“Final and binding” service charge … may not be
The case of Windermere Marina Village Ltd v Wild and others  UKUT 163 [LC] was recently decided in the Upper Tribunal. It looked at a common phrase seen in residential leases, namely that “ the determination by the Landlord’s surveyor shall be final and binding”. The decision said that that wording was void under s27A of the Landlord and Tenant Act 1985.
It is quite common for leases to say that the service charge expenditure should be apportioned between the various leaseholders as determined by the landlord’s agent or surveyor. It is also common for those leases to say that in the event of a dispute his/her determination would be valid and binding upon the parties.
In this case, the leaseholders contested the situation and the Upper Tribunal found in their favour. Which means … the First-tier Tribunal (Property Chamber) now has jurisdiction to substitute its apportionment in place of that determined by the landlord’s surveyor – and to override the provisions of the lease.
So what does this mean for the many landlords – and managing agents – who manage under leases with such a wording? Well, firstly they need to ensure they follow current guidance on such matters – and ensure their determination is fair and equitable in the circumstances existing at that specific property. In smaller residential properties that might be reasonably easy and obvious – but in larger mixed use developments, with flats and shops and offices, the task will be much harder as there are often several views about who benefits most from specific services.
How long will it be before the First-tier Tribunal is flooded with cases questioning “final and binding”?
Case details here > http://www.bailii.org/uk/cases/UKUT/LC/2014/163.html