[2025] UKUT 133 (LC)

Section 27A of the Landlord and Tenant Act 1985 gives the FTT jurisdiction to decide whether a service charge under a lease is payable and, if so, in what amount. Section 19 of the 1985 Act says this:

“1)

Relevant costs shall be taken into account in determining the amount of a service charge payable for a period—

(a)

only to the extent that they are reasonably incurred, and

(b)

where they are incurred on the provision of services or the carrying out of works, only if the services or works are of a reasonable standard;

 and the amount payable shall be limited accordingly.

(2)

Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise.”

Sub-sections (1) and (2) thus differentiate between a charge payable in respect of costs incurred, and a charge payable before the costs are incurred. The service charge demand challenged in these proceedings fell into the latter category, and therefore the question before the FTT was whether the amount payable was reasonable.