One of our most notable cases involves a leaseholder (our client) of a flat who was subject to a service charge by the freeholder landlord (the defendant), a large property company. Our client was subletting his flat to another and noticed a drastic increase in the annual service charge cost which was justified on the basis of works expected to be conducted on the exterior of the building. The service charge was based on all completed works, scheduled works and anticipated works to the internal, external and common parts of their building.
Our client refused to pay the higher premium on the grounds that the no works had been conducted to his flat. Instead, despite numerous complaints, the freeholder had omitted to repair our client’s flat, allowing its condition to deteriorate significantly. The walls on the outside of the building had visibly cracked allowing moisture into the flat and causing further cracks to the flat’s interior wall, severe damp and communal pipes to rupture. Our client had done his utmost to repair and maintain the building himself at his own expense for his tenant’s benefit, despite the fact that the freeholder was actually contractually responsible for maintenance and repair of the building.
Ultimately our client decided to sell the flat however, the freeholder refused to permit the sale, demanding that our client pay all unpaid service charges before selling. Our client therefore sued the Landlord for breach of covenant claiming damages, including the cost of all repair work carried out by our client.