With all the drama caused by the decision in Phillips v Francis a more recent decision which offers some good news to managing agents may have been overlooked. Recent decisions have often seemed to complicate and confuse what were standard and industry accepted practices, but, finally, the Tribunal has made a decision which could simplify the position for landlords and managing agents where the estates are large with multiple buildings. Separately, we hope that more relief will follow as an application to appeal the Chancellor’s decision in Phillips v Francis has been made.
In the case of Blackpool Borough Council and others v Cargill, which was an appeal to the Upper Tribunal, the Tribunal held that it was not unreasonable for a landlord to apportion a residential management charge equally between tenants. In the absence of any specific percentages in the lease, it has traditionally been thought that a reasonable apportionment should reflect the size of a tenant’s property, or the nature of the works carried out. However, this decision seems to be a triumph for simplicity.
The main reasoning behind the decision was that it was impossible to obtain precision by attempting to formulate an estimate of the various expenses and outgoings for the individual buildings and that this would have increased the work and, of course, the charge to the tenants.
It is to be remembered that this case involved the management of all the Council’s housing stock, some 6000 properties and, therefore, clearly where the estate is much smaller, it will not necessarily be reasonable for the landlord to equally apportion charges to tenants. Each case will turn on its facts, but for managing agents dealing with extensive estates, this decision could provide some relief.
There are many potential hazards for landlords and managing agents trying to navigate the legislation and case law governing long residential leases. At OTB Eveling we offer a fixed fee report service for providing advice to landlords or management companies who encounter difficulties in this complex area of law. We can also offer a competitive fixed fee pricing structure for dealing with some commonly encountered problems. For more information, please contact Michael Clark, OTB Eveling’s specialist property litigator.