on the schedule. Her share is £145.00. Item 19 – Directors & Officers Insurance[50]Ms McCabe agreed with the Respondent that this was a company expense and not service charge expenditure. The Applicant does not seek a contribution from the Respondent towards this cost as she is not a director of the Applicant. The Respondent is not required to contribute to these costs. Item 20 – fire risk assessment[51]There is no dispute that the cost of this work is recoverable under the terms of the lease. Nor is there any suggestion that the cost of obtaining the fire risk assessment is excessive. The Respondent disputes liability to pay for the cost of obtaining the fire risk assessment because she has not seen a copy of the report. This is not in our judgment a valid basis to dispute liability to pay a relevant cost that is both contractually recoverable and reasonable in amount, as we find that it is. We accordingly find that the Respondent is liable to pay her share of the costs in respect of item 18 on the schedule. Her share is £77.50.[52]However, the Regulatory Reform (Fire Safety) Order 2005 requires the responsible person for the building to supply tenants with the current fire risk assessment when they ask for it. The Tribunal expects the Applicant to comply with its important safety obligations in this respect. If it does not do so, the local fire and rescue authority may take further action. Conclusions as to payability[53]It follows that the total sum payable by the Respondent in respect of the interim service charges for 2024 is £937.18 calculated as follows:(i) The Respondent’s share of the amended 2024/25 budgeted expenditure, less directors’ and officers’ insurance (£818.00).(ii) The managing agent’s set up fees referred to in item 1 of the Respondent’s schedule of £119.18 Application under s.20C[54]At the end of the hearing, Mr Williams-Odonkor sought an order under section 20C of the 1985 Act. Having heard the submissions from both parties and taking into account the determinations above, the tribunal does not consider that it would be just and equitable in the circumstances for an order to be made under section 20C of the 1985 Act. The Applicant has been substantially the successful party and the majority of the budgeted service charge expenditure has been held to be both recoverable under the lease and reasonable in amount. As to the amounts found not to be payable, this was in general the result of the Applicant’s reasonable concessions. It would not in those circumstances be equitable for the Applicant to be prevented from recovering its costs of these proceedings as a service charge, if it chooses to do so.[55]It is unclear to the tribunal whether the Respondent is likely to face any administration charges and so the tribunal does not at this stage make any order under paragraph 5A of Schedule 11 to the 2002 Act. The next steps[56]This matter should now be returned to the County Court to deal with any outstanding matters between the parties. Name: Judge K Neave Date: 19 June 2026 Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).