“1.1 What you pay for the property The total rent you have to pay each week for the property starting from the date of this agreement is made up as follows: Net rent£40.29 A variable service charge made up of Schedule A Schedule B Schedule C Schedule D Schedule E Current scheme service charge£27.93 Water rates (if appropriate)£ 1.45 Other charges£ 1.62 The total rent you should pay each week£71.31 1.2 The total rent The total rent is due weekly and in advance and must be received by us on Monday of each week (but if you prefer you can arrange with us to pay the rent on a monthly basis in advance)… 1.5 Changing the net rent a We may increase or decrease the net rent at any time during the first year of this tenancy by giving you at least one month’s notice in writing telling you the amount of the new net rent and the date on which you must start paying it. Thereafter, we may in accordance with the provisions of Sections 13 and 14 of theHousing Act 1988 increase or decrease the net rent by giving you at least one month’s notice in writing telling you the amount of the new net rent and the date on which you must start paying it. Correction of any significant errors that would result in a reduction in the amount payable will come into effect immediately on notification and will be backdated to the date of change. We will not increase the net rent within less than one year of the date of the last increase. The new net rent will be amount stated in our notice, unless you refer the notice to a Rent Assessment Committee to have a market rent determined. In that case the maximum net rent you will have to pay for the following 12 months will be the rent determined by the Rent Assessment Committee. You have the right to refer the notice to a Rent Assessment Committee during the first six months of the tenancy. b. At any time during the tenancy you and we may agree that your net rent will be increased in return for improvements to the property carried out by us. Any such agreement will state the amount of the increase, the date from which it will take effect and the improvements to which it relates. Any such increase will not count as an increase for purposes of clause 1.5a above. 1.6 Services we provide In this tenancy agreement ‘services’ means the services set out in Schedules A, B, C, D and E attached to this agreement, as altered, added to, modified, reduced or removed from time to time. We agree to provide and maintain the services and to renew the equipment referred to in the schedules as and when appropriate. We are not obliged to provide services if we are unable to provide any of them for reasons beyond our control. Wherever possible, we will give you reasonable notice before we stop providing a service. All costs relating to the services listed in Schedules A, B, C, and D will be apportioned between all the dwellings which receive those services or to which those services are available. 1.7 Changing the services We may, but only after consulting you, any recognised tenants’ association and any other tenants who would be affected by the increase, add to, remove, reduce or vary the services we provide. 1.8 Calculating the service charge The proportions in respect of the services for the property are stated in the schedules. If there is any change in the number of dwellings which receive services or to which services are available (for example, if neighbouring or adjoining schemes are included in the scheme), or if it is reasonable for us to vary the proportion for any other reason, we will recalculate the service charge proportions for the property in accordance with the schedules. We will give you notice of any such recalculation and will supply you with a copy of the service charge calculation (and, if applicable, recalculation each year). We will supply you with a copy of the service charge calculation each year when we issue the notice telling you the new amount of the service charge payable. 1.9 Surpluses and deficits If the cost of services we provide under Schedules A, B, C and E in any one period of 12 months is higher or lower than the income receivable during the same period in respect of such services then surpluses and deficits will be apportioned between the tenants in the same proportions as they are liable to contribute to the cost of services in question at the end of that period. Surpluses or deficits will be subtracted from or added to the service charge payable for the following 12 months or as otherwise agreed by us and a majority of the tenants who contribute towards the cost of such services. If the cost of heating services we provide under Schedule D in any one period of 12 months is higher or lower than the income receivable during that same period in respect of such services, then any surplus in respect of the provision of heating and hot water will be refunded to tenants in the same proportion as they are liable to contribute towards the costs of these services at the end of that period. Any deficit will be apportioned between those tenants in the same proportions and added to the service charge payable for the following 12 months or as otherwise agreed by us and a majority of the tenants who contribute towards the cost of such services. 1.10 Changing the service charges We may increase or decrease the service charge by serving a notice on you telling you how much the new service charge will be and when you will have to start paying it. We will usually change the service charge once a year on the first Monday in July. We may change the service charge ore than once a year during the transitional period from fixed to variable service charges or if there is a material change to the services we provide or the costing of services provided. In any event we will not increase the service charge more than twice in any 12-month period. If we do not know exactly how much it will cost us to provide the services, we may estimate our costs and make any necessary adjustments at the first change of the service charge after we produce our accounts for the period. Our service charges are subject to the provisions of theLandlord and Tenant Act 1985 (as amended from time to time). These provisions include an obligation in us to consult you before we incur large items of expenditure. You can ask us for a copy of the leaflet we have prepared which explains the effect of these provisions. This includes tenants’ rights to refer our service charge to the Leasehold Valuation Tribunal for them to test its reasonableness; your right of access to the detailed accounting records and invoices; your right to have an audit of the financial records and arrangements for correction of any errors that might be discovered.”
