A Uttoxeter-based landlord, Gunes Ata, aged 47, has been successfully prosecuted by Sheffield City Council for repeatedly failing to provide his leaseholder tenants with the detailed information they are entitled to when presented with their service charges.
Mr Ata, who owns Sheffield's Old Town Hall and he owns the Printworks, Hodgson Street, Sheffield, the subject of the claim '� he is landlord to hundreds of tenants in Sheffield and has been prosecuted before.
Service charges & insurance
All tenants (long-leaseholders) in blocks of flats must pay service charges to their landlord to cover general maintenance and repairs - cleaning, repairs of communal areas and the outside fabric, and sometimes grounds maintenance, plus the building insurance, all these items come under these service charges.
But by law tenants have a right to know how these charges are made up in order to be able to challenge them if they feel they are unreasonable. They are unable to do so if the charges are presented as a single figure, which Mr Ata was guilty of doing.
With insurance, all leaseholders have a right to know what the insurance covers so that they can verify if they are properly protected as well as getting value for money.
It is common for leasehold tenants to complain that the cost of insurance charged for is unreasonable. Often a complaint will be based on the tenants having found an alternative quote that does not include the same level of cover as is deemed necessary by the landlord.
However, there are also cases where tenants find similar cover at significantly cheaper rates than those obtained by the landlord. While section 19 of the Landlord and Tenant Act 1985 does not require a landlord to obtain services at the cheapest cost, where there is good evidence that cover is available in the market at a significantly lower cost, it is more than likely the First-tier Tribunal (property) will find for the tenants, that the costs incurred by the landlord are not reasonable.
Following an Upper Tribunal ruling in COS Services Ltd v Nicholson  re insurance costs, it is necessary for landlords to do more than say that the insurance was negotiated at arm's length through a broker. The landlord must be able to provide evidence justifying the cost of the insurance and explaining why it is necessarily more expensive than quotes obtained by the tenants.
If the tenants can produce evidence that materially similar insurance cover can be obtained at a much cheaper cost, then it will be incumbent upon the landlord the bring to the tribunal an expert witness or broker with in depth insurance knowledge to challenge the tenants' assertions.
In the Sheffield case at the magistrates court, the landlord has been fined �2,225 for breaking the rules on providing the full insurance and service charge details that Mr Ata was charging his tenants. Gunes Ata owns the Printworks student accommodation building on Hodgson Street in Sheffield, and was fined the �2,225 which included �1,400 costs to the council, a fine of �750 and a �75 victim surcharge.
It is a criminal offence for landlords to withhold detailed information that should be included in a service charge bill. Tenants, when they request it, are entitled to see the detailed information about how service charges are made up, and in particular details about the insurance cover they are paying for.
This prosecution was brought under s.30A and para. 6 of the Schedule to the Landlord and Tenant Act 1985. Sheffield's case on Mr Ata was that landlords should follow the rule of law and act with professionalism and good management practice. Mr Ata's business practice according to Sheffield Council fell short of the standard required by law.
Councillor Douglas Johnson, Chair of Housing Policy Committee at Sheffield City Council, said:
'We make it our business to protect tenants from landlords who do not come up to the mark and this is another example of us using the law to bring about a successful court prosecution.
'We want Sheffield to be a place where all residents and investors can be sure they will be treated fairly and we will take action where we reasonably can, when it is clear that this law is being ignored or disregarded.'�
Private Housing Standards Team
Sheffield Council's Private Housing Standards team regulates the private rented sector in Sheffield and the Council provides an advice and education programme for landlords. Tenants or landlords www.sheffield.gov.uk/phs
[Image shows Sheffield Town Hall]