Tribunal Judge DuttonMr O N Miller BScMr Derek Kerr – Counsel instructed by Duncan Lewis Solicitors and Ms Smita Patel Estate Administrator for the Applicant for the ApplicantDate 20 January 2020
DECISION
2 Decisions of the tribunal(1) The tribunal determines that the sum of £1,646 is payable by the Respondent in respect of the service charge for the year 2016.(2) The tribunal determines that the sum of £2,295 is payable by the Respondent in respect of the service charge for the year 2017.(3) The counterclaim made by the respondent was without detail and it does not appear that any court fee was paid. If the respondent wishes to pursue this element, he will need to apply to the County Court. Since the tribunal has no jurisdiction, in this application, over county court costs and fees and this matter is now be referred back to the County Court at Watford in claim number E8QZ18X2. The application[1]The Applicant seeks a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) against the Respondent in respect of the service charge years 2016 and 2017 .[2]Proceedings were originally issued in the County Court at Watford under claim no. E8QZ18X2. The claim was transferred to this tribunal, by order of Deputy District Judge Duncan 4th January 2019.[3]The relevant legal provisions are set out in the Appendix to this decision. The hearing[4]At the hearing the Applicant was represented by Mr Derek Kerr, Counsel and Ms Patel and the Respondent appeared in person accompanied by his father The background[5]The property, which is the subject of this application is a flat on the top floor of a 5 storey purpose built property with a covered car park at basement level. There are two conjoined buildings, Lucinda Court and Verdana Court.[6]The tribunal inspected the property before the hearing in the company of Mr Kerr, Ms Patel and Mr Dhuruva and his father. We had the opportunity of inspecting the car park area, which sits in the basement level under both buildings. It appeared that each flat in the two buildings has a designated car parking space. Entrance was controlled by an electric shutter, with a door to the side. At this level were two lifts, now working. 3[7]Inspection of the common parts showed them to be in good decorative order and relatively clean, although the cleaning rota did not appear to be completed. It was drawn to our attention that the lifts had been out of action for some time but were now working, although according to Mr Dhruva senior one lift was noisy and not fluent in its operation. The entrance mat to the block was in poor condition. There was evidence of some water ingress at the top floor adjacent to the roof lights.[8]Externally the grounds, which were limited, appeared to be in neat order and a fence to the rear of the property had recently been replaced.[9]The Respondent holds a long lease of the property which requires the landlord to provide services and the tenant to contribute towards their costs by way of a variable service charge. The specific provisions of the lease are not in dispute. The issues[10]At the start of the hearing the parties identified the relevant issues for determination as follows:(i) The payability and/or reasonableness of service charges for the years 2016 and 2017. The applicants sought to recover later years but the claim transferred to us by the Court relates to 2016 and 2017 only. The respondent had accepted that the service charges demanded for 2019 were due and owing and had paid them and had settled outstanding ground rent and insurance contributions.(ii) The claim in the country court included a counterclaim said to relate to the lost rental income that the respondent said he could have achieved had the lifts been working. It seems that the lifts had been out of action for a number of years and were only working properly from 2019. The counterclaim had no particulars other than a reference to the lost rental income and was not quantified in any way. It was not a matter we could deal with so will be remitted back to the Court for the respondent to decide whether he wishes to pursue same.[11]Having heard evidence and submissions from the parties and considered all of the documents provided, the tribunal has made determinations on the various issues as follows. Service charge year 2016 and 2017[12]The difficulty we faced in determining the application was the failure of the respondent to comply with the directions issued by the tribunal on 27th June 2019. These required the respondent to complete a schedule of 4 items in dispute setting out the reasons for such challenge and providing alternative costings. He failed to do so for either year in dispute.[13]His evidence was limited to a witness statement, unsigned, purported to be dated 21st December 2019. This statement told us the respondent had purchased the flat in 2014 knowing that the lift serving his block was not working. This had caused him difficulties in furnishing the flat and after some time in occupation he vacated and attempted to sell/rent the flat. He made various allegations against the Applicant which we noted. The statement went on to indicate an attempt to meet with the applicant to resolve the issues but to no avail. It should be noted however, that amongst the papers provided to us before the hearing are two emails of relevance. The first is dated 22nd November 2017 and follows from a meeting the respondent had with Mr Bharj, the applicant’s accountant, when it is suggesting that the respondent confirmed he would be making payments to clear the outstanding amounts. This was followed by an email from the respondent dated 4th January 2018 indicating that he would settle the sums due from the sale proceeds of the flat.[14]In fact that sale did not take place and the respondent explained that the offer to pay was dependant on the sale proceeding and had been agreed with the buyer.[15]The statement went on to deal with the medical issues affecting him, with which we have much sympathy. He told us that he had eventually been able to rent his flat to the Council, after having been empty for 18 months or so, but at a much reduced rent. In his summary he says this “In a nutshell the Freeholder has a complete disregard for the law, rules and regulation and Health & Safety of the occupants in the building. Tenants and leaseholders are fearful of the freeholder’s legal and financial might and retaliatory action. I have lost nearly 18 months void period rent and had a profound impact on my health and wellbeing.”