Ian Jonathan Rose v Bracknell Gate Properties Limited

A lease providing for service-charge payments on account on the usual quarter days permits one annual sum payable by quarterly instalments, unless clear language provides for a fresh demand each quarter. The statutory consultation requirements under section 20 of the Landlord and Tenant Act 1985 concern physical works on a building. They do not extend to separate professional services associated with those works, such as design, specification, consultation administration or liaison. The statutory scheme and regulations may be considered together when interpreting the Act. The requirements apply to the works, not merely to costs which may form part of the service charge.

The tenant appealed against a revised decision of the First-tier Tribunal dated 30 October 2024. The FTT had held him liable for a £14,406.85 demand made during the 2023–2024 service-charge year for major electrical works and associated professional fees.

The appeal concerned whether the lease permitted a further one-off demand during the year, and whether professional fees incurred for design, specification and management of the works were subject to the consultation requirements under section 20 of the Landlord and Tenant Act 1985. Permission was granted on those two grounds.

1. Ground 4 allowed. Clause 1(e) of the lease permitted only one annual demand for a sum on account of service charge, payable by instalments on the usual quarter days. The clause referred to a singular sum and payment, operated within annual service-charge accounting machinery, and did not clearly authorise a fresh and different sum at each quarter day. The December Demand was therefore not payable.
2. The construction was reached by applying the ordinary principles stated in Arnold v Britton. The clause’s natural language, its context within the annual certificate and balancing-payment machinery, its purpose, and commercial common sense all supported the tenant’s construction. This did not involve implying words or applying a special rule to service-charge clauses.
3. Ground 3 rejected. “Works on a building” in section 20ZA(2) of the Landlord and Tenant Act 1985 means physical works carried out on the building. Separate professional services associated with those works are not themselves qualifying works. The analysis in Marionette Limited v Visible Information Packaged Systems Limited applied to the amended statutory provisions.
4. The structure of the Service Charges (Consultation Requirements) (England) Regulations 2003 supported that interpretation. Requiring separate consultations for design, specifications, supervision and the consultation process itself would create serious practical difficulties and increase tenants’ costs. The Regulations were a proper interpretative aid because they formed part of the same statutory scheme.
5. The purpose of sections 19 to 20ZA was to protect tenants from paying for unnecessary or substandard services and from paying more than they should for necessary services of acceptable quality. That purpose did not require professional fees to be treated as qualifying works. Whether such fees could constitute relevant costs under section 20 was a separate question from whether the services were works on a building.
6. The FTT had given adequate reasons for its conclusion on Ground 3. The appeal was allowed on Ground 4, and the Tribunal determined that the December Demand was not payable. The question of an order under section 20C was reserved for determination on written submissions.

• Upper Tribunal (Lands Chamber): appeal allowed on the contractual construction ground; the FTT’s decision was upheld on the statutory consultation ground. The December Demand was held not payable.
• First-tier Tribunal (Property Chamber): by a decision revised on review on 30 October 2024, held the tenant liable for the December Demand and rejected his arguments on construction, reasonableness and consultation.