First tier tribunal for nonpayment of service charges

by Readers Question

12:10 PM, 9th May 2017
About 2 years ago

First tier tribunal for nonpayment of service charges

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First tier tribunal for nonpayment of service charges

We have had a case taken against us for what is supposed to be no payment of service charges.

We have disputed the charges and so the landlord has issued proceedings against us, but we have now received a letter from the court stating the the judge has sent it to the first tier tribunal.

Has anyone come across this and if so why was it referred to there instead of giving a judgement.

Many thanks

David



Comments

Florance Kennedy

14:29 PM, 9th May 2017
About 2 years ago

I think First Tier is the new equivalent to the Sheriff Court in Scotland. I think it is a panel of experts rather than a sheriff who make the decisions. I think. A quick internet search should help you, or contact Shelter or even the Scottish Association of Landlords.

Monty Bodkin

15:34 PM, 9th May 2017
About 2 years ago

The first tier tribunal is the new name for the Lease Valuation Tribunal.

They have far more expertise in this area than your average judge which is why it has been transferred across.

List of decisions and advice here;

http://decisions.lease-advice.org/

Freeholders often try taking leaseholders to court in disputes instead of a Tribunal in an attempt to intimidate them.

Giles Peaker

10:36 AM, 13th May 2017
About 2 years ago

The court often transfers disputed service charge claims to the First Tier Tribunal (PC) for the Tribunal to determine the service charge payable. The matter would then go back to the County Court for final order.

However, you should be aware that by allowing the landlord to bring a county court claim, you are very likely now on the hook for the landlord's legal costs in both the county court and the Tribunal (even though the Tribunal is a no-costs jurisdiction and even if the county court claim is a small claim). Your lease will almost certainly have a clause entitling the landlord to the costs 'preparatory or in contemplation of preparation and service of a notice under section 146 Law of Property Act 1925'. This entitles the landlord to 'contractual costs' of the determination of breach by a court or tribunal.

Even if the Tribunal reduces the amount of service charge demanded, you will be liable for the landlord's costs. Even if you pay the service charge now, it is too late to avoid liability for contractual costs.

The general advice on disputed service charges - to avoid exactly this - is to pay them, then take it to the Tribunal. Payment is not an admission that the charge is correct, so the Tribunal can reduce the sum, or decide it is not payable, but because the charge has been paid, there is no breach, so no proceedings 'preparatory' to a s.146 notice and no costs liability on you.

Mike McDonagh

10:50 AM, 13th May 2017
About 2 years ago

Yes it is normal that any lease dispute will be referred to first tier (formerly LVT). Unlike an ordinary court which simply applies the letter of the law they are allowed to interpret and apply reason.
They are typically sympathetic to individual leaseholders and are happy for you to represent yourself but beware and be well prepared.
You say you are disputing the charges but you will need to be very specific as to which charges and why. You also need to ensure that you have only withheld those charges that are in dispute. So for example if you are disputing the validity of specific repair works, you cannot withhold the payment which covers general maintenance, communal heating, lighting, water, cleaning, gardening, block insurance, ground rent etc. You must identify specifically what you are disputing, why you are disputing it, show that you have raised objection with the landlord (or agent) and paid all undisputed charges in a timely manner.
If you fail in any of the aforementioned sympathy will rapidly dissolve
Good luck,
Mike


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