[2025] UKUT 174 (LC)

The appellant holds a long lease of Flat 2, Chandos Court. The respondent acquired the freehold of the block of eight flats in 2018. Applications were made to the FTT by the appellants and by the leaseholders of Flats 6 and 7 for determinations under section 27A of the 1985 Act in relation to the service charges over several years from 2019/20 onwards, and were heard together by the FTT in May 2024. With those three applications the FTT also made a determination arising from proceedings brought in the county court by the respondent against the appellant in respect of certain unpaid service charges and associated costs; in May 2023 the county court transferred to the FTT the issue of whether the charges were payable, pursuant to section 176A of the Commonhold and Leasehold Reform Act 2002. Accordingly there were four different matters before the FTT and a large number of service charges in issue spanning several years. The FTT gave its usual directions for the parties to provide a Scott Schedule setting out the charges in dispute with the tenant’s comments and the landlord’s response, which they did.

The FTT’s decision is at first sight alarmingly long, at 107 pages; on further reading it could be described as alarmingly short in the sense that the narrative decision extends to eight pages but is concerned largely with procedural issues and does not address either party’s arguments about the individual charges in issue. However, the rest of the decision consists of the Scott Schedule, with each party’s comments and then a final column with the FTT’s response. That may be a good way to deal with a long list of issues, provided that it does not distract the FTT from engaging properly with a party’s arguments – which is what seems to have happened here.

The appellant has sought permission to appeal the FTT’s determination as to just one of the service charges in dispute, namely insurance costs, which feature in the Scott Schedule three times and were allowed by the FTT in full, as follows:

The tenant’s comments on the Schedule explain that the insurance for the building obtained by the previous landlord in 2017/18 was £1,631. In 2018/19 when the respondent took over it jumped to £2,704.20, and then to £3,803 in 2019/20. As can be seen above, it rose again in the tow further years complained of. The tenant’s arguments that this was unreasonable were:

The respondent appears to have made no comment about the 2019/20 charge; as to the 2022 charge it simply said that the quote was not “like for like”, without elaborating. As to the 2023/24 the respondent said that the challenge was “not clear”, that there had been a change of broker resulting in savings for the leaseholders, and that the contents insurance was taken over from the previous freeholder and has been on the policy every year. Why that would justify it was not explained.

The FTT’s comments in response to each of the three charges were very brief: the FTT observed that the respondent was able to use the insurer or its chose, and that although the cost of insurance was not the cheapest the appellant had “failed to provide any persuasive evidence showing that this charge had been unreasonably incurred.”