Flats A, B, C and D, 84 Railton Road, London SE24 0LD LON/00AY/LSC/2023/0474

FIRST-TIER TRIBUNAL
PROPERTY CHAMBER (RESIDENTIAL PROPERTY)
Case No LON/00AY/LSC/2023/0474
Between
Armando Shehu (leaseholder of Flat A), Jake Muncey (leaseholder of Flat B), Adam Leake (leaseholder of Flat C) and Tom Killian (leaseholder of Flat D)ApplicantAssethold LimitedRespondent
Before
Judge P KornMr O Dowty MRICSSebastian Reid of Counsel for the ApplicantDate 30 August 2024Hearing 2024-08-12Property: Road, London SE24 0LD Armando Shehu (leaseholder of Flat A), Jake Muncey (leaseholderType of application: pursuant to Section 27A of the Landlord and Tenant Act 1985

DECISION

Description of hearing The hearing was a face-to-face hearing. Decisions of the tribunal(1) The following table sets out in relation to each item of challenge in each year (a) how much the Applicants state was charged and (b) the amount that the tribunal determines is payable: SERVICE CHARGE ITEM SERVICE CHARGE YEAR AMOUNT CHARGED AMOUNT PAYABLE Building insurance 2019/20 £1,375.50 £1,100.67 Building insurance 2020/21 £1,310.00 £1,144.04 Building insurance 2021/22 £1,351.00 £1,187.41 Building insurance 2022/23 £1,593.00 + £1,080.27 £1,230.78 Building insurance 2023/24 £1,672.95 £1,274.13 Electricity 2021/22 £190.72 £137.85 Electricity 2022/23 £232.58 £193.93 Electricity 2023/24 £350.00 £250.00 Cleaning 2020/21 £974.00 £720.00 Cleaning 2021/22 £1,065.00 £720.00 Cleaning 2022/23 £918.80 £720.00 Cleaning 2023/24 £1,200.00 £720.00 Monthly testing 2022/23 £688.80 £376.99 Monthly testing 2023/24 £750.00 £414.69 Bin cleaning 2021/22 £258.00 £0 Bin cleaning 2022/23 £190.92 £0 - - - - SERVICE CHARGE ITEM SERVICE CHARGE YEAR AMOUNT CHARGED AMOUNT PAYABLE Bin cleaning 2023/24 £350.00 £0 Window cleaning 2022/23 £696.00 £425.00 Window cleaning 2023/24 £750.00 £454.00 Drains servicing 2019/20 £102.00 £102.00 Drains servicing 2020/21 £102.00 £102.00 Drains servicing 2022/23 £588.00 £588.00 Drains servicing 2023/24 £500.00 £500.00 Accountant’s fee 2019/20 £360.00 £360.00 Accountant’s fee 2020/21 £378.00 £378.00 Accountant’s fee 2021/22 £408.00 £408.00 Accountant’s fee 2022/23 £438.00 £438.00 Accountant’s fee 2023/24 £468.00 £468.00 Management fee 2019/20 £1,152.00 £576.00 Management fee 2020/21 £1,161.60 £580.80 Management fee 2021/22 £1,171.20 £585.60 Management fee 2022/23 £1,180.80 £590.40 Management fee 2023/24 £1,204.00 £602.00 Major works 2023/24 £13,452.00 £2,640.00(2) In relation to the year 2023/24, if the figure given as the amount charged is only an estimated figure then the figure specified above as the amount payable refers to the estimated amount payable.(3) The Applicants’ application for a cost order under section 20C of the Landlord and Tenant Act 1985 is granted in full. Therefore, the tribunal makes an order that none of the costs incurred, or to be incurred, by the Respondent in connection with these proceedings are to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the Applicants.(4) The Applicants’ application for a cost order under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 is also granted in full. Therefore, the tribunal also makes an order extinguishing the Applicants’ liability (if any) to pay towards the Respondent’s costs in connection with these proceedings as an administration charge. Introduction[1]The Applicants seek a service charge determination pursuant to section 27A of the Landlord and Tenant Act 1985 (“the 1985 Act”).[2]The Property constitutes four purpose-built flats. The Respondent is the freeholder of the Property, and the Applicants are the four leaseholders.[3]The Applicants challenge various service charges for the years 2019/20 to 2023/24 inclusive.[4]Whilst the Applicants have fully engaged with these proceedings, the Respondent has not filed any written submissions and was not present or represented at the hearing. The Applicants’ submissions Building insurance[5]In their statement of case the Applicants state that the insurance premiums are in issue for the service charge years 2019/20 to 2023/24 inclusive and that the insurance premiums have risen from £1,320.00 in 2019/20 to £1,672.95 in 2023/24. The Applicants add that they have obtained quotes from reputable insurers in the sum of £584.80 and £1,274.13 respectively, details of which are in the hearing bundle, and it is their position that £584.80 would be a reasonable insurance premium for a building of this type and structure.