Mare Street Ltd v Theowal Limited

For an application under section 27A of the Landlord and Tenant Act 1985, whether premises are dwellings is assessed for the period to which the service-charge determination relates. A lease’s description of its subject matter as airspace does not settle whether a dwelling exists; physical completion and capacity for occupation matter.

On a summary strike-out application, the claimant’s supporting factual assertions are assumed to be true. The First-tier Tribunal may decide prior questions of law or fact needed to determine whether a service charge is payable, but its jurisdiction does not extend to unrelated disputes.

Mare Street Ltd held a 150-year lease of airspace above Northside Studios from Theowal Limited and, under a development agreement, built seven flats there. Theowal later demanded £8,615.01 in service charges for periods between 15 October 2023 and 18 June 2024. Mare Street disputed liability, including on the basis that its obligations had ended under the development agreement.

The First-tier Tribunal, Property Chamber, struck out Mare Street’s application on 11 November 2025, believing no development had taken place and that the lease concerned only airspace. The Upper Tribunal considered whether the application could properly be struck out for want of jurisdiction, including on grounds different from those relied on by the FTT.

1. Appeal allowed. The FTT struck out the application on a mistaken view of the facts and did not decide the jurisdiction question on the correct basis. Its decision was set aside and the application remitted.

2. Whether a unit was a dwelling had to be assessed during the period for which the charges were claimed, not merely when the lease was granted. The Tribunal applied the timing approach accepted in JLK Ltd v Ezekwe & Ors [2017] UKUT 277 (LC). The earliest possible release under the development agreement was 12 months after practical completion on 26 October 2023, and none of the demands covered a period after that date.

3. A charge payable by an intermediate lessee under a lease comprising several dwellings may be a service charge under section 18 of the Landlord and Tenant Act 1985, as established in Ruddy v Oakfern Properties Ltd [2007] Ch 335. If a flat within the demise was sufficiently complete to be a dwelling during the relevant period, the lessee could be a tenant of a dwelling. The lease’s description of the demise as airspace, and its inclusion of other flats, did not determine that question.

4. Where jurisdiction on a strike-out application depends on disputed facts, the claimant’s supporting facts are assumed to be true. The question is whether, on that assumption, the claim has no realistic prospect of success or falls outside the FTT’s jurisdiction. Mare Street’s evidence asserted that the flats had been completed and sold; Theowal had provided no factual evidence to the contrary. The application therefore could not be struck out on that basis.

5. Section 27A gives the FTT jurisdiction to decide prior questions of law or fact necessary to determine whether a service charge is payable, including who must pay it. Concurrent jurisdiction in another court or tribunal does not remove that power. The FTT cannot decide unrelated questions, but asking it to determine additional matters or describing the requested relief as declaratory did not justify striking out the service-charge application as a whole.

6. The FTT must determine whether any flat was sufficiently complete to be capable of being lived in during all or part of the charge period; actual occupation is unnecessary. If so, it may determine the section 27A questions. If not, it cannot do so. The application was remitted for that determination, with any request for directions to be made within one month if the parties could not agree.

1. Upper Tribunal (Lands Chamber): In [2026] UKUT 244 (LC) , the appeal was allowed, the FTT’s decision was set aside, and the application was remitted for determination.
2. First-tier Tribunal, Property Chamber: On 11 November 2025, in case reference LON/00AM/LSC/2025/0947, the FTT struck out the application for want of jurisdiction.