Clarissa Yambasu v London Borough of Southwark

For an estimated service charge, the amount payable must be reasonable. A landlord’s chosen outcome must be reasonable, but it need not be the cheapest solution, the best possible solution, or the solution preferred by the tribunal.

Where consultation is required for qualifying works under a qualifying long-term agreement, compliance depends on the applicable requirements of Landlord and Tenant Act 1985 and the relevant consultation schedule. A notice meeting those requirements is sufficient where the tenant makes no observations within the prescribed period.

The appellant held a long lease of a flat served by the respondent local authority’s district heating system. The respondent demanded an estimated service charge for major works to that system.

County Court recovery proceedings were transferred to the First-tier Tribunal (Property Chamber) for determination of the reasonableness and payability of the charge under Landlord and Tenant Act 1985. The FTT held that the consultation requirements had been met and that, after credit for a payment already made, £3,628.78 was payable.

The appellant appealed on consultation, apportionment and the reasonableness of maintaining an antiquated heating system.

1. Appeal dismissed. The FTT’s decision remained in place.

2. The consultation notice was one under Schedule 3 to the Service Charges (Consultation Requirements) (England) Regulations 2003, concerning works under a qualifying long-term agreement. It contained the required information and invited written observations within the relevant period. The appellant made none. The consultation requirements were therefore met. Although the FTT had treated the appellant’s objection as confined to the date of service, any wider challenge to the notice’s contents necessarily failed.

3. The appellant could not introduce at the appeal hearing a new contention that no qualifying long-term agreement existed or that she should have been consulted before its making. That point had not been raised before the FTT or in the grounds of appeal.

4. The FTT had adopted bed-weighting rather than a unit-based apportionment. The Upper Tribunal found that the calculation also included the connected school and Tenant Management Organisation office. The FTT had inadequately explained the calculation and had made a typographical error in one figure, but the final amount of £3,628.78 correctly reflected the charge of £4,205.26 less the appellant’s prior payment.

5. Applying Waaler v Hounslow London Borough Council [2017] EWCA Civ, the relevant outcome had to be reasonable. It did not have to be the least expensive, the best possible, or the tribunal’s preferred solution. The further works reasonably built upon an earlier phased renewal programme; abandoning the system would have wasted that earlier work. There was no evidence that the estimate itself was excessive.

6. The lease gave the respondent an unqualified right to refuse disconnection from the district heating system. Refusal was reasonable because an individual disconnection would burden remaining residents and require further work for which residents would pay.

• Upper Tribunal (Lands Chamber): dismissed the appeal and upheld the FTT’s determination that £3,628.78 was payable.
• First-tier Tribunal (Property Chamber): determined the reasonableness and payability of the disputed estimated service charge after related County Court proceedings had been transferred to it.