Upper Tribunal hears appeals on service charges for services Viridian leaseholders cannot use

The Upper Tribunal (Lands Chamber) considered two appeals by Notting Hill Home Ownership Limited against First-tier Tribunal decisions on service charges and lease variation, affecting leaseholders in a Battersea block.

Background

In [2026] UKUT 235 (LC), decided on 30 June 2026, Judge Elizabeth Cooke dealt with two appeals brought by Notting Hill Home Ownership Limited (NHHO) against decisions of the First-tier Tribunal (Property Chamber). The respondents were 27 leaseholders of Block V1, Viridian Apartments, Battersea Park Road, London SW8.

NHHO's headlease requires it to pay service charges calculated by reference to all eight blocks of Viridian Apartments. These include the costs of services its own sub-lessees are not allowed to use, such as the garden and the concierge. NHHO wanted to pass those charges on to the leaseholders.

The First-tier Tribunal made two decisions. On the leaseholders' application under section 27A of the Landlord and Tenant Act 1985, it decided that most of the charges were not payable because they were for services the leaseholders could not access or enjoy. The second decision concerned NHHO's application under section 35 of the Landlord and Tenant Act 1987 to vary the leases on the ground that they did not make satisfactory provision for payment of service charges.

The question

The central issue was whether the sub-leases allow NHHO to recover what it pays under the headlease. NHHO argued that the sub-leases contained an obvious mistake, and that the term "Estate" should be read as meaning "the Development" as defined in the headlease. This is known as rectification by construction. It also argued that leaseholders benefit from the whole development being well maintained.

The First-tier Tribunal's reasoning

The First-tier Tribunal found that the sub-leases do not permit NHHO to recover the sums it pays under the headlease. It said they were poorly drafted but contained no clear mistake: "the leases do make sense and are not an obvious nonsense".

It noted that the sales particulars made clear that certain services, in particular the concierge and the gardens, were not included. It found the parties' intention on entering the shared ownership sub-leases was to maximise affordability by restricting the services the tenants could access and pay for, so the Estate was limited to Block V1.

It also found the management charges too high and said they should be reduced to reflect the limited service. It made orders under section 20C of the 1985 Act and paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, preventing NHHO from recovering its costs of the proceedings as service or administration charges.

The appeal

NHHO had permission to appeal on five grounds. They included that the First-tier Tribunal failed to have regard to the principle that the fact a tenant derives no benefit from a service is irrelevant to whether they are contractually bound to pay for it. NHHO also challenged the costs orders and sought clarification of the management fees decision.

NHHO accepted that leaseholders would in principle be liable for services they cannot access, such as the communal gardens, although its barrister conceded there might be an issue over how much they must pay.

Sources

• Notting Hill Home Ownership Limited v N Samoail, R Issa & Ors, [2026] UKUT 235 (LC), Upper Tribunal (Lands Chamber), 30 June 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/235