[16]For the applicant we had three witness statements from Ms Patel, copies of the accounts for 2016 and 2017 and a skeleton argument prepared by Mr Kerr. In the skeleton an application was floated under rule 8(2(e) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013 as a result of the failure by the respondent to comply with the directions.[17]The skeleton did go on to respond to the concerns relating to the lifts. It was said that the management company Grover Management Limited was without funds to attend to the problems with the lifts. When the company took over management of the building, it seems in June 2016 investigations had to be undertaken into flooding issues which effected the lift pits. These investigations and repairs having been undertaken the pits had to be allowed to dry and in 2018 s20 consultation took place leading to the repair of the lifts in January 2019. 5[18]We did undertake a review, as best we could, of the some of the heads of expenditure for the two years. We had been told by the respondent that when Grover took over the service charges doubled but that he was now happy with the state of affairs at the building, hence his payment of the 2019 charges. No contribution had been made to earlier years although the ground rent and insurance charges had, we were told, been met.[19]We discussed the management charges, water and sewerage costs, cleaning. The management fee is £259 per unit. The costs associated with the water were the charges for investigating the flooding issues in the car park, which seemed to stem from leaking pipes allegedly caused by misuse of the drains by occupiers. The cleaners may be changed and it was accepted that the cleaning attendance sheets were not being completed by the present cleaners. However, Grover can review the cleaning by use of CCTV, which perhaps somewhat surprisingly was partially installed before the lifts were repaired.[20]Ms Patel told us that Verdana Court was occupied by tenants of Hightown Housing, who were the leaseholders and there were now no arrears of service charge for that block. Of Lucinda Court, which appears to house 26 flats we were told that only 3 were in arrears, including the respondent and that Grover had set up a reserve fund from 2019. The tribunal’s decision[21]In the absence of any meaningful challenge to the service charges for these two years we find that they due and owing in the sums claimed. It appears that the respondent has not lived at the block since 2016, when the service charges were withheld. We noted his complaint concerning the lack of lift and the impact this had on his ability to let the flat. He produced no evidence of this to us and we cannot make any finding on any set off or counterclaim.[22]As we indicated above, we did undertake a partial review of some of the heads of service charges in the hope that it might provide some assistance to the respondent. At first glance questions might be raised about some of the costs. However, it is not for us to make the respondent’s case for him. He raised no specific issues, other than the lift and accordingly the applicant was not in a position to respond to any matters at the hearing, as it did not know what was disputed.[23]In those circumstances we find that the service charges for 2016 and 2017 are due and owing and should be paid within the next 28 days. No application under s20C of the Act was made by the respondent and indeed had it been in the circumstances it would have been rejected.[24]It will be the court to decide any application for costs and for the respondent to decide whether he wishes to proceed with his 6 counterclaim. These matters will be remitted back to the County Court at Watford. Name: Tribunal Judge Dutton Date: 20th January 2020 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 Firsttier 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). 7 Appendix of relevant legislation Landlord and Tenant Act 1985 (as amended) Section 18(1) In the following provisions of this Act "service charge" means an amount payable by a tenant of a dwelling as part of or in addition to the rent - (a) which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord's costs of management, and (b) the whole or part of which varies or may vary according to the relevant costs.(2) The relevant costs are the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable.(3) For this purpose - (a) "costs" includes overheads, and (b) costs are relevant costs in relation to a service charge whether they are incurred, or to be incurred, in the period for which the service charge is payable or in an earlier or later period. Section 19 (1) Relevant costs shall be taken into account in determining the amount of a service charge payable for a period - (a) only to the extent that they are reasonably incurred, and (b) where they are incurred on the provisions of services or the carrying out of works, only if the services or works are of a reasonable standard; and the amount payable shall be limited accordingly. (2) Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise. Section 27A (1) An application may be made to the appropriate tribunal for a determination whether a service charge is payable and, if it is, as to - (a) the person by whom it is payable, (b) the person to whom it is payable, (c) the amount which is payable, 8 (d) the date at or by which it is payable, and (e) the manner in which it is payable. (2) Subsection (1) applies whether or not any payment has been made. (3) An application may also be made to the appropriate tribunal for a determination whether, if costs were incurred for services, repairs, maintenance, improvements, insurance or management of any specified description, a service charge would be payable for the costs and, if it would, as to - (a) the person by whom it would be payable, (b) the person to whom it would be payable, (c) the amount which would be payable, (d) the date at or by which it would be payable, and (e) the manner in which it would be payable.(4) No application under subsection (1) or (3) may be made in respect of a matter which - (a) has been agreed or admitted by the tenant, (b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which the tenant is a party, (c) has been the subject of determination by a court, or (d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.(5) But the tenant is not to be taken to have agreed or admitted any matter by reason only of having made any payment.