91 Outram Road RTM Company Limited v Gary Sharpe

Under the Landlord and Tenant Act 1985, a service charge is reasonable only where the relevant costs were reasonably incurred. On a rehearing, the tribunal assessed each disputed item against the evidence of the work, service and expense. Where the evidence showed that works were more likely than not to have been done and nothing indicated that the expenditure was unreasonable, the charge was recoverable. The tribunal also found that properly served section 20 notices supported recovery of the full works costs. Costs for work on a roof accessible only from one flat were not payable by all the flats through the shared service charge.

91 Outram Road RTM Company Limited managed a block of six flats. Gary Sharpe, the leaseholder of flats 2 and 6, challenged around 100 service-charge items for 2015 to 2023. The First-tier Tribunal disallowed or reduced some charges because the RTM Company could not then retrieve records held by its former managing agent, Prime Property Management Limited.

After Mr Butler, a director of the RTM Company, recovered further documents, the Upper Tribunal admitted new evidence for 16 items and directed a rehearing of those items. The central questions were whether the evidence established that the disputed work and services had been provided, whether their costs were recoverable and reasonable, and whether the relevant consultation notices had been served.

The appeal was allowed in part by way of rehearing. The First-tier Tribunal’s decision was set aside to the extent that the rehearing reached different conclusions.

1. Reasonableness and evidence. Under section 19 of the Landlord and Tenant Act 1985, the relevant costs had to be reasonably incurred. The Tribunal decided the disputed items on the evidence. It found that the £400 wall-painting work was more likely than not to have been done, relying on a receipted invoice and Prime’s records; there was no indication that the cost was unreasonable. Four £144 communal-cleaning charges were payable, with Mr Sharpe liable for his one-sixth share for each flat. The £1,200 management fee was recoverable in full: although Prime’s service may have been inadequate, Mr Sharpe gave no examples or other evidence of shortcomings. The £180 drone survey was also payable, as the invoice and surrounding circumstances supported a finding that it had been authorised and carried out.
2. Consultation and works costs. The new evidence showed that the section 20 notices for electrical works and 2022 major works had been properly served. Mr Sharpe’s assertions that consultation was absent or defective were unsupported. The full £1,620.42 electrical cost and £4,696 major-works cost were therefore recoverable, reversing the First-tier Tribunal’s £250-per-lessee limits. The intercom charge was accepted by Mr Sharpe. The roofing charge was reduced by 20%, as agreed, leaving £1,080 recoverable.
3. Other items and orders. The £300 roof-clearance charge was not payable by all flats because the roof area was accessible only from flat 5. The door-knocker charge was allowed at £90, and the parties agreed that £55 was the reasonable cost of testing emergency lights. The alteration licence for flat 4 and plumbing following a leak in an individual flat were excluded from the shared charge. The Tribunal could not compel payment of any outstanding balance; that would require an application to the County Court.

1. Upper Tribunal (Lands Chamber) — On rehearing, determined 16 service-charge items on new evidence and set aside the First-tier Tribunal decision to the extent that its conclusions differed. The decision is [2026] UKUT 279 (LC) .
2. First-tier Tribunal (Property Chamber) — Determined Mr Sharpe’s application concerning service charges for 2015 to 2023 under reference LON/00AH/LSC/2024/0736. It disallowed or reduced some items where the RTM Company lacked supporting records.