Reasonableness of Service Charge

Landlord and Tenant

Under the Landlord and Tenant Act 1985 leaseholders are liable to pay service charges where they are ‘reasonably incurred’.  In the recent case of Garside and another v RFYC Ltd and another [2011] it was ruled that the financial impact on the tenants can be taken into account when considering what is ‘reasonable’. In this case the tenants did not dispute that the work needed to be done.  However, they did contest that the work should be phased to allow them to spread the cost of the increased service charge.  The appeal was allowed meaning that landlords must balance the financial impact on their tenants when deciding if work should be carried out in one go or spread over a longer period.  Nevertheless, Judge Alice Robinson stated “If repair work is reasonably required at a particular time, carried out at a reasonable cost and to a reasonable standard and the cost of it is recoverable pursuant to the relevant lease then the lessee cannot escape liability by pleading poverty”.

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