Who Decides on the Trading Estate?
On trading estates, car parks and roads are a frequent source of dispute. The division of the cost of their repair can be an issue, particularly where, for example, one trader has particularly heavy traffic to and from their unit. Another area for dispute is where there are common parking areas and again, these disputes often revolve around unequal use, especially where the parking is inadequate for the needs of the traders as a whole.
A recent case which dealt with parking spaces is typical. It involved an industrial estate which had a maximum of 370 parking spaces for 87 units (roughly 4 per unit). The units had been bought on 999 year leases and the usual service charge arrangements were in place, the estate being managed by a management company owned by the lease holders. Six of the units on the estate were occupied by car repairers and these made use of an average of more than a dozen spaces each. This created parking problems for the other users of the estate and sometimes led to the access roads being blocked. The problem was particularly acute early in the morning and was exacerbated by cars being parked overnight.
The rates charged for the parking area amounted to £33,000 per annum. The management company sought to apportion this on the basis of the number of parking spaces used by each business, through the service charges made on each occupier. This was protested by some of the occupiers and an alternative was proposed based on the rateable values of the units. This in turn was regarded as unfair by other occupiers. Eventually, it was proposed that overnight parking would be banned altogether, except for a limited number of spaces which would be made available in return for a payment.
The car repairers opposed this scheme on the basis that the impact on their businesses would be disproportionate and that the terms of the service charge agreement required each occupier to contribute proportionately to the total service costs. The court considered that the management company had erred by ignoring the market rate for overnight parking and simply seeking to cover the rates bill from income from the lease holders. Secondly, the apportionment of the rates bill based on the use of overnight parking was not basing the charge on a proportionate use of the parking available.
The management company appealed and the Court of Appeal reversed the decision of the lower court. The scheme proposed was reasonable and therefore the method by which the fees had been set was not in point. It was not for the management company to prove that the scheme was reasonable but for those opposing it to prove that it was unreasonable.
A recent case which dealt with parking spaces is typical. It involved an industrial estate which had a maximum of 370 parking spaces for 87 units (roughly 4 per unit). The units had been bought on 999 year leases and the usual service charge arrangements were in place, the estate being managed by a management company owned by the lease holders. Six of the units on the estate were occupied by car repairers and these made use of an average of more than a dozen spaces each. This created parking problems for the other users of the estate and sometimes led to the access roads being blocked. The problem was particularly acute early in the morning and was exacerbated by cars being parked overnight.
The rates charged for the parking area amounted to £33,000 per annum. The management company sought to apportion this on the basis of the number of parking spaces used by each business, through the service charges made on each occupier. This was protested by some of the occupiers and an alternative was proposed based on the rateable values of the units. This in turn was regarded as unfair by other occupiers. Eventually, it was proposed that overnight parking would be banned altogether, except for a limited number of spaces which would be made available in return for a payment.
The car repairers opposed this scheme on the basis that the impact on their businesses would be disproportionate and that the terms of the service charge agreement required each occupier to contribute proportionately to the total service costs. The court considered that the management company had erred by ignoring the market rate for overnight parking and simply seeking to cover the rates bill from income from the lease holders. Secondly, the apportionment of the rates bill based on the use of overnight parking was not basing the charge on a proportionate use of the parking available.
The management company appealed and the Court of Appeal reversed the decision of the lower court. The scheme proposed was reasonable and therefore the method by which the fees had been set was not in point. It was not for the management company to prove that the scheme was reasonable but for those opposing it to prove that it was unreasonable.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
