The Upper Tribunal (Lands Chamber) has ruled on an appeal by a management company (Solarbeta Management Company Ltd v Akindele) regarding what can be recovered under service charge provisions. The case involves clauses in a lease which are very broad and open to interpretation regarding what fees or costs can be recovered through service charges. The defendant had argued successfully in the lower tribunal that they should not have to contribute towards the upkeep of services (in this instance a lift) not specified in the lease and to which their flat had no access and therefore received no benefit. The Upper Tribunal decided that the lease was non specific about which charges could be recovered and that the management company had discretion to recover costs for works it reasonably considered necessary or expedient for the use and occupation of the flats. Accordingly it would not be unreasonable for a management company to conclude that it was “necessary or expedient” to maintain the lift. It therefore overruled the First-tier Tribunal.
The Tribunal also agreed with the appellant that where a lease permits a lessee-owned management company to employ a firm of managing agents, the company was able to recover through the service charge the directors’ costs and expenses associated with running the Estate.
If you would like to discuss this case in more detail, please get in touch with Nicholas Kissen on info@lease-advice.org or 020 7832 2500.
