Carlow House RTM Company Limited v Stephen Francis Colchester & Ors [2026] UKUT 33 (LC)

[2026] UKUT 33 (LC)

LC-2025-229

IN THE UPPER TRIBUNAL (LANDS CHAMBER)

AN APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER)

Ref: LON/00AG/LSC/2024/0254

Venue Royal Courts of Justice, Strand,

Between

CARLOW HOUSE RTM COMPANY LIMITEDAppellant

STEPHEN FRANCIS COLCHESTER andRespondents

VIVIENNE ANN COLCHESTER (1)Respondents

DAVID WALKER and BEATRIZ LEMOS (2)Respondents

ZHI BING MAO (3)Respondents

ANTONIO PREGUEIRO and RAMZI NASIR (4)Respondents

London WC2A 2LL

26 January 2026

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

LANDLORD AND TENANT – SERVICE CHARGES – interpretation of leases – conversion of former office building – failure by developer and subsequent freeholder to complete works of repair before grant of residential leases – works completed by RTM Company – whether cost of works recoverable as service charges – s.96, Commonhold and Leasehold Reform Act 2002 – appeal allowed

Carlow House,

Carlow Street, London NW1

Martin Rodger KC, Deputy Chamber President

13 January 2026

Simon Allison KC, instructed by Brethertons LLP for appellant

Mr Stephen Colchester and Mr David Walker for themselves and the other respondents

The following cases are referred to in this decision:

Arnold v Britton[2015] AC 1619

Continental Ventures v White[2006] 1 EGLR 85

Daejan Properties Ltd v Griffin[2014] UKUT 206 (LC)

Edlington Properties Ltd v JH Fenner & Co Ltd[2006] 1 WLR 1583

Introduction

[1]This appeal is about the liability of the leaseholders of four flats in Carlow House, near Regent’s Park in London, to contribute under the terms of their leases to the cost of repairing the glazed roof which sits on top of an atrium providing daylight to the centre of their building. In a decision published on 7 February 2025 the First-tier Tribunal, Property Chamber (the FTT) decided that the leaseholders were not liable to make any contribution to those works. The FTT granted permission to appeal.

[2]The work to the glazed roof commenced a few days before 14 March 2022, the date on which management of the building became the responsibility of the appellant, Carlow House RTM Company Ltd, following its successful acquisition of the right to manage under Part 2 of the Commonhold and Leasehold Reform Act 2002. I will refer to the appellant as the RTM Company. Before the FTT it had been represented by one of its directors, but at the hearing of the appeal it was represented by Mr Simon Allison KC.

[3]The respondents are themselves members of the RTM Company and leaseholders. They were represented before the FTT by Mr Stephen Colchester, who is a joint leaseholder of Flat 407 on the fourth floor of Carlow House. Mr Colchester again spoke on the leaseholders’ behalf at the appeal, as did Mr David Walker, one of the joint leaseholders of flat 408, also on the fourth floor.

The facts

[4]The proceedings before the FTT were an application by the leaseholders of flats 320, 323, 407 and 408 under section 27A, Landlord and Tenant Act 1985 for the determination of their liability to pay three specific service charges levied by the RTM Company for the 2022 service charge year. Liability for two of those charges has been resolved and only the cost of the work to the roof remains in dispute.

[5]The underlying facts were familiar to the parties and were apparently not contentious, which may explain why the FTT did not make formal findings of fact. During the hearing of the appeal, I was given a good deal of information which is not recorded in the FTT’s decision, and which it may or may not have been made aware of. The following summary includes some of that material.

[6]Carlow House was built in about 1900 as a factory on ground and three upper floors, to which an additional floor was later added. It is now a block of 102 flats. The building’s conversion to its current size and configuration was completed in three phases, beginning in the 1970s or 1980s when it ceased to be a factory and was converted for office use.

