De Vere Court, 91 Hoe Street, London E17 4SA LON/00BH/LAC/2024/0002
FIRST-TIER TRIBUNAL
PROPERTY CHAMBER (RESIDENTIAL PROPERTY)
Case No LON/00BH/LAC/2024/0002
Between
(1) Hornbeam Labs Limited (Flat 2) (2) Timothy Quayle (Flat 1) (3) Full Power Corporation (Flats 4, 5 & 6) (4) Keahn Rahiminejad (Flat 8) (5) Lawrence Best (Flat 7)ApplicantAssethold LimitedRespondent
Before
Judge TagliaviniMr Duncan Jagger MRICSMs Clare Munro for the ApplicantEagerstates Limited Schedule 11, paragraph 5 of the for the RespondentVenue 10 Alfred Place, London WC1E 7LR 2 October 2024 14 October 2024Date 14 October 2024Property: E17 4SA (1) Hornbeam Labs Limited (Flat 2) (2) Timothy Quayle (Flat 1) (3) Full Power Corporation (Flats 4, 5 &Type of application: Commonhold and Leasehold Reform Act 2002
DECISION
[1]The tribunal determines the administration fee in the sum of £648 i.e. £72.00 (including VAT per lessee) charged by the respondent in respect of the collection of ground rent is not due from or payable by the applicants under the terms of their lease.[2]The tribunal makes an order under s.20C of the Landlord and Tennant Act 1985.[3]The tribunal makes and order under paragraph 5A of Schedule 11 of the Commonhold and Leasehold Reform Act 2002. The application[4]This is an application for a determination of:(i) Whether the respondent is entitled to impose an administration charge of £72 for the collection of rent as referenced in the lease at Schedule 7 Para 2.3.2. This appeared in an invoice dated 28 November 2023.(ii) Whether costs in connection with forfeiture proceedings are recoverable. These costs appear to relate to matters concerning case reference LON/00BH/LSC/2023/0209.(iii) Whether orders should be made under s 20C and Para 5A Sch 11.[5]Subsequently, the respondent was debarred from playing any further role in this application. That debarring Order was partially lifted by an Order dated 16 Augst 2024 and provided that ‘The Tribunal will be determining the issue raised at para 2(i) of the 16 April 2024.’ This was on the grounds that the question under 2(ii) above had already been determined by the tribunal in its decision LON/00BH/LSC/2023/0209. Background[6]The leaseholders of De Vere Court acquired the right to manage the subject property with effect from 31 January 2023. Since then, the respondent has issued demands to lessees for payment of ground rent and added to this a ‘collection’ charge of £72.00 and has asserted this is an administration charge pursuant to Schedule 7 paragraph 2.3.2 of the lease.[7]The respondent has also sought to make demands for the payment of administration charges in the sum of £150 in respect of forfeiture proceedings. However, similar charges were found by the tribunal in its decision in LON/00BH/LSC/2023/0209 not to be payable by the lessees. As stated above this will not be dealt with in this application as it has already been the subject of a determination by a previous tribunal. Preliminary matters[8]Only those lessees who have made a signed written application to be joined as a party, are applicants to this application. The property[9]The subject property at De Vere Court, 91 Hoe Street, London E17 4SA (‘the Property’) comprises a purpose built block containing 9 flats. The applicants’ case[10]The applicants asserted that the administrative charge for the collection of ground rents is not payable under the terms of the lease and in reliance on Avon Ground Rents Ltd v Stampfer [2022] EWCA Civ 1375.[11]The applicants also asserted that a number of cases have come before the First Tier Tribunal on the same point, i.e. whether charges may be made for ground rent collection. A common feature appears to be that the Respondents try to claim charges for ground rent collection after the leaseholders have been awarded the Right to Manage the block.[12]The applicants stated that the respondents claim that a charge for collection of rent on the De Vere Court building is billable under Schedule 7 of the leases at paragraph 7-2.3.2 is wrong. The applicants accepted that previous cases at the First Tier Tribunal, although are not binding on the present application the present situation, it is clear that the Respondents have been told on several occasions that there is no basis for using service charge provisions in a lease to claim an administration charge. The respondent’s case[13]The respondent asserted that the Rents are defined in the lease at clause 1.1.8 and at clause 2.1 it is to be paid by equal yearly payments on 1 January in each year. At clause (sic) 7-2.3.2 of the leases it is stated that: If the Landlord or a person connected with the landlord attends (where permitted by law) to ... 7-2.3.2.4 The collection of rents from the Building Then an expense is to be deemed to be paid or a cost incurred by the Landlord, being a reasonable fee not exceeding that which independent agents might property have charges for the same work.[14]The respondent asserted that the cost charged for the year is £50 plus vat and state that this is a reasonable fee which may properly have been charged by an independent agent. The tribunal’s reasons[15]The tribunal determines that the respondent cannot be said to have collected the ground rent that was said to due, after the service only of a demand for payment. Therefore, the tribunal finds the respondent is not entitled to demand an administration fee of £50 plus £72 including VAT for the collection of the ground rent; Avon Ground Rents Ltd Stampfer [2022] EWCA Civ 1375. Therefore, the sum of £50 plus £72 including VAT demanded for the collection of the ground rent is not due from or payable by the applicants whether or not it has been properly made due by the service of a notice under s.166 of the Commonhold and Leasehold Reform Act 2002 (if any).[16]Further, the tribunal finds the leases make reference to the attendance at the Building by the landlord or an agent for the purpose of the collection of the ground rent. In this instance there has been no ‘attendance’ at the Building but simply letters and emails sent demanding payment of the ground rent and administration charge and the respondent has not asserted otherwise. Therefore, the respondent cannot be said to have ‘collected’ the ground rent and is therefore not entitled to seek an administration charge.[17]In light of this decision, the tribunal considers it reasonable to make an order under section 20C of the Landlord and Tenant Act 1985 and paragraph 5A of schedule 11 of the Commonhold and Leasehold Reform Act 2002, so that none of the respondent’s costs of this application can be sought from the applicants. Name: Judge Tagliavini Date: 2 October 2024 Amended 14 October 2024 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 should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for-permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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).