Dr Rosh Jamal v London Borough of Enfield

Where a lease requires the landlord to notify the tenant of estimated interim service charges before the financial year begins, the court must construe the lease as a whole to determine whether strict compliance is required. Timing may be of the essence, particularly where late notice would affect only the landlord’s ability to collect interim charges rather than deprive it of all entitlement to recover service charges. A businesslike construction requires adherence to clear contractual machinery; it does not permit flexible adaptation because delay was caused by administrative or technological problems. If timely notice is a condition precedent and the notice is late, the interim charges are not payable, although actual charges may remain recoverable through the balancing process.

Dr Rosh Jamal, the leaseholder of a flat, appealed from a decision of the First-tier Tribunal (Property Chamber) concerning estimated management charges for the 2024 service-charge year. The lease required written notification of the estimated charge before commencement of the financial year, followed by quarterly payments in advance.

The landlord’s notice was sent after 1 April 2024 but before 1 July. The First-tier Tribunal accepted that the lease terms had not been followed but concluded that time was not of the essence and that the charges demanded under the late notice remained payable. The central issue before the Upper Tribunal was whether the timing requirement was essential to the tenant’s liability for interim service charges.

1. Appeal allowed. The requirement in clause 3(2)(b) of the lease to notify the estimated management charge before commencement of the financial year was a condition precedent to liability for the interim charge, and time was of the essence.
2. The court applied the reasoning of Kensquare Ltd v Boakye [2021] EWCA Civ 1725, which was authoritative on the specific issue of timing provisions for interim service charges. Although each lease must be construed on its own terms, the First-tier Tribunal had not identified any feature of this lease that justified a different conclusion.
3. The distinction between interim and final service charges was material. Strict timing was more readily intended for interim charges because late notice would restrict the landlord’s ability to collect payments in advance, while leaving the landlord able to recover actual charges after the end of the year.
4. The requirement that the tenant pay the management charge at the times and in the manner specifically stated in the lease reinforced the importance of the notification date. The landlord’s practice of complying in previous years and its failure in 2024 because of software problems supported the conclusion that the delay was accidental, but those circumstances could not alter the proper construction of the lease.
5. The references to London Borough of Southwark v Akhtar and Stel LLC [2017] UKUT 150 (LC) and London Borough of Southwark v Woelke [2013] UKUT 0349 did not assist the landlord. Both leases expressly provided that time was not of the essence, so those decisions did not determine the issue arising under this lease. A businesslike construction meant compliance with clear contractual provisions, not flexibility in response to practical difficulties.
6. The late notice did not make the estimated service charges payable in advance. The tenant remained liable for the actual service charges after the end of the relevant year.

• Upper Tribunal (Lands Chamber): The appeal from the First-tier Tribunal was allowed. The Upper Tribunal held that time was of the essence in the lease’s requirement for advance notification of estimated service charges.
• First-tier Tribunal (Property Chamber): The Tribunal had held that the late notice was effective and that the estimated service charges were payable.