South London leaseholders have won a legal battle to prove they do not have to pay service charges for a concierge and other facilities used by their wealthy neighbours.
A group of 25 leaseholders at Viridian Apartments, in Nine Elms, brought the tribunal against Notting Hill Genesis (NHG) in May as part of a dispute over the fees, which has lasted more than a decade. Leaseholders in affordable housing at the development have seen bills rise as high as £7,000 a year to cover a concierge service and garden meant for wealthier neighbours.
Jennifer Docherty, 47, who led the case on behalf of the leaseholders, said: “This is the best outcome we could have hoped for, so I’m really happy with it, but it’s a very short-lived joy because now you realise we won the case but there’s so much more to do – this is just the tip.”
The residents are still unclear exactly what the ruling means for what they do and don’t have to pay.
The leaseholders, who live in a block of shared ownership flats on the development, which was built in 2008, were told in 2012 their service charges would rise to include the 24-hour concierge and maintenance of the communal garden used by the luxury blocks next door, which they could not access.
They eventually saw their annual fees rise from around £80 for a one-bed flat and £105 for a two-bed when they moved in, to around £5,000 for a one-bed or £7,000 for a two-bed.
They maintained that their leases showed they did not have to pay these fees, and the lease between NHG and the development’s management company – the superior landlord, which runs the estate – required the housing association to pay these costs. When the discrepancy was discovered in 2012, the management company began distributing the extra costs among leaseholders – with NHG collecting the higher service charges.
The leaseholders disputed the charges, maintaining that NHG’s “mistake” in signing a “bad deal” with the management company should not be passed on to them.
They previously described the fees to the Local Democracy Reporting Service (LDRS) as a “second mortgage” which, on top of rising rents and mortgage rates, were unbearable. They added they were left with no choice but to pay the service charges in protest to avoid their homes being repossessed.
Tribunal rules in their favour
Judge Tagliavini has now ruled in leaseholders’ favour, after a First Tier Tribunal took place over two days in May. The leaseholders said they took NHG to tribunal as the housing association made is so difficult to challenge the service charges.
The judge 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. She said sales documents made it clear residents of the block were not originally allowed access to the concierge or communal gardens.
The block is separate from the rest of the development with its own entrance, also known as a ‘poor door’, and residents said they were only given full access to the main entrance with the concierge leading into the communal garden late last year. They described this limited access as inconvenient as the development was not designed with this in mind, and stressed they ultimately did not want to use or pay for these services – in line with their leases.
Judge Tagliavini found the leases only allowed NHG to recover the costs of repairing, maintaining and providing services directly to the block the affordable homes are located in. She said the leases did not allow the housing association to recoup the costs of the concierge, maintenance of communal areas and other costs only related to the development.
The judge also dismissed NHG’s counterclaim to vary the leases, which it filed in case she found it had not been allowed to recover the fees so far. She said the fact NHG may have entered into a “poor bargain” with the management company did not mean the subleases should be varied.
Ms Docherty told the LDRS that while the judge’s ruling was the “best outcome” possible, the group must now confirm what they do and do not have to pay and write to NHG about next steps. They are also waiting to find out whether the housing association will appeal the judge’s decision.
She added: “It would just be great to tell people of the case, how we won it and if there’s anyone else that could use it as an example to help them in their situation. That’s exactly the outcome that we had wished for at the beginning.”
A Notting Hill Genesis spokesperson said: “We acknowledge the decision of the tribunal and are working through implications and our next steps. As we do this, we will continue to engage fully with our leaseholders and the leaseholder-run management company.”
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