The Upper Tribunal has upheld a landmark ruling that shared ownership leaseholders at Viridian Apartments in Nine Elms, South London, do not have to pay for a concierge and facilities intended for wealthier neighbours, in a decision described as a 'David versus Goliath battle'.
Ruling details
Judge Elizabeth Cooke rejected Notting Hill Genesis's (NHG) appeal on all grounds, affirming that the housing association cannot recover costs for services the leaseholders cannot access. The leaseholders, who live in a separate block with its own entrance—often called a 'poor door'—saw service charges rise from £1,700 for a two-bed flat in 2011 to around £6,200 a year by the time of the dispute, a 265% increase. For a one-bed flat, charges rose from £2,136 in 2018 to about £4,770, a 123% jump.
Background of the dispute
The 27 leaseholders live in a block of 38 shared ownership flats built in 2008, designated as affordable housing. In 2012, they were told their service charges would include a 24-hour concierge and communal garden maintenance for the luxury blocks, which they could not use. Their leases did not require these payments, but the head lease between NHG and the management company made NHG liable. When this discrepancy was discovered, the management company distributed the extra costs to leaseholders, with NHG collecting higher charges.
Legal battle
In July last year, the First Tier Tribunal ruled NHG could not recover these costs. NHG appealed, but the Upper Tribunal dismissed the appeal. Judge Cooke called NHG's argument that leaseholders benefited from the development's upkeep 'deeply unattractive', noting that the head lease made NHG liable for services from which leaseholders could not benefit. She added: 'Why it entered into a lease in those terms is unknown, but its attempt to visit the consequences of that decision on its sub-lessees cannot succeed.'
Leaseholder response
Leaseholder Janine said: 'The First Tier Tribunal’s decision should have been sufficient to settle the case, but Notting Hill Genesis appealed, resulting in significant legal fees for leaseholders and further anguish and hardship. Nonetheless, we are delighted that the tribunal has ruled in our favour twice over, but this saga may not be over if Notting Hill Genesis appeals again.' The leaseholders spent £42,000 in legal costs, supported by public donations, and remain out of pocket as they cannot recover all excess charges due to time limits.
Impact and advice
The leaseholders urge others to review leases carefully and question service charges for parts of an estate not covered by their lease or that they cannot use. A Notting Hill Genesis spokesperson said: 'We respect the findings of the tribunal and are carefully considering what this outcome means for us and our residents. We recognise this has been a lengthy and difficult process and do not take that impact lightly.' A separate decision on management fees is pending at the First Tier Tribunal.