[6]At the hearing, Mr Reid for the Applicants noted that the charge for the year 2018/19 (when Mr Shehu was still the freeholder) was £1,057.30. Her acknowledged that the Applicants’ original submission that only £584.80 was payable was unsustainable and he submitted that £1,274.13, the higher of the Applicants’ two alternative quotes, would be a reasonable sum for 2023/24. In relation to the years 2019/20, 2020/21, 2021/22 and 2022/23 he proposed on behalf of the Applicants that the charge should be increased incrementally from the 2018/19 to the new proposed figure for 2023/24. Electricity[7]The Applicants state that the electricity costs for the common parts are in issue for the service charge years 2020/21 to 2023/24 inclusive. The electricity costs have increased from £81.77 in 2020/21 to £350.00 in 2023/24. It is the Applicants’ position that the Respondent could have found a cheaper electricity provider if it had shopped around for a different supplier and that these costs are outside of the market norm.[8]At the hearing, Mr Reid said that no information had been provided by the Respondent and therefore that the Applicants had been left in an impossible position in their attempts to analyse the electricity charges forensically. In the circumstances he proposed that a fair way of setting a reasonable charge would be to take the £81.77 charge for 2020/21, set an estimated charge of £250.00 for 2023/24 (rather than £350.00) and then increase the annual charge incrementally between 2020/21 and 2023/24 to set a reasonable charge for each of 2021/22 and 2022/23. Cleaning[9]The Applicants state that the cleaning costs for the common parts are in issue for the service charge years 2020/21 to 2023/24 inclusive. These costs have increased from £474.60 in 2020/21 to £1,200.00 in 2023/24. The Applicants believe that £15.00 per hour is a reasonable cost and that 2 hours every fortnight is a reasonable frequency and that this would amount to a charge of £720.00 per year.[10]At the hearing, Mr Reid said that the Applicants accepted the charge of £474.60 for 2019/20 and said that the Applicants’ felt that a charge of £600.00 would be reasonable for 2023/24. Again, he proposed increasing the annual charge incrementally between 2019/20 and 2023/24 to set a reasonable charge for each of 2020/21, 2021/22 and 2022/23. Monthly testing[11]The Applicants state that the monthly testing of emergency lighting and smoke detectors are in issue for the service charge years 2021/22 to 2023/24 inclusive. These costs are not considered reasonable as they have increased from £342.72 in 2021/22 to £750.00 in 2023/24. There is no reasonable explanation for this increase as the amount of lighting and smoke detectors being tested has remained the same. Bin cleaning[12]The Applicants state that the bin cleaning costs are in issue for the service charge years 2021/22 to 2023/24 inclusive. Bin cleaning costs have fluctuated between £190.92 and £350.00 from the lowest point to the highest point. In addition, the Applicants have not seen any evidence of bin cleaning as the bins have remained in the same condition. If the bins have been cleaned, it is the Applicants’ position that the standard of work is unsatisfactory and as a result the costs are not reasonably incurred.[13]At the hearing, Mr Reid said that the Applicants’ primary position was that as in their view no bin cleaning had taken place nothing was payable. Window cleaning[14]The Applicants state that the window cleaning costs are in issue for the service charge years 2019/20 to 2023/2024 inclusive. These costs are not considered reasonable as they have increased from £396.00 in 2019/20 to £750.00 in 2023/24. The Applicants have obtained alternative quotes of £440.00 and £468.30 respectively.[15]At the hearing, Mr Reid said that the Applicants accepted the charge of £396.00 for 2019/20 and noted that nothing had been charged in 2020/21 or 2021/22. The Applicants proposed a charge of £454.00 for 2023/24, this being the midway point between the quotes obtained by them. As for 2022/23, they proposed a figure that was halfway between £396.00 and £454.00, namely £425.00. Drains servicing[16]The Applicants state that the drains servicing costs are in issue for the service charge years 2019/20 to 2023/2024 inclusive. These costs are not considered reasonable as they have increased from £102.00 in 2019/20 to £500.00 in 2023/24. There is in their submission no good reason for this increase as the number of drains to be serviced has remained the same. There is an alternative quote in the hearing bundle.[17]At the hearing, Mr Reid said that the Applicants’ primary position was that the work was not actually necessary and therefore that nothing was payable. In the alternative they submitted that the charge was too high for the work done. Accountant’s fees[18]The Applicants state that the accountant’s fees are in issue for the service charge years 2019/20 to 2023/2024 inclusive. These costs are not considered reasonable as they have increased from £360.00 in 2019/20 to £468.00 in 2023/24. Further or alternatively, the former freeholder of the building only incurred accountant’s fees of £100.00, thereby demonstrating that it was not necessary to spend as much as £468.00.