[2025] UKUT 369 (LC)

As the FTT struck Mr Barton’s application out without determining it, it made no findings of fact, but the relevant facts are not in dispute.

Mr Barton occupies his flat at 52 Victoria Court in Matlock under a written tenancy agreement in the model form published by the National Housing Federation for use by registered providers of social housing. The agreement commenced on 21 September 2020 and begins by recording that Platform is a registered community benefit society and is registered with the Social Housing Regulator as a non-profit provider of social housing. It creates a monthly periodic assured non-shorthold tenancy within the meaning of the Housing Act 1988.

The relevant parts of the agreement are found in clause 1, in a section headed “General Terms”, and provide:

The services which Platform agrees to provide are listed in Schedule 1 to the agreement, which is mentioned in clause 1(3)(i). Each service is listed and a cost is provided for each entry in the list. In aggregate, these equal the original monthly service charge of £95.94.

The most important features of the service charge are that it is fixed for the whole year at whatever figure Platform has specified in a notice given under clause 1(4)(i) and 1(4)(iii). The agreement does not prescribe how the service charge is to be calculated and neither defines nor limits the matters which Platform may take into account in setting the charge. Nor does the agreement include any mechanism for calculating the amount of any surplus or shortfall between the charges collected and the costs incurred by Platform in providing the service. No balancing charge is payable by Mr Barton to cover any shortfall and no credit or repayment is due to him if the services costs less than the sums collected (although in October 2023, after renegotiating its energy supply arrangements, Platform applied a credit to its tenants’ accounts).

Platform provided a statement explaining to the FTT how the service charge is set, in which it said this:

“9.

Platform operate the service charge in line with the Tenancy Agreement and it is operated as a fixed service charge. The service charge is only increased once a year, in April (at the same time as the rent is increased). When considering the increase to be applied to the service charge each year, Platform considers a combination of factors; any costs which are expected to fall due under a contract Platform has already entered into (for example in relation to employment contracts or utilities agreements); estimated costs on budgets drawn up for services to be provided by Platform; and any possible repairs that might be required, which are usually calculated on a three-year average.

10.

Taking into account these factors and anything else which might be relevant for that particular year, Platform will come to a figure by which the service charges are to be increased. Mr Barton is notified of the rent and service charge figure he is required to pay in accordance with the terms of the Tenancy Agreement and using the appropriate notices, and that will be the figure for the entire year, regardless of the actual costs which Platform end up spending in providing the services. There is no reconciliation process carried out at the end of the year and Mr Barton is not required to pay any more than the fixed amount if the costs were higher than the fixed charge, nor is he entitled to a credit where costs were lower than the fixed charge. The effect of this is that the service charge does not vary according to the actual costs incurred by the landlord.”