Reply To: Ineligible service charge valuations for Charity providing Exempt accommodation

Peter Barker

Unless the landlord’s figure is unreasonably low, you have no legal basis on which to substitute anything different. The RO valuation is one piece of evidence you could use when considering whether the charge is unreasonably low, but it’s a bit flimsy on its own, especially if the landlord has provided you with costings.

I agree I think you have been putting the cart before the horse. The correct process should be something like this:

– Let’s have a look at this year’s rent breakdown. Hmmm … £10.80, that’s not much for full utilities these days. My instinct tells me it ought to be a bit more
– As it happens, the RO seems to agree with me – they have set it at £16.97. I’m inclined to think the RO valuation is probably more like it and I might increase the ineligible charge to something around that level: it’s as good a benchmark as any
– But I’d better give the landlord the chance to convince me I’m wrong – maybe they’ve got really good insulation, or perhaps the licensees spend every waking hour in communal areas and never heat their rooms. This needs a closer look.