The Court of Appeal has upheld the decision of the Upper Tribunal (Lands Chamber) that it was not reasonable for residential tenants to pay in advance for the entire cost of remedial work where it was expected that NHBC would make a contribution.
This particular case is a reminder to landlords of section 19(2), which seeks to protect residential tenants from unreasonable demands. Although an adjustment would have been made once NHBC's payment was received, in this particular case it was found to be unreasonable to expect the leaseholders to pay the higher service charge in the interim. The case highlights the flexibility available to tribunals in deciding the reasonableness of advance service charges.
Case: Avon Ground Rents Ltd v Cowley and others (2019) EWCA Civ 1827 (29 October 2019) (Davies LJ, Coulson LJ, McCombe LJ).
For further details of the implications of this case and for advice on property issues contact Commercial Property Partner, David Redgate.
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