ASP Independent Living Limited v Jean Barbara Godfrey

An agreement is a qualifying long-term agreement only where it must continue beyond one year, so that termination before the year has elapsed would be a breach of contract. An intention to renew, or an agreement described as annual, is insufficient if the contractual obligation does not extend beyond the first year.

A charge exceeding £250 does not, by itself, trigger consultation. The statutory conditions for qualifying works or a qualifying long-term agreement must be met. A service-charge determination must explain the contractual basis, the statutory analysis and the reasoning supporting any assessment of reasonableness.

The lessee of a flat in a managed residential complex challenged the reasonableness and payability of service charges for a warden and gardening services. The First-tier Tribunal limited the recoverable charges, treating consultation requirements as relevant, but its reasoning was internally inconsistent and did not clearly identify the governing agreements or the legal basis for the limits imposed.

The landlord appealed on the issues for which permission had been granted. The central questions were whether the relevant arrangements were qualifying long-term agreements or involved qualifying works, whether consultation was required, and whether the charges were reasonably incurred.

1. Appeal allowed in part and matters remitted. The FTT’s decisions concerning the warden charges for 2019/20 and 2020/21, and the gardening charge for 2019/20, were set aside and remitted for fresh decisions. There was insufficient material for the Upper Tribunal to substitute its own determinations.
2. The April warden agreement was ambiguous, but the critical question was whether it was contractually bound to continue beyond 365 days. A reference to renewal, or an intention that services should continue, does not establish a qualifying long-term agreement where the landlord could terminate after 364 days. The FTT had to identify which agreement governed each period and explain whether it was a qualifying long-term agreement.
3. The FTT’s reasoning was incoherent. It gave no adequate explanation for treating £250 as reasonable, for treating the later schedule as a superseding agreement, or for applying the same limit despite concluding that the earlier agreement was not a qualifying long-term agreement. The statutory limit for an unconsulted qualifying long-term agreement was £100, not £250.
4. The gardening decision was also unexplained. A charge exceeding £250 does not itself amount to qualifying works or trigger consultation. The FTT had to identify a qualifying set of works within section 20ZA(2) of the Landlord and Tenant Act 1985. If consultation was required, it also had to consider the landlord’s application for dispensation.
5. On remittal, the FTT must first consider whether the lessee has produced sufficient evidence to challenge reasonableness; she cannot simply put the landlord to proof. It must then decide reasonableness on the evidence. A price increase, the lessee’s financial circumstances, or absence of consultation where the statutory conditions are not met does not, alone, establish that a charge is unreasonable.

• Upper Tribunal (Lands Chamber): appeals concerning the warden charges for 2019/20 and 2020/21 and the gardening charge for 2019/20 allowed to the extent that those decisions were set aside and remitted for fresh determination.
• First-tier Tribunal (Property Chamber): determined the reasonableness and payability of various service charges, including the challenged warden and gardening charges. Its amended decision was the subject of the appeal.