The Upper Tribunal (Lands Chamber) allowed an appeal on 29 June 2026 and sent a section 27A service charge dispute over seven flats built in leased airspace back to the First-tier Tribunal for decision.
Key facts
- Who: Parties to service charge disputes under section 27A of the Landlord and Tenant Act 1985, particularly where a lease of airspace has been used to build new flats
- From: 29 June 2026 (date of judgment)
- Source: Mare Street Ltd v Theowal Limited [2026] UKUT 244 (LC)
Mare Street Ltd, the appellant, held a lease of the airspace above Northside Studios, Andrews Road, London E8, granted by Theowal Ltd on 19 May 2022. Under a development agreement it built seven flats in that airspace, and practical completion was certified on 26 October 2023.
On 1 April 2025 Theowal issued service charge demands totalling £8,615.01 for 2023 and 2024. Mare Street applied to the First-tier Tribunal, Property Chamber on 8 June 2025 for what it called a "declaration" that it was not liable to pay. On 11 November 2025 the First-tier Tribunal struck the application out without a hearing, saying it had no jurisdiction.
The question
The only issue was whether the First-tier Tribunal was entitled to strike out the application under section 27A. That section allows an application to decide whether a service charge is payable and, if so, by whom, to whom, how much, when and how.
The decision
Martin Rodger KC, Deputy Chamber President, allowed the appeal in the Upper Tribunal (Lands Chamber). The application was sent back to the First-tier Tribunal for determination. The parties agreed the First-tier Tribunal had misunderstood the facts: it had recorded it as common ground that no development had occurred in the airspace, when the flats had in fact been built.
The reasoning
The Upper Tribunal described the decision as obviously wrong, an error of law based on a misunderstanding of the facts.
The respondent argued that the tribunal could not hear the case unless the flats were dwellings during the period charged, 15 October 2023 to 18 June 2024. The Upper Tribunal accepted that the dwelling requirement is tested against the period to which the determination relates, applying JLK Ltd v Ezekwe & Ors [2017] UKUT 277 (LC). But it said a lack of clarity about the sequence of events did not remove jurisdiction.
Where a claim is struck out summarily and depends on disputed facts, the tribunal looks at the case on paper and assumes the facts relied on by the applicant are true. Here the only evidence was a witness statement saying the flats had been completed and sold shortly after practical completion. The applicant was entitled to the benefit of the doubt.
The respondent also argued that questions such as whether the appellant's obligations under the development agreement had ended were beyond the First-tier Tribunal's jurisdiction. The Upper Tribunal rejected that. If a prior question of law or fact must be decided before it can be worked out whether a service charge is payable, the tribunal can decide it under section 27A. That another court or tribunal might also decide the same question does not remove its jurisdiction.
It accepted that the First-tier Tribunal cannot decide every matter the applicant raised, because it cannot usefully address a question that is not a necessary step towards deciding whether a service charge is payable. But asking for something outside its powers is no reason to strike out the whole application. Nor is it a reason that an unrepresented party used the word "declaration".
The Upper Tribunal said this case could not be determined without proper consideration of the facts. Because the sums were modest, it suggested the parties try to agree. If they cannot, they should apply to the First-tier Tribunal for directions within one month of the decision.
What this means for tenants and landlords
- In this case, an application was not properly struck out merely because some of what it asked for lay outside the tribunal's powers.
- On a strike-out of a case that depends on disputed facts, the tribunal assumes the facts relied on by the applicant are true.
- Whether the property includes a dwelling can matter to jurisdiction. It is tested for the period the charges cover, not at the date the lease was granted.
- The tribunal can decide a prior question only where it is a necessary step towards deciding whether a service charge is payable.
- The Upper Tribunal noted that where sums are modest, parties may find agreement a better use of time and resources.
- Any party can seek permission to appeal to the Court of Appeal on a point of law. The application must generally be received within one month of the decision being sent to the parties. If a costs application is made within 14 days of the decision being sent, the one month runs from the date the costs decision is sent. Anyone facing a time limit should get advice before it passes.
Sources
- Mare Street Ltd v Theowal Limited [2026] UKUT 244 (LC), Upper Tribunal (Lands Chamber), 29 June 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/244