Despite a lack of s20 consultation, the Upper Tribunal has ruled that, since this was not pleaded, a leaseholder must pay his share in full of major works undertaken by the landlord.
In Thirty One Crescent Grove Limited v Sven Atherden [2024] UKUT 80 (LC), the Upper Tribunal ("UT") has provided a reminder that applicants must fully particularise an application to the First-tier Tribunal ("FTT"), as it does not have the jurisdiction to make rulings on issues that are not contained within a submission, and that leaseholders cannot use the service charge to recover costs incurred in relation to repairs of the wider building without the consent of the landlord.
Mr Atherden, the respondent, is a leaseholder in a building owned by the appellant, the freeholder. The respondent is also a shareholder in this freehold company alongside the four other leaseholders of the building. In May 2021, the freehold company undertook major works to the stairwell to the building, which the respondent complained were not sufficiently evidenced by an appropriate invoice. The respondent then separately undertook works to the roof of the building, which he then sought to recover from the other leaseholders via the service charge. This recovery was refused by the freehold company.
In May 2023, the FTT found in the respondent's favour that the works on the stairwell were not recoverable through the service charge – not because of a lack of an invoice as submitted in the initial application, but rather because a s20 consultation process had not been correctly followed by the freehold company and therefore the recoverable sum for the stairwell works was limited to £250 per leaseholder. The FTT also found that as the roof works undertaken by the respondent had been discussed with the freehold company, these costs were recoverable from the other leaseholders as a service charge.
However, on appeal, the UT disagreed with the FTT's decision. The respondent had not raised the lack of s20 consultation in his initial application. Although the freehold company had failed to evidence the s20 consultation process being followed, the respondent had not complained of it in the first instance, and it was not within the FTT's jurisdiction to introduce s20 consultation as an issue. The cost of repairing the stairwell was therefore recoverable in full.
Furthermore, although the respondent owns a share of the freehold company, he could not make decisions to enact roof repairs on his own without a decision supporting the works from the freehold company. So, the roof repair costs could not be recovered through the service charge.
An application to the FTT is not a panacea in and of itself – any applicant needs to make sure they correctly set out their case in full within their application, as the FTT does not have the jurisdiction to tell an applicant what issues they should be complaining of. Leaseholders need to make sure they know where they stand with a landlord before spending any money on repairs to a building, as they may not be able to recover the costs.
