Council sees off Upper Tribunal challenge over liability for repairs to district heating system

The London Borough of Southwark has defeated a challenge in the Upper Tribunal (Lands Chamber) over a leaseholder’s liability to pay for repairs to a district heating system.

Resident Clarissa Yambasu had unsuccessfuly contested at the First-Tier Tribunal (Property Chamber) a service charges demand for £4,375.95 made in February 2016 for her share of major works at the black of flats where she lives on her liability.

A clause in her lease states that Southwark will provide central heating and hot water with the lessee to pay “a fair proportion” of the cost of providing the services and their insurance, maintenance and repair. The lease also prevents lessees from disconnecting their flat from the district central heating system without Southwark’s consent.

Ms Yambasu claimed that the system was too old to function economically or to be repaired or maintained, and also that the flats pay too much for heating because the system serves a number of commercial properties as well which, she says, do not pay for it.”

Ms Yambasu argued that the section 20 consultation notice was not served correctly, that the charges had not been fairly allocated and that the division of costs between the leasehold properties disregarded the size of the flats.

The FTT had rejected all these points but she gained permission to appeal that decision on three grounds: that the FTT failed to consider whether the consultation requirements had been complied with; the apportionment was unfair as leaseholders were paying to heat other properties owned by Southwark; and that service charges were not reasonably incurred.

At the Upper Tribunal, Judge Elizabeth Cooke rejected these arguments, saying that in her judgment the consultation requirements had been met and that the FTT had correctly calculated the apportionment between flats.

She said it was understandable that Ms Yambasu thought a new heating system was needed and so spending the service on the existing one was misguided, but it was “abundantly clear that for [Southwark] now to abandon the old system would mean that it would have wasted the work done between 2013 and 2015.

“In the light of that background, which was well-known to the parties, it is possible both to understand Ms Yambasu’s continuing frustration but also to understand that this further cost, building on the earlier work of renewal, was reasonably incurred by [Southwark].

“As to whether it was reasonable in terms the actual amount, there was no evidence before the FTT that the estimate was unreasonably expensive.”

Judge Cooke added that Southwark had reasonably refused Ms Yambasu’s request to disconnect from the heating system as “the disconnection of one resident places a greater burden on the others, and that there would in fact be more work needed to make disconnection possible, which of course residents would have to pay for”.

Mark Smulian