A recent High Court decision highlights the clarity required when it comes to service charge provisions and acts as a sage reminder not to use general ‘catch all provisions’ where it can be avoided.

In Freehold Managers (Nominees) Limited v Celestia Management Company Ltd [2017] EWCH 1281 Ch the Claimant was the head leasehold owner of a development of 8 blocks of flats which included a bridge, waterfront pathways and an access road. The Claimant was required by the head-lease to pay for the repair and maintenance of these access ways through service charge provisions.

The Defendant in the case was the management company responsible for the provision of services at the development. The tenants of the individual flats paid the Defendant for services via standard service charge provisions contained in their subleases, to which the Defendant was a party. There was a right in the subleases for the tenants to use the access ways on the development but there was no express provision in the subleases requiring the Defendant to pay or contribute towards the service charge payable by the Claimant for their upkeep.

The subleases did, however, contain a general requirement that the Defendant was obliged to “pay all existing and future rates taxes duties assessments charges impositions and outgoings whatsoever whether parliamentary parochial local or of any other description which are now or during the said term shall be assessed charged or imposed or payable on or in respect of the entirety of the Development or its curtilage or Common Areas.” The Claimant argued that this catch all provision covered the maintenance of the access ways.

The Judge disagreed and found for the Defendant management company holding that the provision the Claimant sought to rely upon was insufficiently clear to bring home to a tenant that he would be liable to contribute towards the upkeep of the access ways.

Practical Points

• Do not use a general ‘catch all’ provision where you know a specific item is to be covered;

• Extra care should be taken when dealing with leases/subleases to individuals rather than to companies – a higher level of clarity is often required for individuals when it comes to legal documents.

by Siân Westby
Solicitor (Litigation)