Raisbeck v Ernle Estates Ltd

The applicant sought a determination of the reasonableness of administration charges demanded in respect of the preparation and service of a s146 Law of Property Act 1925 notice and interest claimed on arrears of service charges.
The LVT found that the notice was defective and could never have formed the basis of a claim for forfeiture. In those circumstances it ruled that the costs of the notice were irrecoverable.
The LVT also found that it had jurisdiction to consider the interest charges. Interest was alleged to be payable as a consequence of a failure by the tenant to pay a sum due and, as such, was an administration charge. Whilst the rate of interest was found to be reasonable, the amount claimed was reduced as it was premised on a mistaken belief as to the amount outstanding.
Analysis
The LVT’s jurisdiction over administration charges has not really had the impact that many thought it would. The definition of administration charges is very wide and, as cases like this one show, it has the potential to cover numerous charges which were previously thought to be unchallengable.
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