[2024] UKUT 120 (LC)

Fecha: 15-May-2024

10: (a) to pay to the Landlord within seven days of demand the Residential Service Charge Proportion of

10: (a) to pay to the Landlord within seven days of demand the Residential Service Charge Proportion of:

(i)

Such of the costs charges and expenses which the Landlord shall incur in complying with its obligations set out in Part I of the Sixth Schedule hereto which the Landlord (acting reasonably) designated as being a Residential Service Charge Item

(ii)

The costs charges and expenses which the Landlord shall incur in doing any works or things to those parts of the Building utilised by the residential flat owners and/or occupiers for the maintenance and/or improvement thereof and

(iii)

Any other costs charges or expenses incurred by the Landlord which the Landlord designates as a Residential Service Charge Item

(b)

to pay to the Landlord within seven days of demand the Building Service Charge Proportion of:

(i)

(ii)

The costs charges and expenses which the Landlord shall incur in doing any works or things to the parts of the Building for the maintenance and/or improvement of the Building and

(iii)

Any other costs charges or expenses which the Landlord designates as a Building Service Charge Item”.

89.

Mr Morris pointed out that there are two different decisions to be made by the landlord under the foregoing clauses. The first is to decide which costs are to be Residential Service Charge Items and which are to be Building Service Charge Items. That decision is to be made “acting reasonably”. The second is to apportion that item among the residential lessees in order to derive the Residential service Charge Proportion. That proportion has to be “fair”. There is no requirement of fairness attached to the first decision, the allocation to the residential service charges. The appellants’ challenge was not to the second decision but to the first.

90.

In view of that, he argued the FTT’s decision was correct.

91.

As to grounds 3 and 4, Mr Morris argued that the lease in describing the common parts anticipated that the leaseholder would share the use of the gym with others; they had ample rights to use the gym (which they could, if they chose, enforce against the gym tenant); and the landlord was under no duty to act reasonably in granting the gym lease – which in any event was not this respondent’s decision but that of its predecessor in title.