Service Charges Construction of service charge provisions

Summary

The Upper Tribunal determined that a tenant was liable to pay service charges despite the tenancy being silent as to what services were to be provided by the Housing Association under the agreement.

Facts

Mrs Kahar was the tenant under a weekly periodic tenancy originally granted to her daughter in 2006. The tenancy provided for a service charge to be paid in the amount of £14.60 per week which could be increased or decreased by four weeks’ notice in writing. However, the tenancy agreement contained five blank lines where details of the services to be provided could be set out. The blanks had not been filled in. The landlord was obliged under the terms of the agreement to carry out a number of repairing obligations.

Mrs Kahar took an assignment of the tenancy in 2014 under which she agreed to observe all of the terms of the tenancy. Whilst not referred to or included within the deed of assignment, a schedule of the landlord’s services was provided to Mrs Kahar at the same time.

In 2015, Mrs Kahar received a notice from the landlord that the service charge would increase to £16.22 per week. Accordingly, she made an application to the LVT (in Wales) for a determination of her liability to pay.

Issues

Despite neither party raising the matter in their respective statements of case, the LVT was concerned about Mrs Kahar’s liability to pay a service charge at all, given that no services were referred to in the tenancy agreement.

First instance

The LVT held that no amounts were due and payable by Mrs Kahar. At no time did Mrs Kahar know what services were to be the subject of the service charge and she had not agreed to pay for those services on the true construction of the tenancy agreement. The LVT felt that it could not write the tenancy agreement for the parties where they omitted to include an essential description of the services.

Decision on appeal

The Upper Tribunal disagreed and held that service charges were payable. Mrs Kahar could have found out at any time what services were being provided despite the fact that the tenancy agreement did not set these out. At the time of the assignment to Mrs Kahar, the services provided under the agreement would have been readily ascertainable. The practice of the parties over the last eight years provided a continuous record of the services rendered to tenants and of the sums charged for them. Moreover, Mrs Kahar had agreed to be bound by the terms of the tenancy agreement, including the obligation to pay for services. Indeed, she had made regular service charge payments in the past, as had her daughter before her.

Where services have been provided under a tenancy and the tenant has acquiesced to and benefitted from those services being provided, a Tribunal will be slow to find that in fact no service charge is payable by the tenant.