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KNAPPER AND OTHERS v FRANCIS AND FRANCIS[2017] UKUT3 (LC): Reasonableness Of Interim Service Charge Demands

By the time of the Tribunals determination it was known that certain of the expenditure included within the interim demand was not to be incurred. The FTT rules that it should ignore this fact in determining whether the interim demand was reasonable. On the facts the FTT determined that at the time the interim charges were calculated and demanded it was reasonable to include all of the sums it did although the FTT made some adjustment as to the reasonableness of the sums claimed.

The leaseholders appealed submitting that the FTT should have considered the fact that by the time of the application it was known some of the expenditure was not going to have taken place.

Decision

The Upper Tribunal dismissed the appeal.  It determined that on the evidence it was clear the freeholder on the payment date considered that the sum claimed was what they required to cover anticipated expenditure. The reasonable sum did not then become retrospectively unreasonable once it became clear the expenditure was avoided.

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