David Webber v Rasheeda Syed

Payment of service charges does not, without more, amount to an agreement or admission barring a determination under Landlord and Tenant Act 1985, section 27A. Whether agreement should be inferred requires an evaluation of all the circumstances. Continued protests while paying negate such an inference.

In determining whether insurance costs were reasonably incurred under section 19, the tribunal must assess the outcome as well as the landlord’s process. Legitimate failures to provide policy documents do not, without evidence that the cover or premium was unreasonable, justify disallowing the whole premium. A tribunal should decide the issues raised fairly and give adequate reasons before reducing documented service-charge expenditure.

The landlord appealed from the First-tier Tribunal’s decision of 19 March 2024, which reduced the service charges payable by his leaseholder for nine service-charge years.

The appeal concerned four matters: whether the leaseholder had agreed the charges by paying them; insurance premiums; electricity costs for common parts; and maintenance and fire-alarm expenditure for 2020/21. The landlord contended that the tribunal had wrongly treated sums as irrecoverable, disallowed insurance premiums in full, and reduced unchallenged charges despite the supporting material.

The central issues were whether the First-tier Tribunal had erred in its treatment of agreement under section 27A and in its assessment of the reasonableness and evidential support for the disputed service charges.

1. Appeal allowed in part. Ground 1 was dismissed. Grounds 2, 3 and 4 were allowed, increasing the leaseholder’s liability by £1,912.16.

2. The First-tier Tribunal was entitled to find that the leaseholder had not agreed or admitted the charges. Under section 27A(5) of the Landlord and Tenant Act 1985, payment alone is insufficient. The evidence supported its finding that she continued to protest while paying, including in the face of threatened forfeiture. Whether agreement is to be inferred is an evaluative assessment of all the circumstances. An appellate tribunal should not conduct that assessment afresh absent a demonstrated fundamental error.

3. The full disallowance of insurance premiums was erroneous. Applying Waaler v London Borough of Hounslow [2012] EWCA Civ 45, whether costs were reasonably incurred concerns outcome as well as process. The building was insured with a reputable insurer, the premiums were not challenged as excessive, and there was no evidence that the reinstatement sums or cover were inadequate. Failures to provide the policy and certificates were legitimate complaints, but did not establish that any part of the premiums was unreasonably incurred under section 19(1)(a).

4. The First-tier Tribunal also erred by reducing electricity and maintenance charges without a pleaded challenge to their amount, without giving the landlord fair notice that detailed reconciliation would be required, and without properly considering the invoices and bank statements. Those materials supported the sums claimed, including the omitted maintenance expenditure in 2020/21.

5. The tribunal had also miscalculated the 18-month period in section 20B. The revised insurance, electricity and maintenance charges were allowed. The landlord could seek reimbursement of appeal fees, subject to the leaseholder’s submissions.

• Upper Tribunal (Lands Chamber): Allowed the landlord’s appeal in part, increasing the service charges payable by £1,912.16.
• First-tier Tribunal (Property Chamber): On 19 March 2024, reduced the leaseholder’s service-charge liability for 2014/15 to 2022/23 from £8,594.69 paid to £3,450.54.