[2024] UKUT 37 (LC)

Fecha: 23-Ene-2024

Section 5

…

1(2)…

(b)

“the Common Parts” means the lifts hallways entrances landings staircases balconies (save and excepting any exclusively serving any flat within the Block) dustbin enclosure boundary walls or fences and other parts of the Estate and any access areas steps pedestrian ways footpaths or accessway communal play and/or garden areas and car parking spaces (other than those demised) and the forecourts of the Estate and any other areas or facilities in the Block which are used or intended for use by the Leaseholders of the flats within the Block together with the Tenants of the Estate”

11.

It follows from what has been said above, and from the definition of “the Block” in the leases, that “the Block” in the case of Painter House includes the eastern half of the Commercial Unit on the ground floor. As for “the Common Parts”, the FTT found that they do not include any part of the Commercial Unit; there is no appeal from that finding (nor do I think that any such appeal could succeed, since the definition refers to areas intended for use by the leaseholders of the Block).

12.

The Leaseholder’s covenants are at clauses 3 and 4 and include a covenant to pay the Service Charge in accordance with clause 7.

13.

The Landlord’s covenants are at clause 5 and include the following obligations:

“5(2) That the landlord will at all times during the term … keep or procure to keep the Block insured against loss or damage by fire and other such risks as the landlord shall from time to time reasonably determine…
5(3) That (subject to payment of the Specified Rent and Service Charge and except to such extent as the Leaseholder or the tenant of any other part of the Block shall be liable in respect thereof respectively under the terms of this Lease or of any other lease) the Landlord shall maintain repair redecorate and renew (or procure the maintenance repair redecoration and renewal of): -
(a)
The roof foundations balconies patio areas (if any) and main structure of the Block and all external parts thereof including all external and load-bearing walls with the windows and doors of the outside of the flats within the Block (save the glass in such doors and windows and the interior surface of the walls) and all parts of the Block which are not the responsibility of the Leaseholder under this Lease or any other Leaseholder under a similar lease or other premises in the Block (including for the avoidance of doubt) the Common Parts of the Block and the Estate …
(b)
the pipes sewers drains wires cisterns and tanks and other gas electrical drainage ventilation and water apparatus and machinery in under and upon the Block (except such as serve exclusively an individual flat in the Block and except such as belong to British Telecom or any public utility supply authority)
(c)
the Common Parts of the Block and the Estate
5(4) That … so far as practicable the Landlord will keep or procure that the Common Parts are adequately cleaned and lighted…
5(5) That every lease or tenancy of premises in the Block hereby granted by the Landlord shall contain covenants to be observed by the tenant thereof similar to those set out in the First Schedule hereto and (save in the case of any premises which may be let at full or fair rents) shall be substantially in the same form as this Lease”.

14.

The service charge provisions are at clause 7 and include:

7(1) In this Clause the following expressions have the following meanings

…

(b)

“Specified Proportion” means the proportion as specified in the Particulars

(c)

“the Service Provision” means the sum computed in accordance with

subclauses (4), (5) and (6) of this clause

(d)

“the Service Charge” means the Specified Proportion of the Service Provision…

(2)

the Leaseholder HEREBY COVENANTS with the landlord to pay the Service Charge…

(4)

The Service Provision shall consist of a sum comprising –

(a)

the expenditure estimated by the Surveyor as likely to be incurred in the Account Year by the Landlord up on the matters specified in Clause 7(5) together with

(b)

an appropriate amount as a reserve for or towards such of the matter specified in Clause 7(5) as are likely to give rise to expenditure after such Account Year … but

(c)

reduced by any unexpended reserve already made pursuant to sub-clause (b) in respect of any such expenditure as aforesaid.

(5)

The relevant expenditure to be included in the Service Provision shall comprise all expenditure reasonably incurred by the Landlord in connection with the repair management maintenance and provision of services for the Building and shall include (without prejudice to the generality of the foregoing)-

(a)

the costs of and incidental to the performance of the Landlord’s covenants contained in Clauses 5(2) and 5(3) and 5(4)

(b)

the costs of and incidental to compliance by Landlord with every notice regulation or order of any competent local or other authority in respect of the Building (which shall include compliance with all relevant statutory requirements)

(c)

all reasonable fees charges and expenses payable to the Surveyor any solicitor accountant surveyor valuer architect or other person whom the Landlord may from time to time reasonably employ in connection with the management or maintenance of the Building including the computation and collection of rent (but not including fees charges or expenses in connection with the effecting of any letting or sale of any premises) including the cost of preparation or the amount of the Service Charge and if any such work shall be undertaken by an employee of the Landlord then a reasonable allowance for the Landlord for such work

(d)

any rates taxes duties assessments charges impositions and outgoings whatsoever whether parliamentary parochial or local or of any other description assessed charged imposed or payable on or in respect of the whole of the Building or in the whole of any part of the common Parts

(e)

any administrative charges incurred by or on behalf of the Landlord including but not limited to:

(i)

the grant of approvals under this Lease or applications for such approvals

(ii)

the provision of information or documents by or on behalf of the Landlord

(iii)

costs arising from non-payment of a sum due ot the Landlord and/or

(iv)

costs arising in connection with a breach (or alleged breach) of the Lease

(f)

description assessed charged or imposed or payable on or in respect of the whole of the Building or in the whole or any part of the Common Parts

(7)

The Landlord will for the period that any premises in the Building are not let on terms making the tenant liable to pay a Service Charge corresponding to the Service Charge payable under the Lease provided in respect of such premises a sum equal to the total that would be payable by the tenants thereof as aforesaid by way of contribution to the reserve referred to in Clause (7)(4)(b) and the said reserve shall be calculated accordingly

(8)

For the avoidance of doubt it is hereby agreed and declared that the provisions of Section 18 to 30 of the Landlord and Tenant Act 1985 as amended shall apply to the provisions thereof”.

15.

It will be seen that these 22 lessees are required by their leases to pay 1/38 of the service charge, comprising the landlord’s expenditure listed in clause 7(5). That list comprises first, at 7(5)(a), the cost of the landlord’s complying with its covenants in clause 5 (2), (3) and (4), which refer to the insurance, maintenance, repair and decoration of the Block and of the Common Parts of the Block and of the Estate. The remaining items on the list, at 7(5)(b) to (f), refer to expenditure on the Building and on the Common Parts. The term “Building” is not defined in the leases; the parties agree that it should be amended to read “Block” and the FTT made an order to that effect by consent, so I will construe the leases on the basis that that is what they say.

16.

The remaining two leases in Painter House, of flats 9 and 11, are exactly the same except that the lessee is required to pay “a fair proportion” of the service charge. The definitions at the front of these two leases are puzzling, in that the “Estate” is defined as the flat and the “Block” as the whole estate, but it looks as if the two definitions have been transposed. There is no application to vary those muddled definitions.

17.

From what has been said so far, it will be seen that the residents in the flats with the 22 identical leases are each required to pay 1/38 of a service charge calculated by reference to the landlord’s expenditure on Painter House. The lessees of flats 9 and 11 have to pay “a fair proportion” of the same. The effect of the various definitions is that that expenditure comprises the costs of insurance, maintenance, repair and decoration both of the residential flats in Painter House and also the eastern half of the Commercial Unit. It also includes costs relating to the Common Parts both of the Block and of the Estate (the latter perhaps referring to the garden and other land at the back of the Block, but I heard no argument about what “the Common Parts of the Estate” are).