In Ground Rents (Regisport) Ltd v Dowlen [2014] UKUT 144 (LC), the Upper Tribunal (Lands Chamber) had to – once again – grapple with s.20B, Landlord and Tenant Act 1985. The facts are quite straightforward. Imagine, if you will, that there is a modern development of three blocks of flats. It was developed by Countryside Properties (UK) Ltd, who were also the original landlords under all the long leases. Once the leases had been created, the freehold was transferred to the appellant.
During CPLs period of ownership, there had been an agreement with Thames Water to supply, well, water, to the blocks. That agreement wasn’t assigned to the appellants but water none-the-less continued to be supplied. But something went wrong with the bills. Bills for one block made it to the appellant, but the bills for the other two went to CPL (where they seem to have been ignored and not, for example, sent on to the appellant).
The problem went unnoticed until 2010, when the appellant’s managing agent noticed that there were three water meters, but only one bill. Thames Water then demanded the outstanding monies (between c.£65,000 and c.£80,000, it’s unclear exactly how much). The appellant started to put these monies through the service charge and, perhaps unsurprisingly, the leaseholders applied to the LVT (as it was) to determine whether these historic water charges were recoverable.
The issue was s.20B, Landlord and Tenant Act 1985. In short, a landlord must demand service charges within 18 months of incurring the costs (or serve notice saying that he has incurred the costs and the leaseholders will be required to contribute to them at a later date). In OM Property Management Ltd v Burr [2013] 1 WLR 3071, the Court of Appeal had held that costs were incurred when the underlying liability crystalised (whether on payment or presentation of the invoice). The appellant contended that “the landlord” for these purposes was the landlord for the time being, such that the demands being sent to the previous landlord was of no use and that time had only started to run as against it in 2010.
The Upper Tribunal agreed. The landlord was the landlord for the time being and not any former landlord, such that s.20B presented no impediment to recovery. The case was remitted to the FTT for quantification of sums actually due.