“Reasonableness” of Service Charges

22 Aug 2023 | Shilpa Mathuradas
service charges

Table of Contents

It is well known that the relevant costs that a landlord incurs in the provision of services, repairs improvements, maintenance or insurance under the terms of the lease must be considered when determining the amount of service charges payable by the leaseholder for a period.

Under section 19(1) of the Landlord and Tenant Act 1985 service charges must be

(1)  reasonably incurred; and

(2) where they are incurred on the provision of services or carrying out of works, only if the services or works are of a reasonable standard.

It is also well known that the “reasonableness” must be determined on an objective standard of reasonableness and not the lower standard of rationality.

This test was considered in the case of Assethold Ltd v Adam and others [2022] in which leaseholders were issued with a service charge demand which included a sum of £28,000 for the cost of waking watch for the building. From October 2019 to August 2020 surveyors were commissioned by the managing agents to inspect the building for the purpose of health, safety and fire risk assessment. The external walls of The building were not found to present a significant fire risk.

However, in January 2021 a further external walls risk assessment was commissioned by the surveyors who had carried out the inspection in 2020. The surveyors concluded that combustible materials were present in external walls and this presented an “intolerable” risk with consequences of a fire. The remedial action recommended that an extended alarm system or a waking watch be implemented. The freeholder opted for the latter option.

The leaseholder applied to the Tribunal where the reasonableness of the decision making process was considered. It was stated that where two course of action were available the landlord did not have to opt for the cheapest. The leaseholders produced expert evidence that the freeholder’s action were not reasonable. Relying on this evidence The First Tier Tribunal concluded that the finding in the 2021 report was wrong given the vast difference between the 2021 report and the earlier reports and the freeholder should have commissioned a further report and acted unreasonably in not doing so. As a result they found the costs of the waking watch were unreasonable given that it was based on a report that was wrong.

The freeholder appealed on the basis that the question of what the freeholder should do is  subject to a rationality test. An objective test of reasonableness applied to the price only. The Upper Tribunal disagreed and determined that the landlord’s choice of “what to do” required an objective assessment of whether the landlord had followed a reasonable decision- making process adopted a reasonable course of action.  In the alternative they argued that if the objective standard of reasonableness was the correct test, the First Tier Tribunal had misapplied the same. The Upper Tribunal agreed.

It determined that the freeholder has acted properly in relying on 2021 report as it was from a reputable firm who specialised in fire safety. They also acted reasonably in putting in place a waking watch. The Upper Tribunal stated that the First Tier Tribunal has placed reliance on leaseholder’s expert and had therefore considered the issue with the benefit of hindsight. The First Trier Tribunal should have considered the issues on the information available at the time the costs were incurred and not a later date.

Share this article

Contact

Contact Shilpa today

For a free initial conversation call 020 7485 8811

Email us Send us an email and we’ll get back to you






    • “Shilpa is knowledgeable and helpful. She is not afraid to challenge the boundaries for her clients, with excellent results.”

      Surveyor, London

    • “Shilpa combines the fierce representation of her clients’ best interests with the reasonable and constructive attitude that the Court always looks for in modern litigation. She has invaluable tactical awareness and skilfully handles complex and unusual cases and difficult opponents. As a barrister it is a pleasure to be instructed by her because you so often find that she has already taken the steps that you would have recommended had you been the client’s first point of contact. Her preparation of cases for trial is extremely thorough and helps ensure a positive result before you have set foot in Court.”

      Paul De La Piquerie, Selborne Chambers

    • “Thank you so much for your help. You were efficient, clear and advised me well in addition to being very pleasant to work with.”

      Susan Pogue, London

    • “I would like to sincerely thank you for all the hard work in assisting me to resolve my rather unusual and complicated case. Last 2 years were very stressful and intensive and often only your professional approach and personal realistic but positive attitude helped me not to give up. The uncertainty weight of more than 10 years is off my shoulders thanks to you and your colleagues. Thanks once again for your legal advice, time, and efforts”.

