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Can a leaseholder make an application to challenge the reasonableness of service charges whilst continuing to make payment(s) towards them?

Peter Cain v Islington London Borough Council (2015) UKUT 542 (LC)

Section 27A(5) of the Landlord and Tenant Act 1985

The Upper Tribunal considered the meaning and effect of Section 27A(5) of the Landlord and Tenant Act 1985 following a challenge by a leaseholder as to the reasonableness of service charges that had been paid during a 12 year period.

The Upper Tribunal dismissed an appeal by a leaseholder challenging the reasonableness of services charges he had paid over a twelve year period. It was held that a leaseholder is not entitled to make an application to challenge the reasonableness of service charges, if a series of payments have been made without protest over a period of time.

Multiple payments made without challenge

The case has established that the conduct of a leaseholder must be sufficiently clear, to imply or infer that the payment of service charges are agreed or admitted. Due to threat of forfeiture by a landlord, the making of a single payment towards service charges by a leaseholder (who will want to preserve their home) is not sufficient on its own to find that there is agreement or admission. There must be other facts or circumstances such as multiple payments being made (without challenge) over a period of time to imply agreement or admission by the leaseholder of the service charges, especially if the period of time is a long one.

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