[2024] UKUT 63 (LC)

Fitzroy Place (the Estate) is located on the site of the former Middlesex Hospital north of Oxford Street in Central London. It is a mixed development comprising six blocks. Two of these are wholly commercial, comprising offices on upper floors with shops and restaurants on the ground floor. The remaining blocks are wholly residential and contain 235 private flats and 54 flats allocated as affordable housing which are demised to Octavia Housing Association (of which 14 have been sublet on shared ownership leases). Communal facilities including meeting rooms, a lounge, a cinema and a gym are located in a residents’ amenity area with a concierge service. The development also accommodates a school, a health centre and basement car parking and storage units.

The Estate occupies the whole of a city block and is arranged around a pedestrianised central square accessible to the public. In the middle of the square the former hospital chapel (a late Victorian masterpiece) now provides an exhibition and event space which is separately managed by an independent community trust.

For some time there have been disagreements between the residential leaseholders and the appellants concerning the apportionment of service charges and the liability of the leaseholders to contribute to certain heads of expenditure. To resolve those disagreements the appellants made two applications to the FTT in October 2021 seeking a determination under section 27A, Landlord and Tenant Act 1985 of the service charges payable by all residential leaseholders. County Court proceedings in respect of disputed service charges had already been commenced against the fourth respondent in 2020, and aspects of those proceedings were eventually transferred to the FTT for its determination.

Issues common to all three proceedings were determined by the FTT in a decision published on 9 March 2023. The FTT decided to deal first with the interpretation of the Lease and other issues concerning the “payability” of charges, before addressing issues of quantum and accounting at a later hearing.