[7]Next, in about 1990, the fourth floor was added to the building to provide thirteen flats, with the original lower floors remaining as office accommodation. At that time a glazed barrel vaulted roof was installed, covering what had previously been an open courtyard in the centre of the building, but which now became an enclosed atrium. Works of repair were carried out to the atrium roof in 2003, but further work had become necessary by 2015. The cost of that work, carried out in 2022, is the subject of this appeal.

[8]Long leases of the flats on the fourth floor were first granted in 1990, but these were surrendered in 2016 in return for new longer leases. The replacement leases (which are in substantially the same form for all of the flats on the fourth floor) were categorised by the FTT as Lease A.

[9]The category A Leases include a covenant by the landlord to comply with obligations in the Sixth, Seventh and Eighth Schedules. By clause 3 and paragraph 15 of the Fourth Schedule the leaseholder agrees to pay service charge contributions in respect of the landlord’s costs of compliance with the obligations in the Sixth and Seventh Schedules (but not the Eighth, which I will come to later).

[10]The landlord’s obligations listed in the Sixth Schedule to the Category A Leases (the cost of which forms part of the leaseholder’s service charge liability) relate to work benefitting the whole building and include the following, at paragraph 3(a):

“To initially provide and thereafter to keep in good repair and decorative condition, and where necessary renewing and or replacing (a) the roof (which without limitation shall include the Atrium and the individual rooflight pyramids forming part of the flats on the fourth floor of the Building) foundations main walls and other structural parts of the Building”

“To initially provide and thereafter to keep in good repair and decorative condition, and where necessary renewing and or replacing

[11]After the new category A Leases had been executed, GHL converted the office accommodation on the lower floors of the building to create 89 new flats. That was the third and final stage in the building’s transformation from Victorian factory to modern residential block.

[12]The grant of the category A Leases was part of a larger arrangement intended to secure the cooperation of the original residential leaseholders in the further conversion of the building. That arrangement was contained in a document executed on 15 September 2015 (the 2015 Agreement). The parties to the 2015 Agreement were the leaseholders of all thirteen of the fourth floor flats and GHL (Carlow) Ltd, a company in the Galliard Homes group, which owned the freehold of building at that time (GHL).

[13]The 2015 Agreement was not shown to the FTT, but at the appeal the parties made brief oral submissions about it and a copy was sent to me after the hearing. I agreed to receive it on the basis that its contents were common knowledge between the parties at the time of the hearing before the FTT and on the understanding that I would invite further submissions on its admissibility in evidence if I considered that it might make a difference to the outcome of the appeal. In the event, I am satisfied that it does not make a difference, but it goes a long way to filling in gaps which were left unrecorded by the FTT in its decision.

[14]The 2015 Agreement enabled the execution of works to create the new flats on the lower floors of the building (a project referred to as “the Development”). I was told that the Development included changes to the structure of the building which would not have been possible without the surrender or variation of the original leases. The 2015 Agreement first provided for the grant by GHL, as landlord, of the new category A, each for a term of 999 year without the payment of a premium and at a peppercorn rent, with completion to take place on 14 December 2015. Four of the leaseholders were also permitted to enlarge their flats, with the work being done by GHL at agreed rates. All of the leaseholders were relieved of their obligations to pay any further service charges, insurance costs or ground rent under their original leases, and would not be required to pay service charges under their new leases until the issue of a certificate of practical completion of the Development. GHL also agreed at clause 9 of the 2015 Agreement that it would carry out specified works of repair, renovation and improvement to the building at its own expense, including the repair of the atrium roof. These works were expressly to be carried out “as part of the Development” and to be completed within 18 months (i.e. by 15 March 2017). In return, the leaseholders acknowledged that GHL would be entitled to carry out the Development notwithstanding the covenants for quiet enjoyment to be contained in the new leases.

