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Prestige Apartment Block Tenants Battle Service Charges

Residential tenants of listed former newspaper offices, engaged in an epic struggle with their landlords over the heavy cost of maintaining the historic building, have been urged to seek a reasonable compromise by the Upper Tribunal (UT).

Two floors of the baroque-style landmark had been converted into prestige flats which had been sold on long leases. The remainder of the building was used as shops, offices and basement storage space. The cost of maintaining the elaborately decorated building was substantial and the relationship between the tenants and their landlords had been marred by dispute over service charges.

In less than five years, the tenants’ annual service charges in respect of their modest one-bedroom flats had escalated from £1,000 to more than £3,000 and an extensive programme of external redecorations meant that their bills were likely to rise to around £5,000. Arguments that they were being asked to shoulder an unfair proportion of the cost were, however, rejected by the First-tier Tribunal (FTT).

In upholding the tenants’ appeal against that decision, the Upper Tribunal (UT) found that the FTT had taken too narrow an approach when it accepted the apportionment of service charges put forward by the landlords’ surveyor. The matter was remitted for re-hearing by the FTT.

Acknowledging that its decision would inevitably prolong the dispute, the UT expressed the hope that, in view of the expense and inconvenience of a further hearing, the parties would be able to reach agreement on a basis of apportionment with which all would be content.