      Khrystyna, London

    • “Mostly I am grateful that Shilpa was understanding about the delays caused by my illnesses, and that she stuck with me and got a good deal for my tenancy. I did feel she fought to protect me and my rights. I appreciate that she kept me informed about progress, sending copies of emails with the other side and consulting me when necessary. I appreciated her eye for detail on legal matters and how she stood firm against a somewhat tricky opposing solicitor.”

      H Banks, London

    • “Shilpa was very thorough in the advice she provided and I was immediately put at ease with her involvement. She works hard to achieve the agreed objective and I very much appreciate her help in my matter.”

      Laurence Dumenil, London

    • “Shilpa was very diligent in her attention to detail and her pursuit of all necessary documentation; she showed great determination in the face of many requests by the other party’s solicitor to let certain things slide. She was thorough and professional which gave us a great sense of security.”

      Oliver Forder, Managing Director, Tank Form Limited

    • Shilpa really helped us take charge of the situation and helped resolve this property dispute. I would not hesitate to recommend her or the team to anyone in a similar situation.

      David A, Trustpilot Review

    • On first meeting Shilpa I was sure that she understood immediately my requirements, and was sympathetic both to my financial restraints and my emotional state. She achieved everything I asked of her and proved to be invaluable, professional and efficient

      P Ashcroft, Trustpilot Review

    • At every step Shilpa alleviated any concerns and stresses we had. Always fast to respond, always professional and super knowledgeable.

      Trustpilot review

    • Shilpa has helped us through some key property litigation matters (residential and commercial) since 2014 and has delivered on every occasion. One particular issue had kept us in a state of stress and tension for almost a decade and after getting in touch with Shilpa she was able to help us bring the matter to a peaceful and successful conclusion.

      Trustpilot review

    • I received a call from Shilpa Mathuradas a couple of hours after filling the enquiry form for a callback. She actively listened to my party wall concerns responding with gentle professionalism, answering my concerns, letting me know what is and is not possible and when best to bring in a solicitor. All this within 10 minutes. Excellent.

      Trustpilot review

    • If I had another reason to have to seek legal advice again, I wouldn’t hesitate to use Shilpa, and would recommend her to anybody who needed legal advice.

      Property Litigation client

    • Shilpa was professional, realistic, and unflappable. Shilpa managed to persuade a reluctant witness to come forward to support my case. She obviously knows her subject very well.

      Property Litigation client

    • I always had full confidence in Shilpa keeping my best interests at heart. I often didn’t understand the legal language, and she would follow this up with a phone call and patiently explain.

      Property Litigation client

    Property Litigation InsightsVIEW ALL

    1. 23.1.2024

      Case Reiterates Local Authorities should follow Allocation Scheme

      R (on the application of Kukhtyak) -v- London Borough of Hounslow [2023] EWHC 2914 (Admin) This sad case concerned an elderly couple...

      Read more
    2. housing discussions
      7.12.2023

      Supreme Court sets High Threshold for Local Authorities...

      Judgment was handed down on 28 November 2023 by the Supreme Court in an important case regarding the main housing duty. The...

      Read more
    3. 28.9.2023

      Gatekept homeless teenager accommodated by local housing authority

      Miss X, a 17 year old whose details are anonymised to protect her privacy, left her family home in March 2022 following...

      Read more
    4. 28.9.2023

      Homelessness case successfully settled for elderly disabled lady

      Ms X, whose details are anonymised to protect her privacy, had been living in a privately rented one-bedroom flat for...

      Read more
    5. 28.9.2023

      Disrepair case against Landlord and Freeholder successfully settled

      Osbornes Law represented a private tenant who lived with his young son. The property suffered from severe disrepair including leaking/...

      Read more
    6. 28.9.2023

      Client successfully rehoused following refusal by local authority

      Osbornes Law represented a client who had been found intentionally homeless by his local authority. He was extremely vulnerable and...