[19]At the hearing, Mr Reid conceded that the Applicants did not have an alternative quote but nevertheless they felt that the charge was too high. Management fee[20]The Applicants state that the management fees are in issue for the service charge years 2019/20 to 2023/24 inclusive. First of all, they observe that there is a very close relationship between the managing agent and the Respondent. Secondly, in their submission the managing agent has not been competent in managing the building as costs have dramatically increased for no good reason.[21]Thirdly, it is the Applicants’ position that the managing agent is not providing a good service. An example of poor management is that in 2023 the managing agent instructed an unscrupulous scaffolding company to erect scaffolding. The local authority contacted the Applicants to inform them that the scaffolding company had not registered a licence and that there was no public liability safety notice. The local authority added that this posed a health and safety risk to the public.[22]At the hearing, Mr Reid proposed on the Applicants’ behalf that the management fee be reduced by 50% to reflect the poor quality of service. Major works[23]In their original statement of case, the Applicants state that the Respondent has failed to comply with the requirements of section 20 of the 1985 Act in relation to certain major works. The Respondent served a section 20 notice of intention to carry out major works on 29 March 2023, to which the Applicants did not respond. The Respondent then served a notice of estimates on 6 June 2023. The notice of estimates proposed two estimates from what the Applicants characterise as obscure traders, ‘Entremark’ and ‘Superior’. Entremark provided a quote of £11,640 inclusive of VAT for the works and Superior provided a quote of £11,400 inclusive of VAT. There is a company registered at Companies House under the name ‘Entremark M Ltd’ but it was dissolved in April 2022. The entity ‘Superior’ is far too vague to locate online.[24]In their statement of case the Applicants argue that the notice of estimates was invalid as the entities who provided estimates could not be properly located. Notwithstanding this point, the Applicants responded to the notice of estimates by an email dated 8 June 2023 from Adam Cleake. That email contained an alternative quote from L.K. Carpenter & Builder Ltd in the much lower sum of £2,640. As the email provided details of a cheaper tender for the major works than the Respondent had procured, the Respondent was obliged to serve a notice of award of contract, specifying the reasons for awarding the contract and summarising the observations received during the consultation period and the responses to them, but none of the Applicants received a notice of award. Consequently, the Applicants argue in their statement of case that the Respondent was in breach of the statutory consultation requirements and therefore the Applicants’ liability for these works should be limited to £250.00 each.[25]At the hearing, Mr Reid for the Applicants said that if the tribunal was not with the Applicants in relation to the consultation issue then in the alternative the Applicants considered the charge for the works unreasonably high and also that the works themselves were inadequate.[26]Mr Reid then went on to summarise the Applicants’ position more generally. He said that the work just consisted of two people painting the outside window frames for two days and that the work was unnecessary in the Applicants’ view. As regards the consultation process, Mr Reid initially reiterated the Applicants’ position as regards the Respondent’s alleged failure to comply with the consultation process, but then during the course of the hearing a factual point regarding the notice of intention was clarified. As a result, Mr Reid said that the Applicants were now only challenging the consultation on the basis that – in their submission – the Respondent failed to follow up on the Applicants’ proposed contractor.[27]Mr Reid concluded by saying that if the tribunal were to find that some work of value had been done and also that the Respondent had not fallen foul of the statutory consultation requirements then the Applicants felt that a reasonable charge would be £1,620.00. Witness evidence The hearing bundle contains witness statements from three of the leaseholders. Commenting on these in turn: Mr Muncey’s evidence[28]His witness evidence focuses on his research into difficulties allegedly experienced by tenants of other properties owned by the Respondent.