Quadron Investments Limited v Patrick Philpotts & Anor

Whether a residential service charge is payable depends on the payment machinery agreed in the lease. A demand may be made at a different time where the lease permits, but it must still claim payment through the contractual mechanism. Where contributions fall due by half-yearly instalments, treating them as separate sums payable immediately does not create liability under that clause. The leaseholder need not reconstruct or recast the demand. Failure to meet the lease’s minimum requirements may defeat liability, although a compliant demand may be made later.

The respondents were leaseholders of two flats under 125-year leases dating from 1991. Their landlord, Quadron Investments Limited, demanded sums for internal repairs and decorations, major works, and external emergency works. Clause 4(b) required each leaseholder to contribute a sixth share of specified costs by half-yearly instalments due on 25 December and 24 June.

The respondents challenged payability under section 27A of the Landlord and Tenant Act 1985. The First-tier Tribunal (Property Chamber), by a decision dated 6 November 2025, found the charges were not payable because they had not been demanded in accordance with the leases. It granted permission to appeal on 12 November 2025. The central issue was whether demands treated as immediately payable could create liability under a clause requiring payment through half-yearly instalments.

The appeal was dismissed. The First-tier Tribunal was entitled to find that the interim charges had not been rendered payable under the leases.

1. Construction and contractual requirements. Whether a service charge demand creates liability is a question of construction of the lease. Applying Arnold v Britton [2015] UKSC 36, clause 4(b) required contributions to be paid by half-yearly instalments. The approach in Southwark LBC v Woelke [2013] UKUT 349 (LC) required identifying the minimum contractual requirements for liability and comparing them with the demand and circumstances.
2. Effect of the demands. A demand did not have to be issued on 24 June or 25 December. But it had to seek payment under clause 4(b). Quadron treated the sums as separate liabilities payable immediately rather than as contributions due under the half-yearly machinery. The leaseholders were not required to reconstruct or recast those demands. The demand of 3 March 2022 also preceded the expenditure, which the lease did not permit.
3. Ad hoc charges and rent. The leases made no express provision for ad hoc or interim service charges. A term authorising such charges would not readily be implied, and there was no basis to imply one in this case: Daiches v Bluelake Investments (1985) 17 H.L.R. 543. Rules about demanding rent did not assist because the rent and service-charge provisions were separate and different.
4. Disposition. The demands did not create liability under clause 4(b). That did not prevent effective demands being made later, but none had been made. The appeal was dismissed.

• Upper Tribunal (Lands Chamber) — dismissed the appeal: [2026] UKUT 229 (LC) .
• First-tier Tribunal (Property Chamber) — by a decision dated 6 November 2025, determined that the three interim charges were not payable because they had not been demanded in accordance with the leases. Permission to appeal was granted on 12 November 2025 (case references LON/00BG/LSC/2024/0228 and LON/00BG/LSC/2023/0435).