[2023] UKUT 168 (LC)

Leasehold service charges are often payable on the basis that the landlord’s cost of maintaining the building is shared between a number of lessees. The lease will usually prescribe the way that cost is apportioned between them; in a straightforward case the cost will be shared equally, and in other cases the apportionment may be unequal. Some leases give the landlord the power to change the apportionment, and there have been a number of decisions of the higher courts in recent years about the exercise of such powers. The law now has to be interpreted in the light of the recent decision of the Supreme Court in Aviva Investors Ground Rent GP Limited v Williams [2023] UKSC 6 (“Aviva v Williams”).

The appellant, Hawk Investment Properties Limited, is the freeholder of Heritage Close, a 1970s development in St Albans, near the Abbey, comprising both commercial units on the ground floor and residential maisonettes above. The residential leases prescribe a method of apportioning the service charge, and give the landlord power to change that apportionment in certain circumstances. The appellant appeals the decision of the First-tier Tribunal (Property Chamber) (“the FTT”) about the validity of its decision to change the apportionment in the exercise of that power.

The FTT’s decision was made, and the grounds of appeal drafted, before the Supreme Court handed down its decision in Aviva v Williams. The appellant then applied to add an additional ground of appeal, namely that the FTT’s decision was not consistent with the law as set out by the Supreme Court in Aviva v Williams; the respondents helpfully did not object to that amendment and I gave permission for the additional ground to be added.

The appellant was represented in the appeal by Mr Mark Loveday and Ms Ceri Edmonds of counsel, and the respondent leaseholders by Mr Nicholas Grundy KC; I am grateful to them all.