Upper Tribunal sets £1,250 service charge for poor fire report after FTT error

The Upper Tribunal (Lands Chamber) held that a First-tier Tribunal should have let a Bermondsey Street landlord answer a point it raised itself, and fixed £1,250 as the recoverable cost of a fire report.

The Upper Tribunal (Lands Chamber), in [2026] UKUT 96 (LC), decided an appeal by a freeholder against a First-tier Tribunal (Property Chamber) decision on service charges. Judge Elizabeth Cooke decided it on written representations.

Background

The appellant, 214 Bermondsey Street Limited, owns the freehold of the building. The respondents are the long leaseholders of its three flats. The ground floor is commercial. The building was converted in about 2011, and the back and the balconies were clad in wooden cladding. It is only 9.5 metres high, so the Building Safety Act 2024 does not affect it directly. The works were nonetheless carried out with the dangers of combustible cladding in mind.

In August 2024 the landlord asked the First-tier Tribunal to decide whether the 2023-24 service charges were payable. Under section 19 of the Landlord and Tenant Act 1985, a service charge is payable only so far as the cost was reasonably incurred. Four items remained in dispute. They included £1,500 (£1,250 plus VAT) for an inspection and EWS1 report from one contractor, and £3,240 (£2,700 plus VAT) for a fire risk report from another, Assessed Risk. Only £2,700 of the second was sought through the service charge.

The question

The appeal turned on the Assessed Risk report. The First-tier Tribunal had reasoned that the full cost could not be recovered because it had not been shown that instructing a second contractor was reasonable. The questions were whether it could decide that point without hearing from the landlord, and what sum was then payable.

The decision

The Upper Tribunal allowed the appeal on grounds 1, 2 and 3. It set aside the First-tier Tribunal's decision at its paragraph 25. It substituted a finding that £1,250, including VAT, was reasonably incurred on the Assessed Risk report and can be recovered in the 2023-24 service charge.

The reasoning

The leaseholders had not complained about the choice of contractor. The First-tier Tribunal raised the point itself, and the issues in its directions did not include it. The Upper Tribunal held that it ought to have given the landlord an opportunity to respond. The landlord said the first contractor lacked the experience and qualifications needed after the legislation changed. The leaseholders did not challenge that explanation on appeal.

The First-tier Tribunal's finding that the report was of very poor quality was not appealed, so it stood. That Tribunal had noted that the report identified the wrong block and gave "stay put" advice contradicted elsewhere in the same document. The Upper Tribunal said the landlord acted reasonably in obtaining the report, even if its conclusion was obvious, because it justified remedial action. It said it had no power to require the report to be amended, and it did not accept the leaseholders' arguments about VAT. Without making new findings of fact, it set the recoverable sum at £1,250.

Any party may apply for permission to appeal to the Court of Appeal on a point of law. The application must be received within 1 month of the decision being sent to the parties, subject to the rule on costs applications.

Sources

• 214 Bermondsey Street Limited v Crispin Corfe & Ors [2026] UKUT 96 (LC), Upper Tribunal (Lands Chamber): https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/96