Latest insights from our experts

Posted 3 October 2016
by Simon Sanger-Anderson

Service Charges



This eflash covers 2 recent cases concerning service charges; the first is a case about whether letting via Airbnb is a breach of a lease and the second is about whether a housing association can recover service charges when they are not set out in the tenancy agreement.

In Nemcova v Fairfield Rents Ltd (2016), the tribunal had to decide whether a leaseholder had breached a term in their lease that the flat could only be used as a “private residence”.  The leaseholder was letting the flat out for short periods through Airbnb.  The tribunal decided that letting through Airbnb for short periods of time was a breach because there was no connection between the occupier and the residence and no degree of permanence to the situation.

The principle from this case could equally apply to a tenancy agreement containing a term that the tenant must use the property as a “private residence”.

In Cardiff Housing Association Limited v Kahr (2016), the tribunal had to decide whether a housing tenant was liable for service charges when her tenancy agreement did not specify what they were.  What it appears happened is fairly common; when the Housing Association issued the tenancy agreement, they failed to fill out a section which required the service charges to be listed.

The first tier tribunal found that the failure to set out the service charges meant the landlord could not recover them.  The Housing Association appealed.  The Upper Tribunal decided that the tenant was liable even though they were not specified because:

Information about the services that were provided were easily obtainable; The landlord provided regular information as to what services were provided; The tenant had agreed to pay for those services and had paid for them in the past; and, most importantly the tenancy agreement specified a sum that was to be paid for the service charges thus alerting the tenant to there being a charge.

In our view, whilst it is not fatal that the services which might be charged to a tenant have not been specified in a tenancy agreement, a failure to give a figure on those charges from the outset on the agreement or, during the course of the tenancy, a lack of information about the services provided and their cost might be.  Landlords should, as a matter of best practice, provide service charge summaries on an annual basis and not just when requested by the tenant.

Further advice Please contact our specialists Simon Sanger-Anderson, Sarah Schooling, Jenny Lloyd or Adele Atkinson at Broadwalk House, Southernhay West, Exeter EX1 1UA call: 01392 207020 or email: has@tozers.co.uk

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About the author

Simon Sanger-Anderson

Partner

Partner and solicitor within the employment team, Simon also leads the firm's cross departmental Social Housing Practice Group