Q&As

Where an estate comprises two blocks of flats, one large and one small, and the leases require the tenants to contribute a fixed percentage of the service charge costs for the total service charge of both blocks, if tenants of the small block exercise their right to manage under Part 2 of the Commonhold and Leasehold Reform Act 2002, will the service charge apportionment be adjusted so that the tenants of the small block are required to pay service charge contributions for their block only, or would they still need to contribute to both blocks as per their lease?

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Published on LexisPSL on 11/12/2020

The following Property Q&A provides comprehensive and up to date legal information covering:

  • Where an estate comprises two blocks of flats, one large and one small, and the leases require the tenants to contribute a fixed percentage of the service charge costs for the total service charge of both blocks, if tenants of the small block exercise their right to manage under Part 2 of the Commonhold and Leasehold Reform Act 2002, will the service charge apportionment be adjusted so that the tenants of the small block are required to pay service charge contributions for their block only, or would they still need to contribute to both blocks as per their lease?
  • Appurtenant property

Under Part 2 of the Commonhold and Leasehold Reform Act 2002 (CLRA 2002), long leaseholders of flats in mainly residential buildings (subject to certain exceptions) have the right to take over the management of the building:

  1. irrespective of fault on the part of the landlord

  2. without having to pay compensation

Following a successful right to manage (RTM) claim:

  1. the landlord’s ‘management functions’ (which include services and service charge) are transferred to the RTM company (CLRA 2002, ss 95–96)

  2. the functions taken over by the RTM company will, where appropriate, constitute obligations owed by the company to tenants, and the RTM company will be entitled to the benefit of tenants’ obligations in respect of management functions taken over by the company (CLRA 2002, ss 95–97, 100 and 107)

  3. any obligations which the RTM company may owe to tenants are also treated as owed to the landlord and any third party manager (CLRA 2002, s 97(1))

In Wilson v Lesley Place (RTM) Company [2010] UKUT 432 (LC) (not reported by LexisNexis®), the Upper Tribunal (UT) made clear that the provisions effect a transfer of the rights and duties in the lease. They do not modify them or create new ones. The tenant’s liability is ascertained purely by reference to the terms of the lease

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