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Validity of service charge demands (Upper Tribunal (Lands Chamber))

G&O Investments Ltd v Khan [2014] UKUT 96 (LC) (26 February 2014)

This case examines the wording of a lease which contained a detailed ‘service’ clause and forgive me for including it in full here.

“Any demand for payment notice or other documents required or authorised to be given to the Lessee shall be well and sufficiently given if sent by the Lessor or the Lessor’s Agent through the post by registered post or recorded delivery letter addressed to the Lessee at the flat or attached to the door or doors thereto Any demand notice or other document required or authorised to be given by the Lessee shall be well and sufficiently given if left or sent through the post by registered or recorded delivery letter addressed to the Lessor at the last known address or registered office of the Lessor and any demand notice or other document sent by post shall be deemed to have been served forty-eight hours after such posting.”

Despite this fulsome clause the landlord sent service charge demands by ordinary second-class post. The tenant claimed that the lease provided that if demands were served by post then it was a mandatory requirement of the service provision that such postal service must be by registered or recorded delivery post. The First Tier Tribunal agreed with this interpretation and found that the service charge demands were not validly served in accordance with the lease and therefore the demands were rendered invalid and, as a result, no service charge was payable in respect of four service charge years.

The Upper Tribunal (Lands Chamber) did not agree, however, and over-ruled the decision of the Lower Tribunal and held that the provision was not mandatory and did not require documents served by post only to be served by registered post or recorded delivery. The Upper Tribunal found the clause was permissive and did not prevent service by other means.

The correct interpretation of the clause was that if documents were sent by registered post or recorded delivery then they would be “well and sufficiently given”. If all demands had to be given by registered post or recorded delivery, the words “well and sufficiently given if sent” would be unnecessary.

The Upper Tribunal regarded the deeming provision in the final sentence as only relevant where documents were sent by ordinary post. In that sentence, “post” meant ordinary post and did not encompass registered post or recorded delivery (now known as special delivery) where documents are tracked.

The case serves as a reminder, that leases should be read to ensure that service requirements are being observed to avoid rendering demands invalid.

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