[15]The 2015 Agreement is referred to in the category A Leases. The Eighth Schedule comprises a covenant by GHL as landlord, on behalf of itself and its successors in title, to observe and perform the obligations of the landlord contained in the 2015 Agreement (the date of the agreement is incomplete in the example lease I was shown, but it is obvious from the description that the reference is intended to be to the 2015 Agreement). As a result of this covenant, any successor in title to GHL is bound by GHL’s obligations in the 2015 Agreement, including the obligation to carry out repairs to the atrium roof as part of the Development and to complete them by 15 March 2017.

[16]After the 2015 Agreement and the new leases had been executed, GHL converted the office accommodation and carried out most of the work it had committed to in the 2015 Agreement, but it failed to repair the atrium roof. In his written argument Mr Colchester recorded that this roof was in a state of disrepair at the time of the conversion of the lower floors and remained so until July 2022 when it was finally restored by the RTM Company.

[17]Long leases were granted for each of the new flats on the lower floors between May 2016 and February 2018. These are in similar, though not identical, form to the category A Leases, and were referred to by the FTT as Lease B. The category B Leases require the landlord “to keep the roof foundations main walls and other structural parts of the Building in good repair and decorative condition” (paragraph 3(a) of the Sixth Schedule) but do not include the specific reference to the atrium found in the comparable provision of the Category A Leases (paragraph 10 above). Nor do the Category B Leases include the words “To initially provide and thereafter to keep …” with which the landlord’s repairing obligation in the category A Leases begins.

[18]Notwithstanding its failure to carry out the works to the atrium roof, GHL caused a certificate of practical completion of the Development to be issued in April 2017. If that certificate was valid, it brought an end to the provision of the 2015 Agreement suspending the category A leaseholders’ service charge obligations. Those leaseholders, including Mr Colchester and Mr Walker, promptly began proceedings in the FTT against GHL to determine whether they were yet liable to pay service charges. The proceedings were settled at the tribunal door on the terms of a consent order agreed between the parties and approved by the FTT.

[19]The consent order is dated 30 August 2017 and comprises a typed front sheet signed by the Judge to which were attached four manuscript pages signed on behalf of the parties by their authorised representatives (Mr Colchester in the case of the category A leaseholders). After reciting the leaseholders’ application to the FTT under section 27A, and the parties’ agreement that what followed would fully and finally settle all issues raised by the leaseholders in photographs relied on in the application and all claims and causes of action arising from them, the consent order continued (so far as is relevant) as follows: “1. The parties agree that the date of practical completion of the works was 25 April 2017 for all purposes connected with the agreement dated 15/8/15.

[2]The Applicants will pay services charges under their leases that accrued due after 25 April 2017.

[3]The Applicants will pay the service charges in para 2 above after the certificate in para 10 below.

[4]The Respondent will comply with the requirement in clause 3(a) of the Lease to repair and decorate the roof of the Building to be undertaken in the period between 28 Sept ‘17 and ’18 so far as is reasonably practicable bearing in mind the potential need to consult under s.20 and on the basis that the work is not objected to by other tenants within the Building.

[5][Agreement that GHL would carry out work to remedy defective paving at a cost to itself not exceeding £15,000 and to a specification determined by a surveyor appointed by the RICS].

6 – 8 [Other works and services to be carried out or provided by GHL].

[9]Applicants will not bring any claim in respect of any alleged cause of action arising out of the allegations in these Applications and Galliard is released from any obligations under clauses 8 & 9 of the agreement 15 September 15.

[10]The surveyor appointed under clause 5 above shall certify the practical completion of the work in clauses 4-7 above to be final + binding

[11]These heads of terms bind from the date hereof although a fair copy is to be lodged with the Tribunal for sealing.”

[20]The category A leaseholders maintain that the effect of the consent order was that they were not required to pay the cost of work to the atrium roof (which is agreed to be the work referred to in paragraph 4 of the order). The work was not carried out by GHL but in April 2018 it transferred its freehold interest in the building to Adriatic Land 8 Ltd (Adriatic), which remains the freeholder. Having disposed of all its interest in the building GHL was dissolved in 2022.

