Close Up March 18

EDITORIAL
Charges Must Be Reasonable
to be Reasonably Incurred
– Says legal disputes expert Gary Beecham
The leases relating to tenancies in blocks of flats and
similar buildings will normally require the tenants to make
a reasonable contribution towards the ‘estate’ costs of the
property. The estate costs are those which apply to the whole
of the premises or are for the benefit of all the tenants. Typical
estate costs will be those for the cleaning of common areas,
lift maintenance, buildings insurance etc. In addition, the
landlord will have the right to recover costs for repairs and
so on.
It is usual for such costs to fall on the tenants only when they
have been ‘reasonably incurred’ by the landlord.
A recent case dealt with the situation in which a landlord
sought to charge tenants for expenses which, though they
may have been reasonably incurred, were thought to be
unreasonably high. The 16 tenants of a block of flats were faced
with demands for payment of their relevant contributions
towards a block insurance policy. It is reasonable for tenants to
be required to make such payments but the premium payable
was some four times that which could be obtained in the open
market for similar cover.
The tenants went to court to oppose their liabilities, and the
Upper Tribunal (UT) agreed with them that the amount charged
was not reasonable. The landlord advanced no reason why
there should be such a large discrepancy between the premium
it incurred and the market premium and as a result the UT took
the view that the expense was not reasonably incurred and
could not be passed on in full to the tenants.
This article is for general interest and does not constitute
legal advice. For expert advice on any dispute contact Gary on
020 8370 2870 or by email at garybeecham@vanderpumps.co.uk
020 8367 3999
www.vanderpumpandsykes.co.uk
Lough Point, 2 Gladbeck Way, Enfield, Middlesex EN2 7JA