A property tribunal judge ruled in Notting Hill Genesis leaseholders’ favour on all grounds
A landmark ruling that a group of South London leaseholders do not have to pay for a concierge and facilities that was meant for their wealthy neighbours has been upheld.
The Upper Tribunal has upheld a tribunal’s original decision that Notting Hill Genesis (NHG) can’t charge leaseholders at Viridian Apartments, in Nine Elms, for services they can’t access or enjoy.
The ruling comes after more than a decade-long dispute between NHG and the leaseholders, who saw their service charges rise up to £6,200 a year after being told fees for a 24-hour concierge and garden meant for their wealthier neighbours would also be passed onto them.
The leaseholders said they were “fortunate to have strength in numbers” for the “David versus Goliath battle against one of the UK’s biggest housing associations”.
The group of 27 leaseholders live in a block of 38 shared ownership flats on the development, designated as affordable housing, which was built in 2008. The block is separate from the rest of the development with its own entrance, also known as a ‘poor door’.
Despite this, leaseholders were told in 2012 their service charges would rise to include the concierge and maintenance of the communal garden used by the luxury blocks next door, which they could not access.
They maintained their leases showed they did not have to pay these fees, and the head lease between NHG and the development’s management company – the superior landlord, which runs the estate – required the housing association to pay these costs.
It was when this discrepancy was discovered in 2012 that the management company began distributing the extra costs among leaseholders – with NHG collecting the higher service charges.
Leaseholders said they saw service charges rise from £1,700 for a two-bed flat in 2011 to around £6,200 a year – a rise of 265 per cent.
They said service charges for a one-bed flat had risen from £2,136 in 2018 to around £4,770 a year – an increase of 123 per cent.
In July last year, the First Tier Tribunal found NHG was not allowed to recover through service charges money it paid to the management company for parts of the development the leaseholders could not access or enjoy. The judge also dismissed NHG’s counterclaim to vary the leases to recover the charges.
NHG appealed both decisions, which were thrown out by the Upper Tribunal on all grounds.
In a new ruling, Judge Elizabeth Cooke rejected NHG’s argument that the leaseholders’ benefitted from the development being kept in good condition and so should pay towards the facilities as “deeply unattractive”.
Judge Cooke said the “real problem” was that the head lease made NHG liable for services from which the leaseholders could not benefit.
Judge Cooke added: “Why it entered into a lease in those terms is unknown, but its attempt to visit the consequences of that decision on its sub-lessees cannot succeed.”
A separate decision over whether management fees charged to the leaseholders were set too high has been sent back to the First Tier Tribunal to finalise.
‘Further anguish and hardship’
While celebrating their victory, the leaseholders said they remain significantly out of pocket as they will not be able to recover all of the excess charges due to the time that has passed.
They said they have also spent £42,000 in legal costs challenging NHG, with help from public donations.
Leaseholder Janine, who did not wish to provide her surname, said: “The First Tier Tribunal’s decision should have been sufficient to settle the case, but Notting Hill Genesis appealed, resulting in significant legal fees for leaseholders and further anguish and hardship.
“Nonetheless, we are delighted that the tribunal has ruled in our favour twice over, but this saga may not be over if Notting Hill Genesis appeals again. We hope this gives confidence to shared ownership and social housing residents across the UK who suspect they are being overcharged and their service charge is being mismanaged.”
The leaseholders are urging people to review their leases carefully and be alert to applications to vary terms that would allow new service charges to be levied.
They said it is important for people to question service charges for parts of an estate their lease does not cover or they do not have the right to use.
Leaseholders who believe they are being wrongly charged can apply to the First Tier Tribunal (Property Chamber) for a decision over whether a service charge is payable.
A Notting Hill Genesis spokesperson said: “We respect the findings of the tribunal and are carefully considering what this outcome means for us and our residents. We recognise this has been a lengthy and difficult process and do not take that impact lightly. We remain committed to working with residents to ensure service charges are fair, transparent and proportionate.”
Are you experiencing housing issues in London? Email [email protected].
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