The Upper Tribunal (Lands Chamber) held that three ad hoc service charge demands to two Bow leaseholders were not payable, because they were not made under the half-yearly instalment clause in their leases.
Key facts
- Who: Two leaseholders of flats at 94 Bromley High Street, Bow, and their landlord, Quadron Investments Limited
- From: 18 June 2026
- Source: Quadron Investments Limited v Patrick Philpotts & Anor [2026] UKUT 229 (LC)
In Quadron Investments Limited v Patrick Philpotts & Anor [2026] UKUT 229 (LC), decided on 18 June 2026, the Upper Tribunal (Lands Chamber) considered a landlord's appeal against a decision of the First-tier Tribunal. The respondents were leaseholders of Flats 4 and 5 at 94 Bromley High Street, Bow, London E3 3EG. They had let out their flats under 125-year leases dating from 1991. Their immediate landlord was the appellant.
The leaseholders challenged service charges under section 27A of the Landlord and Tenant Act 1985. On 6 November 2025 the First-tier Tribunal held that three demands were not payable because they had not been made in accordance with the leases:
- £4,568.14 for internal repairs and decorations, demanded on 10 November 2020
- £8,810.10 for major works, demanded on 3 March 2022
- £7,201.64 for external emergency works, demanded on 26 November 2024
The question. Clause 4(b) of each lease required the leaseholder to pay a sixth proportionate part of the costs listed in the Fourth Schedule, "by half yearly instalments on the Twenty-fifth December and Twenty-fourth June". The question was whether the demands had been made in accordance with the leases, so as to make the sums payable.
The decision. His Honour Judge Neil Cadwallader dismissed the appeal. The First-tier Tribunal was entitled to conclude that the interim charges were not rendered payable under the leases.
The reasoning. The Tribunal treated the issue as one of construing the lease. It accepted that charges under clause 4(b) may be demanded at any time, but said the clause governs how and when service charge payments fall due. The landlord had treated the sums as immediate liabilities, separate from the half-yearly instalment system, so the demands were not for sums due under clause 4(b).
The leases made no express provision for ad hoc or interim service charges, and the Tribunal said a court will not readily imply such a term. It found no basis to do so here. The March 2022 demand was also made before the expenditure had been incurred, which the lease does not provide for.
The Tribunal rejected the argument that the leaseholders could have worked out what was due by simple arithmetic, saying it is not the tenant's function to reconstruct the demand. It also rejected an analogy with rent, because the rent provisions are separate from those on service charges.
The Tribunal added that effective demands could have been made later, but they were not.
What this means for leaseholders and landlords
The outcome turned on the wording of these particular leases and these particular demands. Anyone who has received a service charge demand may wish to check what their own lease says about how and when charges become payable, and take advice before any payment deadline passes.
The judgment records that any party may appeal to the Court of Appeal on a point of law, but only with permission. An application for permission must be received by the Tribunal 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 Tribunal's costs decision is sent.
Sources
- Quadron Investments Limited v Patrick Philpotts & Anor [2026] UKUT 229 (LC), Upper Tribunal (Lands Chamber), 18 June 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/229