[2024] UKUT 37 (LC)

At paragraph 121 of its decision the FTT said that even had the condition in section 35(2)(f) been met it would not have exercised its discretion to vary the leases because the current provisions were “perfectly workable and satisfactory”. It said that because it took the view that the current arrangement has the landlord – being in occupation of the Commercial Unit – paying 14/38 of the cost of services to the Block. The FTT was aware that the Commercial Unit has a much bigger footprint than the rest of the Block. It took the view that 14/38 was a satisfactory apportionment for the Commercial Unit.

The appellant says that this is wrong. Having left the Commercial Unit out of account in considering whether the section 35(2)(f) gateway was passed it should equally have left it out of account in considering whether to vary the leases.

This is obviously not correct. If we go back to the example in paragraph 30 above, it will be seen that where there are 9 leases each paying 10% of the costs, and the landlord is living in the 10^th flat, the gateway is passed but there is no reason to vary the leases. The consequence of the appellant’s argument on ground 4 is that the leases in that case should be varied, which (in view of the way in which I have set up the example, with equal size and consumption rates for each flat) is clearly wrong. In the unlikely event that an application for variation were made in such a case there would have to be careful consideration of the reasons why the leases should be varied, and that would certainly include the extent of expenditure incurred for the benefit of the landlord’s flat.

Ground 4 fails.