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Estate Tenants Challenge Crushing Service Charge Bills

Published: 15 September 2014, in categories: Landlord and Tenant Updates | Legal Updates | News and Updates

Estate Tenants Challenge Crushing Service Charge Bills

Long leaseholders on a council-owned housing estate - who were hit with service charge demands running into tens of thousands of pounds each following major refurbishment works - have had their hopes of reducing their bills boosted.

The estate comprised six tower blocks and over 750 flats. The wide-ranging works to lifts, cladding, roofs, balconies and windows resulted in tenants being presented with very substantial bills. One couple received a demand for £42,000.

A number of tenants challenged their bills, claiming that they should be reduced to take account of defects in the works. However, subject to a few minor deductions, the First-Tier Tribunal (FTT) ruled that the demands were payable in full.

It did so after accepting an undertaking from the local authority landlord that any defects would be fully rectified by a deadline date. The FTT took the view that any other course would involve the ‘incredibly difficult’ task of assessing deductions to which each individual tenant was entitled.

In allowing the tenants’ appeal, the Upper Tribunal (UT) ruled that the FTT had no inherent jurisdiction to accept the council’s undertaking and no power to enforce the same. The terms of the undertaking were in any event ‘much too imprecise’ to be acceptable. The matter was returned to the FTT for deductions from the service charge bills to be assessed on a percentage basis.

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