[29]At the hearing Mr Muncey was asked why he considered the Applicants’ alternative quotations on insurance to be properly comparable to the insurance taken out by the Respondent. He was unable to answer this question directly save to say that the Respondent had been asked for the information needed to source ‘like-for-like’ quotations but had failed to do so.[30]Regarding the electricity usage, he said that the lights were on a timer and there were very few of them. Regarding the extent of the area needing to be clean, he said that there was a very small hallway and stairwell and no lift. Regarding the bins, he had never seen them being cleaned.[31]In relation to the management, he said that the Applicants could never get hold of Eagerstates on the telephone and they made it difficult to access information. He also felt that their performance in relation to the need for a scaffolding licence and the section 20 consultation issues was poor. Mr Killian’s evidence[32]In his witness statement he describes the quality of cleaning as poor. He states that the communal area is not a particularly large area to clean, and considering the apparent regularity with which it is attended to it is not particularly clean.[33]Regarding the quote of £11,400 for the major works, he states that the Applicants found various much cheaper quotes but that Eagerstates went ahead with the works regardless. As regards what work was done, Mr Killian only observed 2-3 days of actual work, during which the contractor only did basic painting of the windows and cleaning up. The contractor also put up scaffolding unnecessarily to do the work, and it was erected dangerously and without the necessary licence as noted by a traffic enforcement officer who confirmed that the scaffolding had been erected without a permit. The scaffolding was left up until October. Mr Shehu’s evidence[34]For personal reasons that were explained at the hearing, Mr Shehu was unable to attend the hearing to be cross-examined on his evidence.[35]Mr Shehu states that he was the builder, developer and previous freehold owner of the Property and was now just one of the leaseholders. He states that since the Respondent became the freehold owner there has been a substantial and – in his view – unjustifiable increase in the service charges. He also questions the quality of some of the work, for example the cleaning. He also echoes the various points made in the Applicants’ statement of case regarding the major works. Tribunal’s analysis Building insurance[36]The Applicants’ comparable evidence is not perfect, but they have done their reasonable best in the circumstances. The Applicants have provided persuasive written and oral evidence that the Respondent has been obstructive in response to reasonable requests for information, and the Respondent has not engaged properly with these proceedings having had ample opportunity to do so.[37]On its face there is nothing about the comparable evidence to indicate that it is unreliable, and therefore we are satisfied that it is appropriate to use that comparable evidence to set a reasonable charge for each year. We are also satisfied with the Applicants’ suggested methodology of gradually increasing the premium year on year to reflect inflationary pressures on the insurance market from the figure in 2018/19 (£1,057.30) to the Applicants’ proposed figure of £1,274.13 for 2023/24, this being the higher of the Applicants’ two alternative quotes.[38]Accordingly, the building insurance premiums are reduced to the following amounts: 2019/20 £1,100.67 2020/21 £1,144.04 2021/22 £1,187.41 2022/23 £1,230.78 2023/24 £1,274.13 Electricity[39]Again, whilst the Applicants’ evidence is not perfect, they have done their reasonable best in the circumstances. The Applicants have provided persuasive written and oral evidence that the Respondent has been obstructive in response to reasonable requests for information, and the Respondent has not engaged properly with these proceedings having had ample opportunity to do so. In addition, we note Mr Muncey’s evidence regarding the lack of any obvious reason for high electricity consumption.