Cases - Elysian Fields Management Company Ltd v John Nixon and Another, Imperial Buildings Management Company Ltd v John Nixon
Record details
- Name
- Elysian Fields Management Company Ltd v John Nixon and Another, Imperial Buildings Management Company Ltd v John Nixon
- Date
- [2015]
- Citation
- UKUT 427 (LC)
- Legislation
- Keywords
- Service charges – estimated charges – failure to prepare audited accounts – whether estimated charges no longer recoverable due to failure
- Summary
-
The appellant management companies appealed against decisions of the First-Tier Tribunal that no service charges were payable in circumstances where they had failed to comply with certain clauses under the lease.
Pursuant to clauses 5 and 6 of the 7th Schedule to the lease, the management companies were required to:
- keep proper books of account in relation to its obligations under the Schedule to the lease;
- to prepare accounts that were audited by a competent chartered accountant who was required to certify the total costs of and the proportion payable by the tenant; and
- to serve on the tenant within a month of the date of the certificate, a notice stating the total and proportionate amount specified.
The effect of the First-tier tribunal’s decision was that service of the certificate of compliance with clauses 5 and 6 became a condition precedent to any liability to make a payment. Pursuant to clause 1 of the 5th Schedule, payment was based on the amount estimated to be due and not on the provision of audited accounts.
It was held by the Upper Tribunal that the failure to comply with clauses 5 and 6 of the 7th Schedule to the lease did not suspend the lessees’ obligations to pay the estimated service charges on demand.