[2025] UKUT 160 (LC)

Brambridge House is a Grade 2* listed Georgian country house divided into 14 flats. It comprises a main house and a separate north wing. Flat 2 is in the north wing; the flat is described in the appellants’ lease as being on two floors and “adjacent to the Building” (clause 1 of the lease), and separated from the Building by a party wall (clause 7(a)). Access to all the flats except Flat 2 is via a main entrance, but Flat 2 has its own separate entrance with steps at the front and an external staircase at the back (paragraph 9 of the FTT’s decision).

The lease of Flat 2 was granted in March 1971, for a term of 99 years. The appellants purchased it in December 2020. The respondent purchased the freehold in 2018. The appellants applied to the FTT for a determination of their liability to pay service charges in respect of the common parts inside the main building, which the respondent has demanded from them but previous freeholders did not. The appellants say that their lease does not make them liable for such charges. As well as providing a copy of their own lease the appellants have set out clauses from the lease of Flat 3, which is in the main building and was granted in 1966, in order to demonstrate the difference between the service charge arrangements for flats in the main building, whose leaseholders have access to the common parts and have to pay for their upkeep, and the arrangements for Flat 2 which has neither access to nor liability for the common parts.

The lease of Flat 2 begins with the following recital:

“The Lessor is the owner in fee simple of the property known as Brambridge House … (hereinafter called “the Building”) garages and the gardens and the grounds thereof (all which premises are hereinafter referred to as “the Mansion”).

The lease goes on to demise Flat 2, together with the easements set out in the Second Schedule. They include the right to pass with or without vehicles along the drive, to park, to use the garden, to lateral support from “other parts of the Mansion”, to the passage of water, sewage and electricity through the Mansion, and to enter “other parts of the Mansion” in order to repair and maintain Flat 2. The corresponding schedule in the 1966 lease of Flat 3 also grants the right to pass and repass on foot “over and along the main entrances of the Mansion and the passages landings and staircases leading the Flat”; thus Flat 3 has access to the common parts of the main building and Flat 2 does not.

The lease reserves a rent, of £10 per annum, and requires the lessee to pay the cost of the Lessor insuring Flat 2 against fire and other risks. Clause 3 sets out the lessee’s covenants including:

“3(b) To pay all rates taxes assessments charges impositions and outgoings which may at any time during the said term be assessed charged or imposed upon the Flat or the owner or occupier in respect thereof …”

Clause 4 requires the lessee to keep Flat 2 in repair, and to:

“… pay one equal thirteenth part (but with a minimum of Fifty pounds per annum) of the costs expenses outgoings and matter mentioned in the Fourth Schedule hereto and of an amount required to provide a reasonable reserve fund.”

The Lessor’s obligations are set out in Clause 5; they include covenants to insure the Mansion against fire etc, to maintain the pipes, drains, electric cables and wires and the boundary walls and fences of the Mansion, and to decorate the exterior of “the Mansion but not the Flat”. By contrast, the corresponding clause in the lease of Flat 3 requires the Lessor to insure the Building, rather than the Mansion, against fire etc, and includes additional obligations to maintain and repair the Mansion and “the main entrances, passages, landings and staircases enjoyed or used by the Lessee in common as aforesaid” and to keep those common parts “reasonably lighted” and the forecourt and gardens in good condition.

As noted above the Fourth Schedule sets out the costs of which the lessee is to pay one thirteenth of the cost. Here is the Fourth Schedule from the lease of Flat 2:

“1.

The expenses of maintaining repairing and renewing (a) the water pipes drains and electric cables and wires in under or upon the Mansion and enjoyed by the Lessee in common with the owners and lessees of the other Flats and (b) the boundary walls and fences of the Mansion

2.

The cost of keeping the forecourt garden way and other parts of the Mansion in good condition and (as to the garden) cultivation

3.

All rates taxes and outgoings (if any) payable in respect of the forecourt garden way and other parts of the Mansion

4.

The cost of insurance against third party risks in respect of the Mansion if such insurance shall in fact be taken out by the Lessor

5.

The wages of the gardener and any other servants from time to time employed by the Lessor in connection with the running and maintenance of the Mansion

6.[an administration charge of ten percent in respect of all the costs listed in the schedule]

7.

In this Schedule the word “Mansion” shall exclude the garages.”

The exclusion of the garages from the definition of the Mansion is explained by the fact that the garages were demised with some of the flats (although not with Flat 2) and therefore their upkeep was the responsibility of the individual lessee.

The Fourth Schedule of the lease of Flat 3 is includes all the above provisions and in addition:

The FTT described the lease of Flat 2 as “old and poorly drafted” but I would say it does rather a good job of ensuring that the lessee of Flat 2 gets a different deal from that offered to the lessees in the main building, of which Flat 3 is an example. Flat 2 has its own entrance and does not need access to the common parts, and so the provisions for it to have access to the main entrance, passages and stairs inside the main house, and for it to contribute to their upkeep, are absent from the lease of Flat 2. Flat 2 does not have to contribute to the maintenance and repair of the Mansion; nor does the freeholder have to maintain and repair the structure and exterior of Flat 2.