Freeholders: Dealing with Disputes

The First-tier Tribunal (FtT)

The First-tier Tribunal (FtT) of the Property Chamber has jurisdiction to deal with disputes concerning service charges, where applicable. If you propose the service charge budget, which you feel might be subject to challenge, it is possible to make an application to the FtT in advance of setting the budget to have the proposed expenditure declared as being reasonable within the meaning of the service charge legislation.

In addition, if you are involved in a claim to grant a lease extension of the sale of freehold interest and the price cannot be agreed between the parties, then the FtT has jurisdiction to determine the price that will be paid.

The FtT will require expert evidence and will be able to (if it wishes) provide its own expert view as to the price to be paid. Where an application is made to the FtT, costs can only be awarded in certain limited circumstances. In general, where a leaseholder takes a matter to the FtT, either on a question of service charge or valuation, then both parties must pay their own costs.

There are certain rules relating to potential limits on the ability of a freeholder to recover costs through the service charge budget (in relation to service charge applications) and these should be considered carefully if you are proposing to deal with a challenge made to service charge budget by the flat owners.

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ALEP was set up in 2007 in response to concerns raised by owners of leasehold properties who wanted reassurance that the people they were dealing with were reputable. Freeholders also require this reassurance.