Flat C, 25 The Broadway, Mill Hill, London, NW7 3DA: LON/00AC/LSC/2019/0083 LON/00AC/LSC/2019/0083

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case No LON/00AC/LSC/2019/0083

Between

Management Company LimitedApplicant

Fariba NadimiRespondent

Before

Judge I Mohabir Date: 3 June 2019

Mr Wragg of Counsel for the Applicant

In person For the determination of the reasonableness of and the liability for the Respondent

Venue 10 Alfred Place, London WC1E 7LR

Date 3 June 2019

Property: NW7 3DA 25 ABC The Broadway Residents

Type of application: to pay service and administration charges Tribunal Judge I Mohabir

DECISION

[21]The hearing in this case took place on 29 May 2019. The Applicant was represented by Mr Wragg of Counsel. The Respondent appeared in person and was accompanied by Mr Khani. The Tribunal dealt with the evidence by way of submissions. Service Charges Demand not Valid

[22]Having carefully considered the lease, the Tribunal was satisfied that both the estimated service charge costs and the reserve fund contribution fell within the definition of the “Annual Maintenance Provision” in clause 2 in the Fifth Schedule. The Tribunal found that the estimated cost of the major works was recoverable service charge expenditure under clause 12 in the Sixth Schedule. The Tribunal also found that the Respondent was obliged to pay the sum demanded pursuant to clauses 2 and 3 in the Seventh Schedule of the lease.

[23]As to the accuracy of the demand, the Tribunal found that even though it was agreed that the recarpeting would not proceed, this did not render it inaccurate or unreasonable. The estimated service charge demand is a demand for a global sum and should not be viewed as being apportioned for various items of work. That is simply done as a matter of convenience by way of explanation. It may have been the case that the final cost of the proposed work exceeded the original estimate as a result of unforeseen work

[24]The Tribunal was satisfied that the email from ABC to the Respondent dated 11 April 2018 offering to provide “fresh copies of the demand” was not an agreement to amend the demand, but simply an offer to provide duplicate copies. The Tribunal is supported in this view by the subsequent email from ABC dated 11 June 2018 confirming that the demand remained payable and in the event that there was a surplus at the end of the year, a repayment would be made to the lessees.

[25]Accordingly, the Tribunal found that the demand is contractually payable and the service charges claimed are reasonable. Section 20 Consultation

[26]The Respondent’s case appears to be that the Applicant should have proceeded with an earlier estimate from JJR Maintenance dated 15 June 2016 in the sum of £1,350 to carry out the internal redecorations.

[27]As a matter of law, this submission fails because the estimate from JJR Maintenance did not form one of the estimates on which the Notice of Estimates dated 15 December 2016 was based. Therefore, the section 20 notice cannot be said to be invalid by reason of this omission.

[28]The Respondent advanced no other case as to why the section 20 consultation process carried out by the ABC was defective.

[29]Accordingly, the Tribunal found that the section 20 consultation process was valid. Administration Charges - Costs

[30]The Tribunal was satisfied that the Applicant’s costs (as administration charges) of pursuing payment of the service charge demand in the sum of £340 are recoverable under clause 2(b) in the Fourth Schedule of the lease on an indemnity basis. They fall within the definition of the “costs and expenses incurred by in enforcing payment by the Tenant of…other monies payable by the Tenant”.

[31]For the avoidance of doubt, the Tribunal found the costs to be reasonably incurred because of the Respondent’s non payment whose stance about withholding payment the Tribunal has concluded was incorrect. The Tribunal also found the costs to be reasonable.

[32]This case is now remitted back to the County court to determine any other outstanding matters. Name: Tribunal Judge I Mohabir Date: 3 June 2019 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). 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, (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. Commonhold and Leasehold Reform Act 2002 Schedule 11, paragraph 1 (1) In this Part of this Schedule “administration charge” means an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable, directly or indirectly— (a) for or in connection with the grant of approvals under his lease, or applications for such approvals, (b) for or in connection with the provision of information or documents by or on behalf of the landlord or a person who is party to his lease otherwise than as landlord or tenant, (c) in respect of a failure by the tenant to make a payment by the due date to the landlord or a person who is party to his lease otherwise than as landlord or tenant, or (d) in connection with a breach (or alleged breach) of a covenant or condition in his lease. (2) But an amount payable by the tenant of a dwelling the rent of which is registered under Part 4 of the Rent Act 1977 (c. 42) is not an administration charge, unless the amount registered is entered as a variable amount in pursuance of section 71(4) of that Act. (3) In this Part of this Schedule “variable administration charge” means an administration charge payable by a tenant which is neither— (a) specified in his lease, nor (b) calculated in accordance with a formula specified in his lease. (4) An order amending sub-paragraph (1) may be made by the appropriate national authority. Schedule 11, paragraph 2 A variable administration charge is payable only to the extent that the amount of the charge is reasonable. Schedule 11, paragraph 5 (1) An application may be made to the appropriate tribunal for a determination whether an administration 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, (d) the date at or by which it is payable, and (e) the manner in which it is payable. (2) Sub-paragraph (1) applies whether or not any payment has been made. (3) The jurisdiction conferred on the appropriate tribunal in respect of any matter by virtue of sub-paragraph (1) is in addition to any jurisdiction of a court in respect of the matter. (4) No application under sub-paragraph (1) 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.

(6) An agreement by the tenant of a dwelling (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination— (a) in a particular manner, or (b) on particular evidence, of any question which may be the subject matter of an application under sub-paragraph (1).