Service Charge (Lift)

• Law Firm: Voisin Law
• Subject Matter: Real Estate and Construction, Landlord & Tenant - Leases
• Author: Emma Baker
• Published date: 18 May 2023

You pays your money and takes your choice - Tenant's liability for service charge

Q: If a tenant has the right to use part of a building under the terms of his lease but doesn't, is he still required to contribute towards its maintenance? A: In short, 'yes'.

In Reekie v Oakwood Court Residents Association [2023] UKUT 45 (LC) the Upper Tribunal (Lands Chamber) (UT) was asked to determine whether a long leaseholder was obliged by the terms of his lease to contribute towards the cost of refurbishing a lift he claimed not to use.

Background: Mr Reekie had long leases of the Flats numbered 1, 2 and 5 Oakwood Court in Eastbourne. The building was a large Victorian House which had been converted in the late 1980s to create eight self-contained flats: two were on the ground floor and three were on each of the upper two floors. Prior to Mr Reekie's acquisition, Flats 1, 2 and 5 were converted to form a single dwelling occupying most of the ground floor and part of the first floor of the building and, as part of those works, an internal staircase was installed between Flat 1 and Flat 5, making access to Flat 5 on the first floor possible without the need to use the communal side entrance, staircase or lift serving the building.

The lease of Flat 5 granted Mr Reekie an express right to use the lift and required the Oakwood Court Residents Association Ltd (OCRA) - the management company under the leases - to keep the lift in repair. Each of the tenants in the building were required to pay a specific percentage of the costs OCRA incurred in equal half yearly payments (the service charge) and there was an ad-hoc demand provision allowing OCRA to request contributions towards "any unusual or unexpected expenditure". Flat 5's service charge contribution was 7.338%.

In 2019, OCRA demanded '3,870 from Mr Reekie, one sixth of the estimated costs of refurbishing the lift. No contribution was sought for Flats 1 and 2 which were on the ground floor of the building. Mr Reekie refused to pay, arguing that he did not use the lift so should not be liable to contribute towards its maintenance. OCRA issued proceedings for a determination and, at first instance, the First Tier Tribunal (FTT) found Mr Reekie was liable to pay the contribution sought by OCRA. Mr Reekie appealed to the UT.

The issue before the UT: Clause 1 of Part II of the Fifth Schedule of Flat 5's lease said:

"In respect of any parts of the main structure of the Building (for example the lift flat roofs or balconies)...