[21]Adriatic appears to have accepted a liability to carry out the required works to the atrium roof (I assume because of the covenant in the category A Lease requiring successors in title of BHL to observe and perform the obligations in the 2015 Agreement). In October 2020 it consulted on the work and identified a contractor and a firm of surveyors to supervise the project. It may even have signed a formal building contract, although none is in evidence, and work appears to have started a few days before the RTM Company took over responsibility for management functions from Adriatic on 14 March 2022. The RTM Company did subsequently sign a JCT minor works contract with the contractor in which it was recorded that work commenced on 28 February 2022.

[22]The total cost of the work, including supervision, was £118,482.36. The cost was met from three sources. Adriatic contributed a total of £23,476.76 which was treated as being on behalf of the category A leaseholders. The category B leaseholders paid £81,017.05 in service charges. And the required balance totalling £13,973.27 was taken from the Carlow House sinking fund. The sum taken from the sinking fund was apportioned between the category A and category B leaseholders, with £2,594.27 being attributed to the former, and £11,379.00 to the latter.

[23]The leaseholders who are now respondents to this appeal applied to the FTT for a determination that none of them were liable to contribute towards the cost of the work to repair the atrium roof and that amounts taken from the sinking fund should be recredited. They also disputed certain electricity charges. Adriatic’s management functions had terminated on the acquisition of the right to manage by the RTM Company, and the respondent to the application was the RTM Company.

[24]In the course of the FTT hearing the issues over electricity charges were resolved. The substantive issue concerned payment for the atrium roof. The FTT decided that no service charges were payable in respect of those works by either the category A or the category B leaseholders and directed reimbursement of the contributions made by the respondents.

The issues

[25]The terms of the category A and category B Leases are different, and the FTT gave different reasons for its conclusions in relation to the A and B leaseholders. The issue in the appeal is the same in each case, namely, whether the different leaseholders were liable to contribute towards the cost of repairs to the atrium roof, but it is convenient to consider the two categories separately.

The liability of the category A leaseholders

[26]The FTT recorded in its decision that the category A leaseholders relied on paragraph 3 of the Sixth Schedule to their leases and on the consent order of 30 August 2017 in support of their argument that they were not liable to contribute to the cost of the atrium roof repairs. The FTT did not discuss the terms of the leases and based its conclusion solely on the consent order, saying this, at paragraph 43:

“[We] consider that the settlement consent order was designed to ensure that the Applicants with Lease A were not required to contribute to the roof works and therefore no service charge monies should have been demanded in connection with these. While no fresh demands were issued, the contribution from the sinking fund to the costs of the work represented a contribution from them and should be refunded.”

“[We] consider that the settlement consent order was designed to ensure that the Applicants with Lease A were not required to contribute to the roof works and therefore no service charge monies should

[27]One difficulty with the approach taken by the FTT is that the RTM Company was not party to the consent order and did not exist at the time the order was made. The order was a contract between GHL and the leaseholders of the fourth floor flats in 2017 (who included Mr and Mrs Colchester, Mr Walker and Beatriz Lemos). The FTT did not explain why it considered that that contract affected the rights and obligations of the category A leaseholders as against the RTM Company.

[28]A second difficulty is that there is nothing in the consent order to suggest that the category A leaseholders were not to contribute to the cost of the atrium roof repairs and the FTT did not explain why it thought it had that effect. The order refers to the application and to photographs showing the matters about which the leaseholders were complaining. The FTT might have known which photographs were being referred to but it did not have the 2015 Agreement which is also referred to. Leaving that difficulty to one side, paragraph 2 of the consent order is an unqualified agreement that the leaseholders will pay service charges under their leases that accrued due after 25 April 2017. Paragraphs 3 and 10 fix the date for payment of those service charges by reference to a certificate by a surveyor that work referred to in paragraphs 4 to 7 has been completed. The work referred to in paragraph 4 includes the repair of the roof, but it is identified by reference to “clause 3(a) of the Lease” (which must mean paragraph 3(a) of the Sixth Schedule to the category A Leases).

