446 To 450a Ashley Road and Victoria Place, Victoria Road
- The building
- A single four-storey building of about 2017 with twelve flats on the upper floors and commercial premises on the ground floor, the two parts having separate postal addresses only because the flat entrance is at the rear.
- What was applied for
- A determination under section 27A of the Landlord and Tenant Act 1985 and paragraph 5 of Schedule 11 of whether insurance costs, ground rent administration fees and late payment fees were payable, with section 20C and paragraph 5A applications.
- The figures
- Twelve flats over four storeys, built about 2017. Insurance demands of 279.98, 562.50, 459.61 and 473.27 pounds per leaseholder, plus a 50 pound broker's fee and a 15 per cent management fee. Late payment fees of 120 and 150 pounds. Tribunal fees of 337 pounds reimbursed.
- Costs
- Section 20C and paragraph 5A orders made so none of the landlord's costs may be passed to the lessees. Conduct concerns were referred to the Regional Judge.
What Happened
The RTM company acquired the right to manage in 2021. The landlord nevertheless kept insuring the whole building and demanding the premium plus a broker's fee and a 15 per cent management fee from the leaseholders, adding late payment fees when they refused.
What the Tribunal Held
None of the sums demanded were payable. The obligation to insure passed to the RTM company: the commercial premises are part of the same self-contained premises rather than appurtenant property, and the statutory exclusion covers only functions relating solely to non-qualifying units, whereas the obligation to insure relates to the whole building. On the landlord's residual right the tribunal held that own expense means the cost is to be incurred and borne by the landlord, not subsequently recovered from another party, the purpose being to permit the landlord to insure should it wish, but at its own expense. The insurance rent, though named otherwise, continues to fall within the definition of a service charge. The decision also contains an extended section headed Improper Use of AI, in which the judge reproduced Copilot output that invented a Court of Appeal decision with fabricated key points closely resembling the respondent's submissions, found that the representative had cited it only as a result of using AI for his legal research, and held that litigants in person are not exempt from the obligation to check AI output before drafting submissions.
What it means for a block here. Once an RTM company acquires the right to manage a self-contained building, the obligation to insure passes with it. A landlord that keeps insuring anyway does so at its own expense and cannot recover the premium, the broker's fee or a management uplift, whatever the lease calls the charge.