      Read more
    7. 28.9.2023

      Client rehoused and £16,000 arrears cleared

      Osbornes Law were instructed to assist a client to suspend a warrant for possession. The client had fallen into arrears...

      Read more
    8. 26.9.2023

      Victory for Homeless Victim

      Mr X, whose details are anonymised to protect his privacy, fled his home country due to severe persecution from the...

      Read more
    9. 13.9.2023

      Successful homelessness judicial review case against Redbridge Council

      This matter involved a claim in the High Court for judicial review against Redbridge Council for failure to comply with...

      Read more
    10. Renters Reform Bill
      15.8.2023

      The Renters (Reform) Bill – Will it have the...

      There has been much publicity recently over the Renters (Reform) Bill, the assumption being that the government have their eye...

      Read more
    11. 13.7.2023

      Family Unlawfully Evicted Receives Damages of £22,000

      This matter involved an unlawful eviction claim brought by our clients against their private landlord (“the Landlord”). Our clients were...

      Read more
    12. Man is making audit of household expenses
      21.4.2023

      Success in Court of Appeal in child disability...

      The Court of Appeal has today handed judgment in the case of Harrington v Secretary of State for Work and...

      Read more
    13. Churchill Gardens neighborhood in Pimlico
      20.1.2023

      High Court finds Westminster Council’s Housing Scheme...

      Westminster City Council’s housing allocation scheme found to be unlawful The High Court has today handed down judgment finding...

      Read more
    14. East London aerial view
      14.11.2022

      Housing allocation case questions lawfulness of council’s...

      Until February 2022, the social housing allocation scheme for the London Borough of Newham allowed people who lived outside the borough...

      Read more
    15. Business people hands applauding at meeting
      14.7.2022

      20 Years of Celebrating Legal Aid Lawyers

      This year the litigation team at Osbornes attended the 20th anniversary of the Legal Aid Lawyer of the Year 2022 (“LALY 2022”)...

      Read more
    16. london house
      16.5.2022

      Immediate, Non-Deferrable and Unqualified

      Judgment was handed down on 04 May 2022 in the Court of Appeal in an important case regarding the main housing duty....

      Read more
    17. DATE OF BIRTH close up on a printed form
      12.4.2022

      Vulnerable child wrongly assessed to be an adult

      Upper Tribunal finds a vulnerable child to be 17 years old despite two flawed local authority age assessments which led to...

      Read more
    18. Homeless Teenager
      5.11.2021

      Council overturns unlawful housing policy

      Homeless teenager claims victory for more than 1,200 homeless people after forcing council to overturn unlawful housing policy A homeless teenager...

      Read more
    19. shoreditch london
      3.9.2021

      Homeless Teenager takes London Council to High Court

      A homeless teenager is taking a London council to the High Court for ‘unlawfully’ banning hundreds of homeless people from...

      Read more
    20. mould
      19.8.2021

      Housing Disrepair Scandal in South London

      Following an investigation by ITV nearly 500 homes in the Eastfields Estate in Mitcham, south London, owned by the housing association...

      Read more
    21. model houses
      8.4.2021

      Council to amend unlawful housing allocation banding process

      For the last 8 years Brent Council has stopped the majority of homeless applicants from bidding for rehousing, treating them as ‘...

      Read more
    22. Troy Golide
      25.1.2021

      Hackney Council ignore vulnerable resident’s request

      Paranoid schizophrenic ignored by Hackney Council for four years wins legal battle over unsafe front door A man who suffers...

      Read more
    23. asylum seekers
      25.1.2021

      Teenage asylum seeker wins legal battle against Council...

      Vulnerable teenage asylum seeker wins age case against the council which unlawfully assessed him A vulnerable teenager who sought asylum...

      Read more
    24. signing document
      23.12.2020

      EU Nationals with Pre-Settled Status entitled to benefits...

      Court Judgment means EU Nationals with Pre-Settled Status can access benefits and housing On 18 December 2020 the Court of Appeal handed...

      Read more

    VIEW ALL