[2024] UKUT 175 (LC)

St David’s Square was built between 1998 and 2003. It comprises 436 long-leasehold flats in large blocks and 40 freehold houses in two terraces along the northern and eastern edges of the estate. FIT Nominee Limited and FIT Nominee 2 Limited together own the freehold, and have done so since 2014.

St David’s Square was the setting for a recent decision of this tribunal, Patel and others v Spender and others [2024] UKUT 62 (LC), on an application under section 84 of the Law of Property Act 1925 for the modification of covenants burdening some of the freehold houses. I visited the development in connection with that application. The freeholders and 104 of the leaseholders were the successful objectors in those proceedings.

The estate is rectangular and is bordered by the river to the south. There are estate roads, gardens and some communal facilities including a gym. The leases are in unsurprising form and I have been provided with a copy of the lease of one of the flats by way of sample. It is bi-partite, between landlord and tenant only. It sets out the landlord’s obligations, including the insurance of the estate, and requires the leaseholder to pay a service charge to reimburse the landlord’s expenditure. There is no dispute between the parties about the terms of the lease. The estate is run by a managing agent for the freeholders, FirstPort Bespoke Property Services Limited (“FirstPort”).

The leaseholders applied to the FTT for a determination as to whether certain service charges demanded in respect of 2018, 2019 and 2020 were payable.

The FTT’s jurisdiction to make that determination arises from section 27A of the Landlord and Tenant Act 1985, which enables it to decide whether a charge is payable and, if so, in what amount, to whom, when and how it is payable. One reason why it might not be payable is that the cost which it reimburses was not reasonably incurred; section 19 of the 1985 Act says this:

As I said above, only two of the charges about which the FTT was asked to make a decision are relevant to this appeal, and it will be convenient for me to explain what the FTT decided, and to decide the appeal, in relation to each of those two charges separately.

The sum in issue here is less than £5 for each leaseholder, in total, for the three years in dispute; Mr Spender described it as an issue of principle.