[2025] UKUT 56 (LC)

The thirty two respondents listed in the schedule to this decision are all assured tenants of flats in either Endeavour House or Mayflower House in East London. The appellant, Notting Hill Genesis (NHG), is a housing association and is the respondents’ landlord. NHG holds long leases of the two buildings granted to it by the freeholder Celtic Motors (C.M.) Ltd.

By a decision issued on 19 April 2024 the First-tier Tribunal (Property Chamber) (the FTT) determined that, with the exception of two categories of charges, sums charged to the respondents by NHG and its predecessors for services provided between 2016 and 2023 were payable under the terms of the respondents’ tenancy agreements. But the FTT found that none of the respondents were liable to contribute towards the cost of services supplied by the freeholder (which NHG is liable to pay under its own headlease), and that some of them were not liable to contribute towards the costs of lift maintenance and servicing undertaken by NHG.

The issues of liability turned on the meaning of labels applied to different categories of expenditure in the respondents’ tenancy agreement. The agreements were in different forms, but in each case the standard printed form was designed to have a list of services attached to it for which the tenant was to pay a charge. NHG does not have complete copies of all the agreements, but most of those which it does hold have schedules of charges in two different forms, one containing a typed or printed list of services, the other including a screenshot of a list from an accounting software package. NHG’s primary case before the FTT, which it rejected, was that the cost of services provided by the freeholder could be recouped either as a “management fee” (a term used in the printed schedule) or under the heading “PSCTP” (an acronym used in the screenshot). The FTT also found that, where the printed schedule was used, NHG was not entitled to recoup the costs of lift maintenance and servicing under the heading of “daily building fabric”.

The sums involved in the appeal are substantial. Since 2016 the cost of services supplied by the freeholder has represented two-thirds or more of the service charges paid by the respondents, and over the seven year period in question NHG had sought to collect more than £870,000 from its tenants of 104 flats in the buildings to meet those costs. The charges for lift maintenance were much smaller, but the effect of the FTT’s decision was that some tenants were liable to pay them, while others in the same building were not.

The FTT granted NHG permission to appeal. At the hearing of the appeal NHG was represented by Ms Tina Conlan, and the respondents were represented by Mr Robert Bowker, both of whom had appeared before the FTT. I am grateful to them both for their assistance.