[2024] UKUT 120 (LC)

But that is to jump ahead. The next milestone on the journey is the Supreme Court’s decision in Aviva. The leaseholders in that case were required by their leases to pay:

“your share of building services costs is 0.7135% or such part as the Landlord may otherwise reasonably determine.”

Earlier decisions about the apportionment of service charges had led to a position where any provision in a lease for the landlord to make a final determination about the apportionment of service charges was void and that instead the apportionment fell to be made by the FTT in its jurisdiction under section 27A of the Landlord and Tenant Act 1985. The Supreme Court in Aviva put an end to that approach. Lord Briggs said at paragraph 15:

“If the landlord's discretionary decision in question was unaffected by the statutory regime and fell within the landlord's contractual powers under the lease, then there might at the most be a jurisdiction to review it for rationality: see Braganza [2015] UKSC 17.”

It is clear following the decision in Aviva that where a lease confers on a landlord an unqualified discretion then that provision is not void; the landlord is free to exercise it and the only test to be applied by the FTT is one of rationality.