Service Charges: Whether Tenants Were Liable for Certain Charges Where Wording in Tenancy Agreements Was Ambiguous (Notting Hill Genesis v Uddin and others – 2025)

Where wording of service charge provisions in a tenancy agreement is ambiguous, were tenants liable for the expenditure demanded?

The background

In Notting Hill Genesis v Uddin and others (Tenants of Endeavour House and Mayflower House) [2025], the respondents comprised 32 assured tenants of flats in two residential blocks known as Endeavour House and Mayflower House in East London. The mixed-use development comprises a total of five blocks containing social housing, private sector housing, commercial and retail space. The appellant housing association is the head leaseholder and landlord under the tenants’ leases.

In an earlier decision, the First-tier Tribunal found that, save for two categories of charges, the leaseholders were liable to the landlord for the costs of services provided between 2016 and 2023. The FTT did, however, conclude that respondents were not liable for the costs of services supplied by the freeholder, for which the housing association was liable under its headlease. The FTT also found that some respondents were not liable for the costs of lift maintenance and servicing works carried out by the housing association.

Issues considered by the Tribunal turned on the wording used to define certain categories of expenditure in the tenancy agreements. Schedules of charges were annexed to tenancy agreements in two different forms, one being a typed or printed list of services and the other a screenshot of a list from an accounting system. The FTT rejected the landlord’s argument that service charges could be recovered as either a “management fee” or under the heading “PSCTP”, which was an acronym used alongside others such as “PSCDOOR”, “PSCFIRE” and “PSCLIFT”.

Where the printed schedule was used, the FTT found that the housing association landlord was not entitled to recover costs of lift maintenance and servicing under a heading of “daily building fabric”. The landlord appealed to the Upper Tribunal.

The decision

The Upper Tribunal dismissed the landlord’s appeal, agreeing with the FTT that the wording used in the tenancy agreements relating to the “management fee” and the “PSCTP” categories was ambiguous. The landlord did, however, succeed on the second issue as to whether tenants were liable for the costs of lift servicing and maintenance.

The appeal considered two issues:

1. Whether the FTT was wrong to conclude that the costs of services provided by the freeholder were not recoverable through the service charge; and
2. Whether the FTT was wrong to conclude that reference to “daily building fabric” was not sufficient as to require tenants to contribute towards the cost of lift maintenance.

With regards to the “management fee” term, the housing association argued that this term was broad enough to encompass the charges in dispute, including some physical tasks, such as maintenance. It was argued that a reasonable person would understand that reference to a “management fee” covered expenses beyond administration and would include matters specifically mentioned in the list, given the context of the development on an estate comprising multiple blocks and common areas. The UT disagreed with this approach, finding that the tenancy agreements contained no consistency, and that the term “management fee” could not be distinguished from other fees, such as a 10% “Admin Charge”. The UT did not believe that a reasonable person would be able to understand what was covered by the “management fee”, nor how it differed from other fees stated.

Further, the UT found that the understanding of a reasonable person about what the “management fee” consisted of would not be enhanced by considering this in the wider context of the estate. The background of the ownership and management of the estate is knowledge held by the landlord and the freeholder, rather than the tenants. The UT summarised by stating that the evidence shows that the charge was described in “obscure and uninformative language”, and agreed with the FTT that relevant tenants were not obliged to contribute to the costs of services provided by the freeholder as a “management fee”.

Turning to the “PSCTP” category, the UT stated in its judgment that “PSCTP” was not an acronym with a recognised meaning, nor something that a tenant would be able to work out. The court referenced the decision in Cardiff Community Housing Association Ltd v Kahar, whereby the Tribunal found that a tenant had been liable for service charges on the basis that information missing from a list could be ascertained by reference to an earlier list of services. The present case turned on similar facts, and the UT found that, although tenants occupying under certain tenancy agreements were liable to pay charges under the “PSCTP” category (specifically those costed in 2009 or 2010), charges costed in years other than 2009 or 2010 were not payable.

Turning to the second issue, the FTT had found that the phrase “daily building fabric” would not be understood by the reasonable reader to include items such as lift maintenance. The UT, however, disagreed and found that “daily building fabric” is capable of including work on any part of the fabric of the building, including lifts. When the original service charges were calculated, lift maintenance was not expressly specified but it could be reasonably inferred that such costs were included in the total service charge sums at the time.

Advice and action for landlords

This decision is noteworthy for landlords and managing agents, emphasising the importance of clear, unambiguous and detailed service charge provisions, including lists of services provided.

It is always a possibility over time that services and tenancy agreements will change, but clear and consistent schedules, with detailed breakdowns, must be maintained to ensure that charges can be clearly understood and therefore recovered from leaseholders.