PC Residents (Finchley Road) Limited v Folasade Jibike Abiola
Decision date: 3 April 2025
Neutral citation: [2025] UKUT 120 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned disputed service charges for Flat 25 Palace Court for 2019–2022 and whether the FTT had erred in calculating year-end surpluses and in making a s.20C order. The Upper Tribunal found the FTT had misunderstood or overlooked material evidence, set aside its surplus calculations (which relied on accrual accounts instead of certified payment summaries) and its s.20C order, and held that the lease requires certified adjustments to be paid or credited to individual tenants so surpluses cannot be diverted to a reserve without unanimous leaseholder agreement. The UT dismissed the respondent’s application on remaking the decision and made no order on matters agreed between the parties before the FTT.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Where a lease provision (here the Fourth Schedule) requires a certified post-year adjustment to be paid to or credited to the tenant, the landlord cannot unilaterally divert that certified surplus into a general reserve to the detriment of the individual tenant; and, where both accrual-based accounts and certified payment summaries are before a tribunal and materially differ, the tribunal must take the certified summaries of payments made into account when calculating surpluses.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal noted that a long-standing practice of allocating surpluses to reserves does not, by itself, override express lease provisions requiring certification and crediting to tenants, and that tribunals should record the terms of any agreement reached between parties even if they lack jurisdiction to determine agreed matters.