Background
Avon Ground Rents Limited, landlord of 8 Artillery Row in London, charged leaseholders £203,888.10 for a 24-hour waking watch maintained from January to December 2021. The measure followed a December 2020 fire-safety assessment recommending a waking watch pending installation of an upgraded fire alarm system.
The leaseholders challenged a range of service charges under section 27A of the Landlord and Tenant Act 1985. They contended that the landlord should have installed the alarm sooner rather than await government funding. The First-tier Tribunal found that the alarm could reasonably have been installed by the end of July 2021 and limited the waking-watch charge to £70,000.
The Court’s Holding
The Upper Tribunal allowed the landlord’s appeal on the limited calculation issue, set aside the £70,000 figure, and substituted £118,934.66 as the amount payable by the leaseholders in their respective proportions.
The First-tier Tribunal’s only finding of unreasonable expenditure was that the waking watch continued for too long. The leaseholders had not challenged the monthly rate paid for it, and there was no evidential basis for treating that rate as unreasonable. The proper consequence of allowing seven months of cover was therefore seven twelfths of the actual 12-month cost, rather than a proportion of the earlier estimated cost.
Key Takeaways
- A service-charge reduction for an unreasonable delay must reflect the finding actually made and the evidence before the tribunal.
- Where only the duration of a waking watch is challenged, the recoverable sum should be calculated from the actual cost for the reasonable period.
- The Upper Tribunal adopted £118,934.66, representing seven twelfths of the actual £203,888.10 charge.
Why It Matters
The decision illustrates the section 19 requirement that service-charge costs be reasonably incurred, while confirming that a tribunal cannot disallow additional sums on a basis not put in issue or supported by evidence.
For fire-safety interim measures, the case distinguishes between an excessive duration of a necessary service and an excessive rate for providing it. Each requires its own evidential foundation.