Cases - Westmark (Lettings) Ltd v Elizabeth Peddle and others
Record details
- Name
- Westmark (Lettings) Ltd v Elizabeth Peddle and others
- Date
- [2017]
- Citation
- UKUT 449 (LC)
- Legislation
- Keywords
- Service charges – Landlord and Tenant Act 1985 s.20B(1) – demands for service charges – whether successive 18 month time limit applies in respect of each intermediate landlord
- Summary
-
The appellant intermediate landlord (W) sat in the middle of a chain of leasehold relationships. Above W in the chain was its superior landlord. Beneath W was a management company (which it formerly controlled) and beneath the management company the respondent occupational leaseholders.
A proportion of the costs incurred by the superior landlord was billed successively down a chain of liability until it reached the respondents. At each point in the chain a tenant would have received a demand from its own landlord which it was required to pay and which under the terms of the leases, W and the management company were entitled to seek reimbursement from the tenant below in the chain.
W appealed against the finding of the FTT that the respondents were not liable to pay service charges for accounting periods before 31 May 2014 because more than 18 months had elapsed between the date on which the relevant costs had first been incurred by the superior landlord responsible for the provision of services and receipt by the respondents of demands for payment from their own immediate landlords. The FTT interpreted s.20B(1) of the LTA 1985 as imposing a single 18 month limit from the date on which the cost was first incurred by the superior landlord.
In contractual terms each of the landlords in the chain had a distinct liability of its own. In each case the liability was owed to a different person and was payable at a different time and in different amounts. In the language of s.20B of the LTA 1985, at each level of the contractual chain, a cost was incurred by each landlord in turn when it received a demand for payment of its liability.
The relevant costs taken into account in determining the service charges payable by the respondents were the costs incurred by the management company under its concurrent underlease. There was no reason to treat the costs incurred by the appellant and the management company as if they were costs incurred at any earlier time than when each of those companies received a demand for payment from its superior landlord. In particular there was no reason to treat the relevant costs incurred by the management company as if they had been incurred when the ultimate superior landlord received invoices from its contractors and suppliers. Accordingly, on its proper construction, s.20B(1) of the LTA 1985 had a renewed effect at each level in the chain of liabilities.
The risk to the intermediate landlord of non-recovery was seemingly a more serious defect than the risk to the occupational leaseholder of being called upon to pay for a service long after it was provided, with all the consequent uncertainty in the interim. Both risks would be diminished if payments on account were collected, as would usually occur.
Appeal allowed.