This beautiful property in Central London was first drawn to my attention by Tim Calland of Maitland Chambers back in January 2021 when Tim delivered a webinar with me looking at the Court of Appeal decision in the case of 89 Holland Park Management Limited v Hicks in which Tim explained the legal principles, he extracted from the case which concerned issues concerning a restrictive covenant requiring prior approval of plans.
It came as no surprise that the same building was subject to yet more litigation this year when the management company which had been successful in those proceedings and successful in a First Tier Tribunal hearing when attempting to recover the legal costs incurred by way of service charge. For the leaseholders concerned in the original proceedings the victory of the management company must have seemed rather hollow when presented with a service charge bill of £430,411.50 being the apportioned share of those costs.
The decision of the Upper Tribunal on appeal in refusing to allow the management company the right to cover those costs is interesting and is something which will be explored in the September edition of Property Law, but which highlights points a frequently drawn to the attention of residential conveyancers:
Sight of previous years’ service charge accounts may lull buyer clients into a false sense of security. Fire safety measures, litigation costs and the like can radically increase future service charges.
Sweeping up provisions do not extend the range of what a landlord can charge for.
The importance when looking at leases of not interpreting clauses in isolation. In this recent case the Upper Tribunal emphasised that the First Tier Tribunal who found for the applicant management company found that insufficient regard had been given to the context in which clauses in the lease appeared.
Due to demand I will be running another series of webinars on Residential Leasehold Conveyancing starting in September 2022 and will be examining this case in more detail when exploring how residential conveyancers should deal with service charge issues.