[40]We consider the Applicants’ alternative figures to be reasonable and are content with their methodology of gradually increasing the figure year on year to reflect inflationary pressures. Accordingly, the charges are reduced to the following amounts: 2021/22 £137.85 2022/23 £193.93 2023/24 £250.00 Cleaning[41]Mr Reid’s final submissions at the hearing contradict the Applicants’ own evidence. The Applicants’ proposed charge for all but 2019/20 is £720.00 for the year, and they have explained how they have reached that figure. In the light of the Applicants’ evidence as to the modest amount of cleaning and in the absence of any evidence from the Respondent we accept the Applicants’ evidence. Therefore, the charge for 2019/20 remains at £474.60 and the figure for all other years is reduced to £720.00. Monthly testing[42]The Applicants accept the figure of £342.72 for 2021/22 but object that the figure rose sharply thereafter. We accept that the increases have been very high, and no explanation has been provided by the Respondent. We consider that an increase of 10% each year would be reasonable, and accordingly the charges are reduced as follows: 2022/23 £376.99 2023/24 £414.69 Bin cleaning[43]The Applicants’ credible evidence is that no bin cleaning took place, and this evidence has not been countered by the Respondent. Therefore, nothing is payable for bin cleaning. Window cleaning[44]The Applicants consider the window cleaning costs for 2022/23 and 2023/24 to be too high, they have obtained two alternative quotes and propose that a midway point between the two quotes is taken for 2023/24 (namely £454.00). They also propose that the figure for 2022/23 should be midway between the figure for 2019/20 (there being no charge in 2020/21 or 2021/22) and the new proposed figure for 2023/24.[45]We have no evidence from the Respondent, the existing figures for 2022/23 and 2023/24 do seem high and we have alternative quotes from the Applicants. We are satisfied with the Applicants’ evidence and with their proposed methodology, and accordingly we agree that the figure for 2022/23 should be reduced to £425.00 (halfway between £396.00 and £454.00) and that the figure for 2023/24 should be reduced to £454.00. Drains servicing[46]The Applicants assert that the drains servicing was unnecessary, but it is unclear on what basis they have reached this conclusion. Drains servicing is a perfectly normal activity and it could well have been prudent to service the drains annually in relation to this building.[47]As regards the cost, it is true that the cost has increased but this does not itself demonstrate that the higher cost is unreasonable; maybe (for example) the original charge was below the market rate or maybe the servicing in the early years was more of a cursory inspection than a full servicing. In any event, the Applicants’ own alternative quote would appear to work out higher than the amount charged by the Respondent. Accordingly, these charges are payable in full. Accountant’s fee[48]The Applicants have provided no alternative quotes, and the charges seem reasonable. The mere fact that the charges have risen does not by itself demonstrate that the later charges are unreasonable, and again there are various possible reasons as to why the charges would have been lower in earlier years. Accordingly, these charges are payable in full. Management fee[49]The level of the management fee would have been reasonable for a good service. However, the managing agents have provided a very poor service. They have overcharged for many items, they did not obtain a scaffolding licence when one was needed and they have failed to respond constructively to requests for information on the part of the Applicants. Neither the managing agents nor the Respondent itself have engaged with these proceedings, and therefore there is no basis for doubting the credibility of the Applicants’ assessment.[50]Deciding by how much the management fee should be reduced is not a scientific process, but on the basis of the information before us we agree with the Applicants that the fee should be reduced by 50% in each year. Major works[51]The Applicants’ arguments regarding alleged consultation narrowed during the course of these proceedings and were ultimately reduced to the argument that the Respondent failed to follow up on the Applicants’ proposed contractor. On that specific point, the notice of intention inviting leaseholders to (amongst other things) nominate an alternative contractor was dated 29 March 2023. That notice could legally have specified a period of as little as 30 days as the relevant period within which leaseholders needed to respond, but in fact in specified a period of 35 days. Three of the Applicants put forward L.K. Carpenter as their proposed contractor, but they did not do so until 8 June 2023 which was well outside the 35 day time limit. The Respondent was therefore under no legal obligation to consider those leaseholders’ proposed contractor, as details were provided to the Respondent outside the statutory time limit. The Applicants have therefore not demonstrated that there was any breach of the statutory consultation process.