Determination of Service Charge: Whether lift repairs could be charged to assured tenants (Anchor Hanover Group v Cox – 2023)

Where repairs are made to an essential lift at a retirement living block of flats, could the repair costs be recovered from assured tenants by way of service charge?

The background

In Anchor Hanover Group v Cox [2023], the respondent tenant lived in a four-storey, purpose-built retirement block of 51 flats under an assured tenancy, as part of a social housing scheme. The tenant described occupiers as being elderly or infirm, making a fully-functioning lift an essential piece of plant at the property. A new lift was installed in 2018, and the tenant’s service charge for 2021-22 included payment towards the costs of installation, together with a contribution towards lift servicing, inspection and repair costs.

The tenant made a s.27A Landlord and Tenant Act 1985 application to the First-tier Tribunal for determination of his liability for payment of service charges for years 2010-2022, arguing that his assured tenancy meant that he should not be responsible for costs of repairs to the structure of the building, including the lift.

The tenant’s tenancy agreement included a variable service charge provision, with services to be delivered by the landlord listed and including the repair, maintenance and insurance of the lift.

The tenant cited s.11 Landlord and Tenant Act 1985:

“…there is implied by a covenant by the lessor…(a) to keep in repair the structure and exterior of the dwelling-house…(b) to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation…(c) to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.”

The First-tier Tribunal found that the lift did form an installation covered by s.11, requiring the landlord to repair and maintain it and rendering the terms of the tenant’s assured tenancy in respect of contribution towards the lift repair costs of no effect. The landlord was found to be responsible for the costs of repair, and appealed to the Upper Tribunal.

The decision

The Upper Tribunal disagreed, finding in favour of the landlord that the costs of installation and repairs to the lift were recoverable from the tenant.

In its decision, the UT found the FTT’s conclusion that the lift comprised an installation within s.11 to be unsupported. The FTT had effectively created an additional covenant within s.11 which obliged the landlord to repair common parts, including the lift within this definition.

The UT found that the lift did not form part of the structure or exterior of the building or the tenant’s flat, and it was not an installation for the supply of water, gas, electricity or sanitation, nor for space heating or heating water. As a result, the lift works did not fall within s.11. The court set aside the conclusion of the FTT and instead determined that the tenant was liable for payment of his share of the lift costs.

Advice and action for landlords

This decision takes a helpful look at the interpretation of s.11, finding that plant and machinery such as the lift – albeit an essential part of the building in this case for the tenants who lived there – did not form part of the structure or other utilities installation and was therefore subject to costs contributions by tenants.

There is argument to say that, if the lift broke down and was not functioning, such a situation could make this particular property – where a lift was required for many elderly and infirm residents – unfit for human habitation under s.9A and s.10 Landlord and Tenant Act 1985 and requiring the landlord to cover the costs of repair and major works. However, in this case the tenant was being charged for routine servicing and maintenance costs which kept the lift functioning and the building therefore fit for human habitation.