The Upper Tribunal (Lands Chamber) held on 29 April 2026 that £1,050 of guest room charges held by the landlord of a retirement block was not an "uncommitted service charge" payable to the block's right to manage company, because of the wording of the lease.
Key facts
- Who: Leaseholders, right to manage (RTM) companies and landlords involved in disputes over uncommitted service charges, where the answer depends on the wording of the lease
- From: 29 April 2026
- Source: Churchill Retirement Living Limited v Hampton Lodge RTM Company Limited [2026] UKUT 164 (LC)
Hampton Lodge, in Sutton, Surrey, is a block of 39 retirement flats. Leaseholders must be 55 or over. The freeholder, Churchill Retirement Living Limited, provides a guest room, which the parties and the First-tier Tribunal (FTT) called a "guest suite". Leaseholders can pay for visitors to stay in it.
The sample lease gives leaseholders the right to use the guest bedroom, but only on payment to the landlord of "the charges for such use which the Landlord may in its discretion from time to time impose".
Hampton Lodge RTM Company Limited acquired the right to manage under the Commonhold and Leasehold Reform Act 2002. It applied to the FTT under section 94 of that Act for a determination of the uncommitted service charges the landlord had to pay to it. The FTT decided that the landlord had to credit the guest room income to the service charge account. The landlord appealed against that one aspect of the decision, and the appeal was decided on written representations.
The question
Does the lease require the landlord to credit the guest room fees to the service charge, so that the money passes to the RTM company?
The decision
Judge Elizabeth Cooke allowed the appeal. She held that, under this lease, the £1,050 held by the landlord was not an uncommitted service charge and was not payable to the RTM company. The FTT's decision was set aside on this issue only.
The reasoning
The judge said the relevant lease paragraph contains no obligation on the landlord to credit guest room charges to the service charge, and that its meaning is clear. There was no ambiguous wording to construe. She said service charges are not a special case, and there is no rule that service charge wording is read against the landlord.
The RTM company also argued for an implied term. The judge said a term can be implied in a contract only if it is necessary to give it business efficacy, or is so obvious that it goes without saying. The lease works without it, and the charge is payment for use of the landlord's property. The courts have consistently rejected the idea that a term can be implied because it is fair.
She also noted that the lease expressly requires insurance moneys to be credited to the service charge where relevant. Where the parties intended something belonging to the landlord to be paid for the tenants' benefit, she said, they made express provision.
The judge added that the FTT had not been asked to decide, and had no jurisdiction in that application to decide, who will be entitled to the guest room fees in future.
What this means for leaseholders and RTM companies
This decision turns on the wording of the lease in question. Leaseholders and RTM companies should check what their own lease says about charges for communal facilities and who receives them. Anyone in a dispute over uncommitted service charges should get advice before any deadline passes.
Any party may appeal to the Court of Appeal on a point of law, but only with permission. An application for permission must generally 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 of the Tribunal's decision on costs.
Sources
- Churchill Retirement Living Limited v Hampton Lodge RTM Company Limited [2026] UKUT 164 (LC), Upper Tribunal (Lands Chamber), 29 April 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/164