[52]As regards the need for the works, the Applicants have failed in our view to demonstrate that the works did not need doing at all. But, having noted the nature and amount of the work actually done on the basis of the evidence before us, we do accept that the amount charged by the Respondent is unreasonably high.[53]As to what would be a reasonable charge, there is not a wealth of information before us, but again this is largely the fault of the Respondent and its refusal to engage with these proceedings and provide basic information, and we do not consider that the Respondent should be able to benefit from its failure to engage. We note the contents of the quote from L.K. Carpenter, including the narrative of the work for which they were quoting. It is arguable that the work actually done was less than that for which L.K. Carpenter quoted, but(a) we do not have detailed information as to the amount of work done and(b) it still constitutes a very considerable reduction from the amount actually charged.[54]Therefore, in the absence of better evidence as to what would be a reasonable sum, we will take the L.K. Carpenter quote of £2,640.00 (inclusive of VAT) as being a reasonable charge in the circumstances. Fire risk assessment[55]At the hearing, both Mr Muncey and Mr Reid made a point regarding the cost of a fire risk assessment, but the cost of the fire risk assessment does not form part of the Applicants’ statement of case and therefore the reasonableness or otherwise of this charge cannot form part of this determination. Cost applications (including further directions) Section 20C and Paragraph 5A[56]The Applicants have applied for a cost order under section 20C of the 1985 Act (“Section 20C”) and for a cost order under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (“Paragraph 5A”). The relevant parts of Section 20C read as follows:- (1) “A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before … the First-tier Tribunal … are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant …”. The relevant parts of Paragraph 5A read as follows:-“A tenant of a dwelling in England may apply to the relevant … tribunal for an order reducing or extinguishing the tenant’s liability to pay a particular administration charge in respect of litigation costs”.[57]The Section 20C application is therefore an application for an order that the whole or part of the costs incurred by the landlord in connection with these proceedings cannot be added to the service charge. The Paragraph 5A application is an application for an order that the whole or part of the costs incurred by the landlord in connection with these proceedings cannot be charged direct to the Applicant as an administration charge under his lease.[58]Whilst they have not won on every point, the Applicants have been very successful in their main application and the Respondent has not engaged with these proceedings at all. Accordingly, it is appropriate to make a full Section 20C and a full Paragraph 5A cost order in the Applicants’ favour. Rule 13[59]The Applicants indicated that they might also wish to pursue a cost application under paragraph 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (“Rule 13”). Any such application must be made by no later than 5pm on 13 September 2024 by email to the tribunal with a copy to the Respondent. Any such application should be accompanied by(i) a proper breakdown of the costs in respect of which the Rule 13 cost order is sought and(ii) factual and legal arguments in support of the application.[60]If the Applicants do make a Rule 13 cost application the Respondent may respond. Any such response must be made by no later than 5pm on 27 September 2024 by email to the tribunal with a copy to the Applicants. Name: Judge P Korn Date: 30 August 2024 RIGHTS OF APPEALa. A. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) a written application for permission must be made to the First-tier Tribunal at the regional office dealing with the case.b. B. 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.c. C. If the application is not made within the 28 day time limit, such application must include a request for extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.d. D. 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. APPENDIX 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(6) An agreement by the tenant of a dwelling … is void in so far as it purports to provide for a determination – (a) in a particular manner, or (b) on particular evidence.