Was service charge for the replacement of roof reasonable?

An appeal from a decision of the First-tier Tribunal (FTT) – about the reasonableness of a service charge for the replacement of part of the roof of the respondent’s flat – succeeded and the FTT’s decision was set aside in the case of The London Borough of Lambeth v Gerlinde Gniewosz.

The respondent held a long lease of flat 21, 1-51 Bodley Manor Way, and the appellant was the freeholder. The property comprised three blocks of purpose-built flats and was about 40 years old; the respondent was the assignee of a long lease of her one-bedroomed flat.

She made an application to the FTT in June 2018 for a decision about the reasonableness of service charges demanded by the appellant for the years 2013/14 to 2018/19. She challenged the reasonableness of dozens of items in the service charges over those years; the only one in issue in this appeal was the demand for an advance payment for the replacement of part of the roof in 2018/19.

The original roof was zinc, and the appellant proposed to replace it with glass-reinforced plastic (GRP). The total cost was £5,659.64, and the respondent’s share had not yet been decided but was likely to be at most 2.5% of the cost. Before the service charge was demanded a consultation under section 20 of the Landlord and Tenant Act 1985 was carried out.

The Upper Tribunal found that the FTT did not give a sufficient explanation for its decision. It did determine that it did not matter whether this was regarded as a repair or a renewal (while dismissing the possibility of improvement); but it did not say what was the legal test it employed in order to decide whether the proposed replacement roof would be a breach of covenant.

It appeared that the FTT was unimpressed with the GRP replacement. It took the view that zinc would be better as well as longer lived, and that the reasonable leaseholder would be unhappy with GRP. But that went nowhere near to a statement of the legal test and an explanation as to why that test was not met.

The appeal succeeded and the FTT’s decision was set aside, and the matter remitted for a re-hearing.