Service Charges: The Garden Quarter (Caversfield) Management Company Ltd v Ortet [2025]

The Garden Quarter (Caversfield) Management Company Ltd (‘the RTM’) are responsible for an estate comprising 200 freehold house and leasehold flats. 

 

The RTM carried out works to the building which included paintwork. The cost of the works totalled £3,392.16. The RTM charged the leaseholders for the costs. One of the leaseholders, who held a 175 year lease, expressed dissatisfaction with the work that had been undertaken. 

 

The First Tier Tribunal (‘the FTT’) found that only £1,000 of the demanded amount should be payable by the leaseholders due to the fact that the quality of the work undertaken was poor. The RTM appealed the decision stating that the FTT did not sufficiently explain its findings or provide rationale in its decision. 

 

The Upper Tribunal (‘the UT’) allowed the appeal and set aside the FTT’s decision. The UT stated that the FTT is required to clearly explain its decision when determining the payability and quantity of service charges. The FTT had inadequately explained its decision and failed to address the issues including the timing of the service charge demand and the issues raised by the leaseholders regarding the quality of work. 

 

Although the RTM was successful in its appeal, it was unable to claim the costs of the appeal through the service charge and the case was remitted back to the FTT for a further decision. 

 

 

Landlords and management companies have been given some comfort in the fact that the FTT has to show rationale for its decisions and provide a clear explanation as to how they have reached a decision or how the service charges due have been calculated. The UT noted the pressures that courts and tribunals are under un terms of time, giving some guidance as to key points the FTT should include in a decision. It is absolutely critical though that clear and thorough reasoning is given by courts and tribunals in their decisions.