The Upper Tribunal (Lands Chamber) has replaced a First-tier Tribunal figure based on an estimate with a sum based on the actual cost of seven months of waking watch, for 13 leaseholders at a London block.
Key facts
- Who: The 13 leaseholders and the landlord at 8 Artillery Row, London, and others who meet similar waking watch service charge disputes
- From: 26 October 2026 (date of judgment)
- Source: Avon Ground Rents Limited v Li Jing & Ors [2026] UKUT 412 (LC)
Background
The Upper Tribunal (Lands Chamber) gave its decision in [2026] UKUT 412 (LC) on 26 October 2026, determining the appeal on written representations. Judge Elizabeth Cooke considered an appeal by the landlord, Avon Ground Rents Limited, against a First-tier Tribunal (FTT) decision made under section 27A of the Landlord and Tenant Act 1985.
The case concerned 8 Artillery Row, London, a mixed-use building near Westminster Cathedral with 22 residential units, a small car park and a ground floor retail unit. Thirteen leaseholders were the respondents. The charges were for a waking watch covering fire risk until a new fire alarm system was installed in 2021.
The FTT found the cost payable only in part. It found the alarm could have been installed by the end of July, and that was the only reason it gave for disallowing part of the charge. It ordered the leaseholders to pay "£70,000 representing 70%, or (7 months)" of the original estimated costs, rather than a share of the actual cost.
The question
Could the FTT calculate the chargeable amount from the estimate when the only fault it found was that the waking watch went on too long, and the leaseholders had not raised any issue with the actual cost?
The decision
The Upper Tribunal set aside the £70,000 figure and substituted its own decision. It adopted the leaseholders' figure of £118,934.66 as the amount payable, being the actual cost of seven months rather than the payment for twelve months.
The reasoning
Section 19 of the 1985 Act allows relevant costs to count towards a service charge only to the extent that they are reasonably incurred.
The judge found there was no suggestion from the leaseholders that the monthly cost of the waking watch was itself excessive. Their only criticism was the length of time for which they had to pay. The rate was not in issue.
In refusing permission to appeal, the FTT had said there was no reasonable explanation for the doubling of costs. The judge said this was simply wrong: the costs doubled because they went on for six months instead of 12, as the FTT was aware when it decided.
She held there was no evidential basis on which the FTT could find the actual rate, as well as the time, was not a reasonable cost. The only rational consequence of finding the watch ran too long was to allow a proportion of the actual cost.
The judge also called the FTT's "70%, or (7 months)" wording a puzzle, because seven months is not 70% of a year. The leaseholders' £118,934.66 is seven twelfths of the actual cost of £203,888.10.
The leaseholders applied for an order under section 20C of the 1985 Act to stop the landlord recovering its costs of the appeal through the service charge. If the landlord objects, it should make written representations within 14 days of the decision.
What this means for leaseholders and landlords
- In this case the amount payable followed from the only fault the FTT found, the length of time. The rate paid for the waking watch was not challenged.
- Any party has a right of appeal to the Court of Appeal on a point of law, with permission. An application must be received within one month of the decision being sent to the parties, unless a costs application is made within 14 days of the decision being sent, in which case the one month runs from the date the costs decision is sent.
Sources
- Avon Ground Rents Limited v Li Jing & Ors [2026] UKUT 412 (LC), Upper Tribunal (Lands Chamber), 26 October 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/412