Property litigation case update: Hyslop v 38/41 CHG Residents Co Ltd, Re Craven Hill Gardens [2017] UKUT 398 (LC)

In the recent case of Hyslop v 38/41 CHG Residents Co Ltd, Re Craven Hill Gardens [2017] UKUT 398 (LC), a landlord who owned 36 flats had applied to the First Tier Tribunal (FTT) to determine the reasonableness of service and administration charges. The landlord intended to carry out major works to his two adjoining buildings and wanted to determine the liability of the leaseholders within the buildings to pay the costs for him to conduct these works. The FTT ordered that a copy of the application should be served upon on all leaseholders and the landlord later confirmed to the FTT that the leaseholders had been served.

The FTT determined that the service charges were reasonable as the leaseholders failed to respond to the notice served by the landlord. The FTT then directed that the landlord should send a copy of the reasons for FTT’s decision to each leaseholder.

Six months after FTT’s decision was made, a leaseholder appealed the decision claiming that she never received a copy of the application notice or the reasons for the FTT’s decision and subsequently argued that on this basis, the decision should be set aside.

The Upper Tribunal (Lands Chamber) (“UT”) held that although the FTT was permitted under the rules to allow the landlord to serve copies of the notice upon the leaseholders; the FTT was not allowed to delegate responsibility to the landlord to serve the leaseholders with copies of the reasons for the decision. For the reasons above, the UTT set aside the decision and the reasonableness of the service and administration charges was to be decided by an alternative FTT.

This is an important decision for landlords, as the case also raised the issue as to whether the landlord had served the notice on the leaseholders. It is therefore a consideration for any landlord serving a notice on the leaseholder if it may be appropriate to serve documents by hand or special delivery in certain circumstances.

If you would like to seek advice relating to service charges or any prospective landlord and tenant dispute, please contact Lorraine Lancaster in the Civil department on 01702 338338.