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VALIDITY OF LEASE WORDING – SERVICE CHARGE

The Upper Tribunal has held in the case of Windermere Marina Village Ltd v Wild and others [2014] UKUT 163 [LC] that the commonly encountered provision in a lease that “ the determination by the Landlord’s surveyor shall be final and binding” was void under s27A[6] of the Landlord and Tenant Act 1985.

The clause in question provided for the service charge apportionment to be determined by the surveyor and that his determination would be valid. The tenants contested this and the Upper Tribunal found in favour of the tenants – with the effect of that decision meaning that the First Tier Tribunal has jurisdiction to substitute its apportionment for that of the landlord’s surveyor and override the provisions of the lease.

As this wording is very common in leases then landlords with existing leases which provide for third parties’ determination to be ‘final and binding’ then they will need to ensure that any apportionment follows current guidance but still be aware that that alone is not a safeguard that their apportionment will be accepted by tenants or by the First Tier Tribunal as a result of the above case. In mixed use developments in particular this could cause problems as there is often a valid case for differences of opinion over the benefit of services for different sets of users.

For general and specific advice on service charge disputes please contact our Litigation Disputes Team on 0333 0 300 200.

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