Service charge ‘enforceable because tenant waived invalidity’

A landlord has won its appeal over the validity of service charges even though it was late in giving notice.

The court held that it was enforceable because the tenant had “waived the invalidity”.

The case involved Southwark Council and one of its tenants. At the beginning of each financial year the landlord had to make an estimate of the service charge that would be payable and notify tenants.

One of the tenants claimed that the notices were invalid because they were given late.

The First-tier Tribunal found in her favour. It held that one of the notices was late and another was invalid because it had a confusing format.

The Upper Tribunal has now overturned that decision. It held that there was nothing confusing about the notices and they could not be declared invalid for that reason. There was an issue with the notice that was served late, however, the tenant had waived the invalidity by her subsequent actions.

She had agreed to pay the estimated service charge by giving the local authority a charge over her lease, with payment being deferred until the sale of her property. She did not make it clear that she did not agree that the estimated charge was payable. Her actions amounted to a clear statement of agreement to pay. That was an obvious waiver.

Please contact Janice Young if you would like more information about the issues raised in this article or any aspect of commercial property law.