[29]There is no suggestion in the consent order that the cost of that work is not to be included in the service charges to be paid by the leaseholders, and since it is clear that the work would not be done until some time after 25 April 2017, the date from which the leaseholders’ liability to pay would begin to run under paragraph 2, the effect of the order was clearly that the cost would fall on the leaseholders. That impression is strengthened somewhat by the reference in paragraph 4 to statutory consultation (which would not be required unless some leaseholders were expected to contribute) and more so by paragraph 5 which deals in some detail with costs of remedial work for which GHL was to be responsible. If GHL was also intended to be responsible for the cost of repairs to the roof, why was that not made equally clear?

[30]The conclusion that the cost of the atrium roof repairs was to be part of the service charge is also confirmed by paragraph 9 of the consent order which releases GHL’s obligations in clauses 8 and 9 of the 2015 Agreement. Clause 9 is the term of the 2015 Agreement which required GHL to complete the atrium roof repairs as part of the Development within 18 months. The consent order requires that the work be done under the lease, and therefore at the leaseholders’ expense, while simultaneously releasing GHL from the obligation to carry out the same work under the 2015 Agreement, which would have been at its own expense. The release of the obligations in the 2015 Agreement must also have brought an end to GHL’s obligations under the Eighth Schedule to the category A Leases; it cannot have been intended that the obligations would cease to apply so far as they were required by the 2015 Agreement, but continue to apply so far as the Eighth Schedule required GHL to comply with the 2015 Agreement.

[31]Mr Colchester assured me that the intention of both sides when they entered into the consent order had been that the category A leaseholders would not contribute to the cost of the roof repairs. I do not doubt Mr Colchester’s sincerity and I have no reason to think that was not his understanding of the effect of what had been agreed. But what one party understands a document to mean is not determinative of anything. The meaning of a document is not the subjective understanding of one of the parties; it is what an objective reader who had all the relevant background information would have understood both parties to have intended it to mean. That was explained by Lord Neuberger in Arnold v Britton

[2015] AC 1619

“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.”

“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have be

[32]In my judgment the effect of the consent order was clear. It drew a line under the 2015 Agreement by fixing the date of practical completion, confirming that the leaseholders would be liable for service charges after that date, and releasing GHL rom it liability to pay for the roof repairs it should have carried out as part of the original Development.

[33]Mr Colchester placed great emphasis in his argument on the terms of the category A Lease, and in particular paragraph 3(a) of the Sixth Schedule, which was quoted by the FTT early in its decision but not then referred to at all. He explained that the significant words in paragraph 3(a) were the opening words, which obliged the landlord “to initially provide and thereafter to keep in good repair”, the roof, including the atrium and individual roof lights. The parties’ intention, he explained, was that the work which was known to be required to the atrium roof would be undertaken at GHL’s expense, hence, GHL was to “initially provide” the roof in good repair.

[34]Once again, I do not question the sincerity of Mr Colchester’s interpretation of the lease, but it faces two difficulties. The first is that when the category A Leases were granted the atrium roof was already present, having been provided during the previous phase of development. Mr Colchester sought to overcome that by explaining that the roof was in disrepair in 2015 and that the essence of the landlord’s obligation was that it was to “initially provide [the roof] in repair”; in other words, the landlord was to put the roof into repair at the start of the lease. That is a possible reading of the words. The usual meaning of a covenant to “keep in repair” is that the covenantor must immediately put the subject into repair, so the additional of the words “initially provide” would not change the effect of the covenant but would perhaps have been intended to add emphasis. But an intention that GHL should immediately put the roof into repair does not help the leaseholders when it comes to the second difficulty with their interpretation of paragraph 3(a). That is that there is nothing in paragraph 3(a) to exclude the cost of the works necessary to “initially provide” the roof in a state of repair from the service charges which the leaseholders were obliged to pay. The leaseholders’ covenant at clause 3 and paragraph 15(a) of the Fourth Schedule obliges them to contribute to all of the costs reasonably incurred by the landlord in complying with its obligations in the Sixth and Seventh Schedules. Those costs include the costs of initially repairing the roof. The lease itself is quite clear.

