Notting Hill Genesis v Helal Uddin & Ors

A tenant’s liability for a variable service charge depends on the proper construction of the tenancy agreement. There is no presumption that every cost which a landlord is obliged to incur may be recovered through the service charge.

An unambiguous agreement to pay a management fee cannot later be expanded by a course of dealing to cover unrelated estate services. Conversely, where a service-charge label or schedule is genuinely ambiguous or missing, evidence of the services costed when the tenancy was granted may establish the original bargain. Later dealings are evidential only; they do not create or vary liability.

An ambiguous reference to daily building fabric was capable of including lift servicing and maintenance.

The respondents were assured tenants of flats in two blocks held by their landlord, Notting Hill Genesis, under long leases. They applied to the First-tier Tribunal under section 27A of the Landlord and Tenant Act 1987 concerning service charges demanded between 2016 and 2023.

The First-tier Tribunal decided that the tenants were not liable for services supplied by the freeholder, and that tenants with a printed service-charge schedule were not liable for lift maintenance. The landlord appealed on those two issues.

The appeal concerned whether the expressions Management Fee, PSCTP, and daily building fabric, and the absence of schedules from some agreements, created liability for the disputed services.

1. The appeal was allowed in part. The appeal concerning freeholder-supplied services was dismissed, but the appeal concerning lift maintenance was allowed.

2. There was no presumption that every cost which the landlord was obliged to incur under its headlease could be passed to assured tenants as a service charge. Liability depended on the agreement’s meaning. Read in its contractual setting, Management Fee meant a charge for managerial services, not a broad category covering the freeholder’s estate and block services. The printed schedule therefore did not make those costs recoverable.

3. The acronym PSCTP was ambiguous. For tenants whose agreements contained that screenshot, and for agreements with blank or ineffective schedules, evidence could identify the services costed into the original charge. The tenants were liable only for services included in that original calculation. A later course of dealing was relevant as evidence of the original intention, but could not vary an unambiguous agreement or introduce new services.

4. For the disputed period, however, the First-tier Tribunal’s separate and unchallenged finding remained decisive. Notting Hill Genesis had not supplied a costed breakdown sufficient to show that the freeholder’s charges were reasonably incurred or reasonable in amount. That finding bound the landlord for 2016 to 2023, so no remittal was required.

5. Daily building fabric was of uncertain breadth and was capable of including lift maintenance. The consistent charging of lift maintenance, coupled with the absence of any suggestion that it was a later addition, supported the inference that it formed part of the original bargain. The Tribunal substituted a determination that tenants with the printed schedule were liable for reasonable lift servicing and maintenance charges.

• Upper Tribunal (Lands Chamber): Allowed the landlord’s appeal concerning lift maintenance, but dismissed its appeal concerning liability for freeholder-supplied services.
• First-tier Tribunal (Property Chamber): By a decision issued on 19 April 2024, determined that freeholder-supplied service charges were not payable and that tenants with the printed schedule were not liable for lift maintenance.