Tenants who feel that excessive service charges are being demanded of them are not powerless and can challenge the reasonableness of their charges before the First-tier Tribunal (FTT). Recently, the tenants of two leasehold flats succeeded in achieving reductions to various charges they had been asked to pay.
The tenants sought a determination under Section 27A of the Landlord and Tenant Act 1985 of the amount of service charges payable in respect of the 2022/23 service charge year. They claimed that various amounts charged were excessive and also sought a reduction in the management fee. Included in their evidence was a decision the FTT had made in respect of the previous year's service charges.
The tenants had been asked to pay £3,238 for insurance, but had obtained a quote for £841. After taking into account differences in cover between the two policies, the FTT determined that a charge of £1,750 was reasonable.
The service charges included £504 for window cleaning four times a year. The tenants had obtained a quote for £60 to have their windows cleaned twice a year. Agreeing that four cleans a year seemed excessive, and observing that it was the tenants who would suffer if their windows were dirty, the FTT agreed with the amount they contended for. A charge of £300 for a drone survey, carried out less than a year after the roof had been repaired, was also found not to be payable.
The FTT found that a fire health and safety risk assessment was unnecessary as one had already been carried out the previous year. A charge of £475 for decoration of the common areas of the building was also found not to be payable, on the grounds that the work had been overvalued and was unnecessary.
Agreeing that the management of the building had not been of a good standard, and noting that the tenants had been obliged to bring proceedings in the past to achieve fair service charges, the FTT reduced the management fee from £450 per flat to £225, in line with its earlier decision concerning the previous year's service charges.