[35]The leaseholders placed no reliance on the 2015 Agreement before the FTT (or in the appeal until I asked to see it). It is referred to in the category A Leases and the Eighth Schedule binds successors in title to GHL to comply with its terms. It may be for that reason that Adriatic made the contribution it did on behalf of the category A leaseholders to the cost of repairing the atrium roof. But the consent order had specifically released GHL from its obligation to comply with clause 9 of the 2015 Agreement, and for the reason I have explained, the obligation in the Eighth Schedule to comply must also have been released since the parties cannot have intended GHL should both be liable and not be liable for the cost of the same work.

[36]By the time the consent order was made GHL was already in breach of the 2015 Agreement by its failure to complete the roof repairs by the agreed time, but any right to seek specific performance of that obligation and GHL’s liability in damages for that breach were compromised by the consent order. When Adriatic acquired its interest in the reversion the obligations in the 2015 Agreement had already been released, so Adriatic’s failure to undertake the necessary repairs was a breach of clause 3(a) of the Sixth Schedule, but it was not also a breach of the Eighth Schedule. Adriatic’s failure to carry out the work required by the lease would not absolve the leaseholders from their liability to pay the service charge. In general, a leaseholder’s liability to contribute to the cost of works is not reduced or removed altogether simply because of a delay in the works being carried out: Continental Ventures v White

[2006] 1 EGLR 85

; Daejan Properties Ltd v Griffin

[2014] UKUT 206 (LC)

, at 89].

[37]It is important to keep in mind that the question raised by the appeal is not whether the cost of the roof repairs should fall on Adriatic. The question is whether the RTM Company can collect the service charge after it had carried out the work.

[38]The RTM Company’s rights and obligations were created on the acquisition of the right to manage by sections 95 to 103 of the Commonhold and Leasehold Reform Act 2002. These effect a transfer of management responsibility from the landlord to the RTM Company. By section 96(2), “management functions” of the landlord become “functions” of the RTM Company. The expression “management functions” means functions with respect to services, repairs, maintenance, improvements, insurance and management (section 96(5)). By section 97(4), functions of a tenant which relate to any functions acquired by the RTM company by virtue of section 96, and which are exercisable in relation to the landlord, are instead, from the acquisition of the right to manage, exercisable in relation to the RTM company. The statutory language is a little clumsy but its general effect is that an RTM company is obliged by the statute to undertake the landlord’s management obligations and the tenant is obliged to comply with their own obligations, including by paying service charges. On both sides, these obligations are imposed by the statute, not by any contract between the RTM Company and the leaseholders.

[39]The leaseholders’ liability to contribute to the cost of work carried out by the RTM Company arises under their covenant at clause 3 and paragraph 15(a) of the Fourth Schedule. That obligation covers all of the work which the RTM Company was required to carry out and is not qualified by any exemption for the atrium roof.

[40]There is no suggestion the RTM Company was ever in breach of the obligation in paragraph 3(a) of the Sixth Schedule which required it to put the atrium roof into repair. By the time the right to manage was acquired and it became the RTM Company’s responsibility, work had already commenced, although a formal contract had not yet been executed. Nor was the RTM Company responsible for breaches of the 2015 Agreement by GHL or of the lease by GHL and Adriatic. Any right of set off which the leaseholders might have had against a claim brought by GHL or Adriatic because of their breaches, could not be used to reduce the liability of the leaseholders to the RTM Company. That would be the case if the RTM Company was a successor in title (see Edlington Properties Ltd v JH Fenner & Co Ltd

[2006] 1 WLR 1583

, at [64], per Neuberger LJ). The RTM Company is not a successor in title and there is even less reason to allow any set off to be relied on instead against it.

