Barney v Eastern Green Ltd [2013] UKUT 331 (LC) is a helpful little reminder of the (limited) power of the LVT (FTT(PC)) to review apportionment issues in service charges. In the present case, the landlord had (pursuant to a term in the lease) reapportioned service charges in respect of insurance costs to reflect the commercial/residential split in the building. The leaseholders challenged this. Their appeal failed and the case reminds us of how to approach these cases:
(a) where the lease provides for a specific percentage, the LVT cannot go behind that apportionment (see Schilling v Canary Riverside Development Pte Ltd LRX/26/2005);
(b) if, however, the lease provides for a discretion (whether on initial proportions or on re-assessment), the LVT has power to review that discretion
(c) that jurisdiction derives not from s.19, LTA 1985, as it is not an issue of the reasonableness of the costs, but from s.27A LTA 1985, and whether or not this charge is payable in this sum by these leaseholders;
(d) however, the LVT is not the primary decision maker; the lease gives the discretion to the landlord and the LVT is limited to reviewing that decision to see if it is one which fell within the range of reasonable responses (see, e.g. Sheresby v Greenhurst Park Management Co Ltd, noted by us here).