Tribunal Untangles Litany of Drafting Errors in Housing Estate Leases

The reason why drafting leases is a job for specialist lawyers is that any ambiguity or unfortunate wording can store up trouble for the future. In one case, a litany of errors in the drafting of flat leases in respect of a housing development gave rise to not just one, but two, sets of hard-fought tribunal proceedings.

The development consisted of three buildings containing hundreds of flats. The lease of each flat described the development as ‘the development of the flats within the land’, without defining what was meant by ‘the land’. That lack of clarity led to a dispute which culminated in a ruling of the First-tier Tribunal (FTT) that ‘the development’ comprised all three buildings.

That, however, was not the end of the matter as the service charge provisions in the leases were also opaque. They left doubt as to whether tenants were obliged to pay service charges in respect of the entire development or only the building in which their flats were situated. The FTT found that, on a true interpretation of the lease, the costs of repairing, maintaining and redecorating each of the buildings were recoverable by the landlord from the tenants of all of them.

In ruling on one tenant’s appeal against that decision, the Upper Tribunal (UT) noted that the numerous drafting errors in her lease included the mis-numbering of her flat. The leases specified a percentage of the service charges for which each tenant was liable but, if those percentages had been applied, the landlord would have been able to recover more than 100 percent of its expenditure.

Dismissing the tenant’s appeal, however, the UT found that the FTT’s interpretation of the lease made commercial sense and conformed to the surrounding circumstances. The tenant was required to contribute 0.51 percent of the service charges and, as there were only 40 flats in her building, it would have been remarkable had she not been required to pay towards the cost of works on the other two buildings.