25 October, 2019
It is common for tenancy agreements to require a tenant to pay a service charge to its landlord in return for services and maintenance of the property and communal areas. However, at times, there can be disparity between the services provided by the landlord and the service charge that is paid by the tenant.
One such situation was considered recently in the appeal case of Curo Places Limited v Anthony Pimlett  UKUT 130 (LC). This case considered whether a clause contained within the tenancy agreement allowed the landlord to provide additional services and charge the tenant for the same through the service charge that formed part of his tenancy agreement.
In the instant case, Mr Pimlett had been granted a tenancy agreement by Somerset Housing Trust in 2008. Under the terms of this agreement, Somerset Housing Trust agreed to provide specific services with Mr Pimlett reciprocating payment via the service charge for the services provided. Although grounds maintenance did not form part of the specific services contained within the tenancy agreement, Somerset Housing Trust nonetheless carried out grounds maintenance without an obligation placed on Mr Pimlett to pay for such service.
Following the merger of three housing associations, which included Somerset Housing Trust, Curo Places Limited, became the landlord of Mr Pimlett's property. Curo Places took the view that providing grounds maintenance for no extra charge could potentially pose problems for them and therefore proceeded to amend the wording in their tenancy agreements for future tenants, thereby making grounds maintenance a chargeable service. A few years later, Curo Places proposed to vary all existing tenancy agreements to include a clause that would mean provision of grounds maintenance would attract an additional service charge. The clause read as follows: "the Trust agrees to provide the services (if any)… for which you pay a service charge providing that, subject to consultation with the tenant it may provide extra services if it believes that it would be useful".
For Mr Pimlett, the above proposal would have meant that he would now be required to pay a service charge for grounds maintenance, a service that he had previously received free of charge. Mr Pimlett objected to the proposal put forward by Curo Places and took the matter to the First Tier Tribunal (FTT) challenging Curo Places as to whether an additional charge was payable. The FTT ruled that Curo was not entitled to the additional charge, as the wording of the clause was interpreted as providing 'extra' services. Mr Pimlett however was already receiving the grounds maintenance service at no additional cost and therefore it was not deemed an additional or extra service.
Following this ruling, Curo Places appealed the decision to the Upper Tribunal contending that the clause within the tenancy agreement was to be interpreted so as not to prevent the landlord charging for services which were not specifically referred to in the tenancy agreement. The Upper Tribunal found no merit in Curo's argument and followed the decision made in the FTT. In its judgment, the Upper Tribunal indicated that whilst the service was useful to a tenant not already receiving grounds maintenance services and therefore liable to pay the extra service charge, to those tenants like Mr Pimlett who were already enjoying the benefit of grounds maintenance, a financial burden would have been imposed on them.
This judgment indicates that the Courts are unlikely to rule in favour of landlords who unilaterally amend the terms of existing tenancy agreements which imposes financial burden on its tenants.
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