Challenging the cost of utilities recovered through service charges

Landlords and managing agents should take note of an Upper Tribunal (Lands Chamber) decision in favour of a residential tenant who challenged water charges recovered through her service charge. In this case, the landlord had been put on notice that the water charges
were excessive and that something was wrong with the readings provided by the central meter for the building. However, the landlord had failed to adequately address the issue. Usually, with metered utilities, landlords and their managing agents might think that they can rely entirely on the meter reading. This decision indicates that they cannot necessarily do so.

Although this case concerned water charges, this decision could be used in support of challenges to other utilities costs recovered through the service charge where the meter readings are considered to be excessively high. Landlords should also note that, once there was evidence that the charges were unusually high, the onus shifted to the landlord to show that the costs had been reasonably incurred.

If you are concerned that there may be an issue with recovery of service charges on any of the properties that you are involved with, please call Nicola Stewart on Tel: 020 7689 7000.

Senior Partner

Partner - Head of Real Estate

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