[2024] UKUT 80 (LC)

The FTT has jurisdiction under section 27A of the Landlord and Tenant Act 1985 to decide whether service charges are payable and, if so, to whom, by whom, in what amount, when and how.

One reason why they might not be payable is failure to comply with the requirements of section 18 of the 1985 Act, that costs be reasonably incurred and works of a reasonable standard. Another reason might be failure to comply with section 20, which requires the landlord to pursue a formal consultation process before undertaking work that costs each tenant more than £250; if the landlord fails to do so then the service charge for those works is limited to £250 per tenant.

Section 27A(4) provides:

“(4)

No application under subsection (1) or (3) may be made in respect of a matter which—

(a)

has been agreed or admitted by the tenant…”

Section 27A(4) refers to the tenant’s agreement of “a matter”; thus a tenant who agrees, for example, that he is liable to pay a service charge might still seek challenge the amount charged on the basis that the expenditure was not reasonably incurred or that consultation was not carried out.

Section 22 of the 1985 Act says this:

“(1)

This section applies where a tenant, or the secretary of a recognised tenants' association, has obtained such a summary as is referred to in section 21(1) (summary of relevant costs), whether in pursuance of that section or otherwise.

(2)

The tenant, or the secretary with the consent of the tenant, may within six months of obtaining the summary require the landlord in writing to afford him reasonable facilities—

(a)

for inspecting the accounts, receipts and other documents supporting the summary, and

(b)

for taking copies or extracts from them.”

Section 25 provides that failure to comply with section 22 is a criminal offence, punishable by a fine. Despite that, failure to comply with section 22 has no effect on whether service charges are payable.