Housing law in the county court can appear to have a limited range. A typical Possession Claim Online list consists almost entirely of claims founded on rent or mortgage arrears, with perhaps a few involving section 21 of the Housing Act 1988 or antisocial behaviour.
But sometimes a surprise emerges. On opening the 20th file of the morning, the judge may discover a claim for possession against a long lessee with unpaid service charges. He then has to switch attention to a range of different issues, as briefly outlined below. Essentially, the questions are: (i) is the service charge due? (ii) can the landlord rely on that unpaid charge to claim possession?
Does the claimed service charge accord with the lease?
There is no substitute for studying the lease itself, while bearing in mind that this is a heavily litigated area which may already have produced a decision on identical wording.
Has there been consultation? Are the charges reasonable? Have they been demanded soon enough?
The lease is not the end of the story. Long lessees have valuable rights under sections 18-30 of the Landlord and Tenant Act (LTA) 1985. They may try to resist or limit payment on the grounds that they were not consulted before work began (sections 20 and 20ZA), that the work was not done to a reasonable standard, that the charges for it are unreasonable (section 19), or that the demand has been delivered too late (section 20B).
Such disputes can be dealt with by a Leasehold Valuation Tribunal (LVT)or by the court (section 27A(7); Phillips v Francis  L & TR 28). The court may defer to the LVT’s greater expertise in this area by transferring to it that part of the proceedings which raises a question under sections 18-30. It can do so under paragraph 3 of schedule 12 to the Commonhold and Leasehold Reform Act 2002.
Has there been a valid demand?
By section 47 of the LTA 1987, any written demand served by a landlord on a residential tenant for rent or other sums payable under the tenancy must state ‘the name and address of the landlord’. If it does not, then by section 47(2) ‘any part of the amount demanded which consists of a service charge… shall be treated for all purposes as not being due… at any time before that information is furnished’.
The Upper Tribunal (Lands Chamber) recently considered this. It held that ‘the address of the landlord’ must be a place of residence, a place of business, or (if a company) the registered office: Beitov Properties Ltd v Elliston Bentley Martin  UKUT 133. As the landlord had only given the address of its managing agent, the service charge was held not to be due.
Confusingly, section 48 of the LTA 1987 imposes another requirement: a landlord of residential premises ‘shall by notice furnish the tenant with an address… at which notices (including notices in proceedings) may be served on him by the tenant’.
Section 48 is concerned with service, rather than identifying and locating the landlord: the address given can be used for service of a claim form (Civil Procedure Rule 6.8), but need not be a residential or business address. The section 48 notice need only be given once, and does not have to accompany the demand for payment. If section 48 is breached, ‘any rent, service charge or administration charge otherwise due…shall… be treated for all purposes as not being due… at any time before the landlord does comply’. This sanction extends to rent; section 47(2) does not.
A residential service charge demand must also be accompanied by a summary of tenants’ rights and obligations in relation to service charges. Otherwise, the tenant may withhold payment: section 21B(3) of the LTA 1985. The summary must be in a lengthy prescribed form (SI 2007/1257; or, in Wales, SI 2007/3160). Sending a summary after the demand will not work: Tingdene Holiday Parks v Cox  UKUT 310.
How large is the debt? For how long has it been outstanding?
One more hurdle for the landlord. No forfeiture is possible unless the debt exceeds a prescribed amount (currently £350), or includes an amount which has been outstanding for more than a prescribed period (currently three years): section 167 of the Commonhold and Leasehold Reform Act 2002.
Has the service charge been admitted or determined?
If the landlord has got everything right so far, and the tenant has not paid, can the court grant a possession order without more? No. Section 81 of the Housing Act 1996 gives residential lessees a further line of defence. A landlord ‘may not… exercise a right of re-entry or forfeiture for failure by a tenant to pay a service charge’ unless it has been ‘determined’ that the amount of the charge is payable, or the tenant has admitted it. ‘Determined’ means that there has been a final determination by a court, a LVT or an arbitral tribunal. The court should probably consider whether section 81 is satisfied even if the defendant ignores the point: Mohammadi v Anston Investments  EWCA Civ 981 at paragraph 22.
Service of a possession claim against a tenant itself amounts to forfeiture. This step cannot be taken until there has been a determination or admission. So, failing agreement or arbitration, two separate sets of proceedings are needed: the first for a determination; the second to claim possession.
Another problem then arises. The landlord may go to court at the first stage, bringing a part 7 claim for the service charges, and obtaining judgment in default. Would that be a determination? Nobody can be sure. There are conflicting answers in the county court: yes – LB Southwark v v Tornaritis , Church Commissioners v Koyale ); no – Hillbrow (Richmond) v Alogaily .
Landlords therefore tend to use CPR 8 and proceed to a hearing. Many of the debts are below the £5,000 small-claims limit, and not the subject of any complex challenge, but if the landlord succeeds he may submit that part 8 claims are deemed allocated to the multi-track by CPR 8.9(c), so that the costs restrictions in CPR 27.14 do not apply. He may then claim costs far exceeding the amount of the service charge in question, or the amount recoverable after a fully contested small claim of equal value. The court then has to consider what costs the landlord may properly recover.
Although dealing with a claim which had not been allocated, rather than one automatically allocated by CPR 8.9(c), O’Beirne v Hudson  EWCA Civ 52 may be of assistance – particularly the comment at paragraph 16: ‘In making an assessment the… judge is entitled to take account of all the circumstances, including… that the case would almost certainly have been allocated to the small-claims track if it had been allocated.’ After considering all this, the judge may even be pleased to find that his next case involves a disputed notice under section 21(4) of the Housing Act 1988.
District Judge Tim Parker sits at Slough County Court. He is a contributor to Civil Court Service (Jordans)