Service Charge Recovery: An Unusual But Salutary Lesson

In the case of Sheffield City Council v Oliver the Court of Appeal looked at the impact of third party contributions - in this instance Government funding - on service charge recovery. Both landlords and tenants should take note, as the principles go beyond the specific facts of the case.

Most of the flats within the estate in question, which was owned by Sheffield City Council, were social housing, whilst some (including Ms Oliver's) were let on long leases. There was the usual provision in Ms Oliver's lease requiring her to pay, as part of her service charge contribution, a reasonable proportion of the costs incurred by the Council in carrying out repairs and improvement works to her building.

Sheffield City Council embarked on a wide scale refurbishment project which cost more than £11 million, with funding received under a government scheme of £2.913 million. However this funding contribution was not taken into account when calculating the proportion of the service charge owed by Miss Oliver.

Perhaps unsurprisingly, the Court of Appeal concluded that...