Thirty One Crescent Grove Limited v Sven Atherden

A tenant who has agreed that the absence of formal consultation is not an issue cannot invoke that absence to challenge a service charge. It is a matter agreed for the purposes of section 27A(4) of the Landlord and Tenant Act 1985, and the tribunal has no jurisdiction to determine it.

A cost paid by an individual leaseholder is not a service-charge cost unless it was incurred by, or with authority from, the landlord. In a tenant-owned corporate landlord, informal decision-making may be effective, but email silence does not establish majority approval or a recorded abstention. A bare assertion in a schedule is also insufficient to put the reasonableness of a charge in issue.

The freeholder was a company owned by the leaseholders of six flats. The respondent leaseholder challenged service charges before the First-tier Tribunal (“FTT”).

The FTT limited his liability for stairwell redecoration to £250 because it found that the landlord had not consulted under section 20 of the Landlord and Tenant Act 1985. It also held that £600 paid by the respondent for roof work should be shared through the service charge.

The landlord appealed both determinations. The issues were whether the respondent had agreed the absence of formal consultation, and whether roof expenditure commissioned and paid by him had been incurred by or on behalf of the landlord.

1. Appeal allowed. The FTT’s determination limiting the respondent’s liability for the stairwell work to £250 was set aside. His proportion of the £3,880 cost was payable.

2. Section 27A(4) of the Landlord and Tenant Act 1985 prevents an application concerning a matter agreed or admitted by the tenant. Although the respondent had not expressly accepted the total price, he was content for the work to proceed, had sought the more expensive paint, and had not raised consultation as a ground of challenge. The absence of the formal consultation required by section 20 was therefore a matter agreed. The FTT introduced and decided that issue without jurisdiction.

3. The landlord’s shortcomings in supplying supporting information did not determine payability. Nor did the respondent put the reasonableness of the stairwell expenditure in issue: the bare assertion in the Scott Schedule, without any stated basis, was insufficient.

4. The FTT’s decision on the roof work was irrational and was set aside. A service charge may reimburse expenditure incurred by or on behalf of the landlord. The landlord company could have authorised the respondent to commission and pay for the work, but it did not do so. The email discussion showed support from only one other shareholder. The silence of the remaining shareholders did not establish a majority or formal abstention. The £600 was consequently unilateral expenditure, not expenditure of the landlord, and could not be recovered through the service charge.

• Upper Tribunal (Lands Chamber): Allowed the landlord’s appeal and set aside both challenged parts of the FTT decision: [2024] UKUT 80 (LC).
• First-tier Tribunal (Property Chamber): In May 2023, limited the stairwell charge to £250 for want of section 20 consultation and directed that the respondent’s £600 roof expenditure be apportioned through the service charge.