Service Charge Challenge Is Possible

The recent decision in Gateway Holdings (BWV) Limited v McKenzie may be useful to those wishing to challenge residential service charges payable by long leaseholders in some circumstances.

In the case, Mrs McKenzie inherited her father’s leasehold interest in a flat owned by Gateway.

She applied under s27A Landlord and Tenant Act 1985 to the First Tier Tribunal (Property Chamber) to challenge serviced charges demanded from her late father.  Gateway sought to strike out her claim, arguing that she had not been a tenant during the period in question.   The First Tier Tribunal refused to strike out the claim.  Gateway appealed to the Upper Tribunal.

Ultimately the Upper Tribunal upheld the decision of the First Tier Tribunal, finding that a leaseholder was entitled to apply for a determination in respect of sums paid by a predecessor in title.

This is a decision that may be useful to those who inherit leasehold interests.  It is hard to see how it will benefit leaseholders if they challenge service charges paid by any predecessor in title otherwise as any overpayment would be due to the previous leaseholder.

If you need any advice, please contact our Specialist Team.