Wilcock v The Guinness Partnership Ltd (2019) UKUT 146 (LC).

This is an Upper Tribunal appeal on the meaning of ‘variable service charge’.

Mr W had an assured shorthold tenancy of a flat from Guinness. The tenancy agreement provided that the landlord would provide specified services and that the tenant would pay a service charge for these. The service charge will “be variable and reviewed annually when the net rent is reviewed. At that time the service charge many be increased or decreased. This will be done according to the costs incurred in the service charge period. Annually the Association will consult with tenants regarding the services provided.”

The specified services were: Garden Maintenance, Lighting (Stairways), Landlords Lighting External.

Mr W had brought a challenge to the service charges in the First Tier Tribunal. One of the items raised was that sums had been claimed under the service charge by Guinness for effecting bulk refuse removal from the car park to the rear of the block. There was apparently a problem of fly tipping of waste in the car park.

The FTT had found that this charge was payable, on the basis that “The tenancy provides for a variable service charge and consequently the Tribunal determines the Respondent is entitled to charge for services in addition to those specified within the original tenancy agreement”. The charge itself was held to be reasonable in amount.

Mr W appealed and was given permission only on the bulk refuse removal costs.

Guinness argued that:

The tenancy agreement provided that the charge could be increased or decreased. The bulk refuse costs were introduced under this provision. Notice of the alteration had been given to Mr W, and there was no requirement for consultation.

As the landlord was responsible for repair and maintenance of common areas it was only fair that the tenants contributed to the costs of this.

Rather weirdly, and completely irrelevantly, Guinness went on to accuse Mr W of hoarding and abandoning items at the property. Even if true (and it was an allegation that the Upper Tribunal quite rightly refused to consider), it has no bearing on  entitlement to charge under the service charge. As the Upper Tribunal tartly observes, no claim in breach of covenant was before it, or could be. “The only matter before this tribunal is the appeal from the decision of the FTT that the respondent was entitled to include within the service charge the costs of bulk refuse removal.”

The question was whether the provisions of the tenancy agreement permitted Guinness to charge for services other than those set out in the schedule.

The FTT’s conclusion was wrong. The service charge being ‘variable’ was only with reference to the amounts to be charged. it did not entitle Guinness to add to the services. The obligation on Guinness to repair and maintain the common parts had been there from the start of the tenancy, but the Schedule limited what could be charged for.

The tenancy agreement was clear. The service charge was restricted to the items in the schedule. The appeal was allowed and Guinness could not charge for the bulk refuse clearing costs.