“18. Meaning of ‘service charge’ and ‘relevant costs’ (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, 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.”
“1.3 In this Agreement the term ‘Rent’ refers to the sum of the net rent, and service charge and water charge set out above or as varied from time to time, in accordance with this Agreement. The payment of monthly rent is due in advance on the 1 st day of each month. 1.4a During the first year of this tenancy the Association may increase or decrease the Rent payable only once. The Association may increase or decrease the Rent payable only once. The Association will give the Tenant no less than one calendar month’s notice in writing stating the new Rent. 1.4b After the first year, the association will increase or decrease the Rent once a year by giving the tenant no less than one calendar month’s notice, in writing, of the increase or decrease. The notice shall specify the Rent and the included Service Charge proposed.”
“21. There is nothing in the tenancy agreements indicating that any altered rent is to be calculated in any particular manner, or linking an alteration in rent (including service charge) with an alteration in the costs of providing any relevant services. Accordingly, it seems to me that section 18(1)(b) is not satisfied. It is true that it can be said that the Appellant in deciding whether to serve a notice of increase and, if so, how much that increase should be may well inform itself (as indeed it accepts it does) by reference to the estimated costs of providing services in the forthcoming year. However the ability in someone to serve a notice increasing the rent, if it chooses to do so, and to calculate that proposed new rent taking into account increases in the costs of services does not enable it in my judgment to be said that the rent (including service charge) is a payment ‘the whole or part of which varies or may vary according to the relevant costs’. The sum payable does not vary in accordance with the relevant costs. Nor in my judgment can it be said that it ‘may vary’ in accordance with those costs. There is no direct relationship between the amount of the costs as a cause and the amount of the service charge as a consequence. Interposed between the amount of the costs and the amount of the service charge is the independent decision of the landlord (here the Appellant) or of the Rent Assessment Committee as to how much the new rent/service charge should be. Of course it can be said that the Appellant and that Rent Assessment Committee may take into account the reasonably estimated amount of the service costs in the forthcoming year, but that in my judgment is at least one remove from a situation where a rent varies or may vary according to the relevant costs.”
“5.4 The view of the Tribunal…is that the addition of this further clause in this particular agreement differentiates this case from those examined by the Lands Tribunal in the two decisions referred to. This particular provision makes it very clear, in the view of the Tribunal, that there is indeed, as stipulated by His Honour Judge Huskinson, ‘a direct relationship between the amount of the costs as a cause and the amount of the service charge as a consequence’. The effect of the provision in clause 1.9, as understood by the Tribunal, is that if the estimate of services for one year proves to be inaccurate, such variation as thereafter takes place by the reconciliation is indeed linked to the ‘cost of services’ as specifically provided for in clause 1.9. There is no provision in the tenancy agreement for some form of random variation unassociated with the ‘costs of services’. 5.5 Although for the purposes of section 18(1)(b) the service charge may not necessarily vary (ie if no notice is served), it is indeed the position that it ‘may vary according to the relevant costs’. In other words, on a proper construction of clause 1.9 and section 18 of the Act, the service charge in this case is one in respect of which ‘the whole or part…may vary according to the relevant costs’. It was not in contention that those relevant costs were indeed costs or estimated costs incurred or to be incurred by the landlord ‘in connection with the matters for which the service charge is payable’ for the purposes of section 18(2) of the Act, and in any event the Tribunal finds that clause 1.9, for the reasons indicated, does indeed make that link between the variation and the expenditure on such relevant costs. 5.6 It follows that the Tribunal has concluded that the service charges as referred to in the context of this tenancy agreement are indeed variable service charges for the purposes of the Act and that in all the circumstances the Tribunal does have jurisdiction.”
“1.1 You agree to pay the following charges to the Association weekly in advance at the commencement and throughout the period of the tenancy subject to 1.2 below. Gas Heating£ 6.36 Rent£49.52 Service Charges£ 8.27 Support Charge£ 6.36 Total Weekly Payment£65.66 1.6 The Association may vary the amount of Service Charge payable every six months by giving the tenant 4 weeks written notice of any change at any time throughout the duration of this agreement. The notice shall specify the proposed new Service Charge. 1.7 Service Charges The Association will provide the following services, equipment or furniture at the Property for which the tenant will pay a Service Charge. You will be provided with a breakdown of the Service Charge items included at the commencement of the tenancy. Service Costs may be apportioned between tenancies receiving a service. If you disagree with the reasonableness of the costs or standard of service you may appeal to The County Court. 1.8 Service Charge Policy The Association will seek to recover through Service Charges only its actual expenditure incurred in providing services, equipment and furniture plus an administration fee. Where services are provided to a number of premises the Association may apportion the charge.”