[41]For these reasons I am satisfied that the FTT was wrong to hold that the category A leaseholders were not required to pay for the repairs to the atrium roof.

The liability of the category B leaseholders

[42]The FTT’s reasons for concluding that the category B leaseholders were not liable to contribute to the cost of repairs to the atrium roof are also difficult to understand. The argument which it appears to have accepted was that the category B leaseholders bought newly built flats and should not be liable for the cost of work which should have been done as part of the original development. The FTT explained: “… no service charges can be demanded for works which were required before the practical completion certificate. This certificate was not provided until July 2022. Therefore the demands for works previous to that date are not payable.

“… no service charges can be demanded for works which were required before the practical completion certificate. This certificate was not provided until July 2022. Therefore the demands for works pr

[43]Practical completion of the development was certified on 25 April 2017. The certificate issued in July 2022 related only to the atrium roof. The FTT did not explain why the category B leaseholders’ liability under their leases should not apply in full from the date of grant and should be postponed for five years. The terms of sale of the leases on the lower floors were not referred to by the FTT but they made the obligation to accept the lease conditional on the completion of the individual flat (and the common parts so far as necessary to allow access to the flat). Completion of the category B Leases was not conditional on the completion of the Development (including the atrium roof) and the leases specifically contemplated that at that time work to the common parts or other areas might not be complete (clause 10(c)).

[44]The leaseholders’ liability under the category B Leases is straightforward. They covenant by clause 3 and paragraph 15(a) of the Fourth Schedule to pay the service charge proportion of the costs which the Landlord properly incurs in providing the services in the Sixth Schedule which the landlord (acting reasonably) designates as service charge items. The Sixth Schedule obliges the landlord to keep the roof in good repair. There is nothing in the lease limiting the costs which may be recovered. The costs are therefore recoverable from the leaseholders.

[45]It might have been argued that it was not reasonable for GHL to designate the cost of roof repairs required to complete the development as service charge items, but GHL has been dissolved and did not carry out the work. It has not been suggested that the RTM Company was not acting reasonably in designating the costs it incurred in repairing the roof as a service charge item, and such an argument could not succeed. The RTM Company was not at fault, it was not responsible for defaults of the developer or landlords, and it was required to carry out the work for the benefit of all the leaseholders. It was plainly reasonable for it to treat the cost as a service charge item.

[46]Mr Colchester referred to the fact that the category B leaseholders had the benefit of NHBC warranties and complained that the RTM Company had not sought to rely on those warranties to meet part of the cost of the work. But the RTM Company does not have the benefit of the warranties, only the category B leaseholders do.

[47]The fundamental misconception by the FTT was in equating the RTM Company with GHL and holding it responsible for GHL’s failure to complete the development properly. That is an untenable position, and the FTT was wrong to accept it.

Disposal

[48]For these reasons I set the FTT’s decision aside and substitute a determination that the disputed costs of the atrium roof repairs were payable by the leaseholders in the amounts recorded by the FTT in its decision.

[49]The FTT made an order under section 20C, Landlord and Tenant Act 1985 so that none of the RTM Company’s costs of the proceedings could be passed on to the leaseholders through the service charge. I set that order aside. There had obviously been some accounting errors in relation to electricity charges which contributed to the bringing of the proceedings by the respondents. I consider it just and equitable that no more than 75% of the RTM Company’s costs of the proceedings in the FTT should be treated as relevant costs when calculating any service charge payable by the respondents. The RTM Company was not professionally represented before the FTT and the relevant costs should therefore be modest in any event.

[50]The respondents sought an order under section 20C, Landlord and Tenant Act 1985 in respect of the costs of the appeal. The RTM Company has been wholly successful and it is difficult to see why the seven respondents should be protected from paying their fair contractual share, together with the remaining leaseholders, of the costs it has incurred. If the respondents wish to press their application they may make further submissions within 14 days. Martin Rodger KC, Deputy Chamber President 26 January 2026 Right of appeal