Pendreth Lowe Management Limited v Mr & Mrs North 2015 UKUT 0091 (LC)

Sections 47(1) and 47(2) of the Landlord and Tenant Act 1987 (the 1987 Act) require service charge demands to contain the landlord’s name and address.

But what if the demand is made by a management company? This was one of the questions answered by a recent appeal before the Upper Tribunal (Lands Chamber).

The Facts

The claim related to a service charge dispute between the lessees of a holiday village near Falmouth in Cornwall.

There were three parties to the leases: the lessee, the landlord and the management company. It was the management company that had demanded service charges from the leaseholders. The management company’s demands did not contain the name and address of the landlord.

The Law

Section 47 of the 1987 Act states that if the landlord’s name and address is not included on a service charge demand then the service charges are not payable to the landlord.

The Argument

One of the lessees’ arguments for non-payment of the service charges was that the demands did not comply with section 47(1) of the 1987 Act.

Specifically, they argued that since the demands did not include the name and address of the landlord they were not payable to the management company.

The Decision

This argument was rejected by the Upper Tribunal. Judge Martin Rodger QC applied a strict interpretation of section 47. Looking closely at the wording of the section he found that:

  • Section 47 (2) states that if the landlord’s name and address is not included on a demand the service charge is not payable to the landlord
  • Section 47 (4) states that the term ‘demand’ only refers to sums payable to the landlord.
    The meaning of the word ‘landlord’ for the purpose of s.47 was of prime importance because if it did not include a management company the requirement in s.47 to include the landlord’s name and address on a service charge demand would not apply

The meaning of the word ‘landlord’ for the purposes of the 1987 Act can be found in section 60(1) of that Act. It only means ‘the immediate landlord’ and does not therefore include a management company. This is in marked contrast to the wider definition of the term ‘landlord’ in the Landlord and Tenant Act 1985 which includes ‘any person who has a right to enforce payment of a service charge’.

In this case it was the management company and not the landlord to whom the lessees were required to pay the service charge and therefore the demand was still payable even though it did not comply with s.47 of the 1987 Act.

Conclusion

This decision confirms that in a lease of premises under which the lessee is obliged to pay sums to a management company rather than their landlord, the demand for such sums does not have to comply with section 47 of 1987 Act, i.e. it does not have to include name and address of the landlord.

It is important to note that s.47 still applies where a lease is only made between a landlord and a lessee, even where the landlord is represented by a managing agent.

Thus managing agents demanding money on behalf of a landlord must still ensure the demand includes the landlord’s name and address.

Written by James Naylor

Partner, CG Naylor LLP.

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