[2023] UKUT 207 (LC)

Sections 18 to 30 of the 1985 Act contain a series of rights and protections relating to service charges. For the purpose of those provisions section 18(1) defines a service charge as “an amount payable by a tenant of a dwelling … (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.” Section 18(2) then defines “relevant costs” as “the costs or estimated costs incurred or to be incurred by or on behalf of the landlord … in connection with the matters for which the service charge is payable.”

Section 19(1)(a) provides that relevant costs are to be taken into account in determining the amount of a service charge payable for a period only to the extent that they are reasonably incurred, and the amount payable is to be limited accordingly.

Under section 27A(1), an application may be made to the FTT “for a determination whether a service charge is payable” and, if it is, as to the person by whom it is payable, the amount which is payable, the date at which it is payable and other such details.

Section 30 provides that in the provisions of the 1985 Act relating to service charges the expression “landlord” includes “any person who has a right to enforce payment of a service charge”.

Section 30A then introduces a Schedule to the 1985 Act conferring rights with respect to insurance on tenants. Those rights include the right under paragraph 2 for a tenant by whom a service charge for insurance is payable to require the landlord to supply a written summary of the insurance effected for the time being. The information which the landlord is required to provide is limited and comprises only the insured amount, the name of the insurer and the risks in respect of the dwelling or building containing it is insured (paragraph 2(4)). The tenant is given a further right by paragraph 3(1) to require the landlord to afford reasonable facilities for the tenant to inspect any relevant policy or “associated documents” and to obtain copies. The “associated documents” which the tenant is entitled to see are narrowly defined by paragraph 3(7) as “accounts, receipts or other documents which provide evidence of payment of any premiums due under the relevant policy in respect of the period of insurance which is current when the notice is served or the period of insurance immediately preceding that period.” That definition does not appear to me to be wide enough to cover documents relating to commission paid to any person by the insurer. The main purpose of the provision is to provide a means by which a tenant can obtain evidence that payment of the insurance premium has been made.

Paragraph 8 of the Schedule to the 1985 Act provides a right of a different type. It applies only where a tenancy of a dwelling requires the tenant to insure the dwelling with an insurer nominated or approved by the landlord. In such a case either the tenant or the landlord may apply to the County Court or the appropriate tribunal (the FTT) for a determination whether the insurance which is available from the nominated or approved insurer is “unsatisfactory in any respect” or the premiums are excessive.