This is illustrated by a recent case in which L was the freeholder of a building on several floors, with the upper floors comprising 24 residential units. The lower floors were occupied by commercial units. All the upper (residential) units were let to T, a non-profit-making company collectively owned by most of the sub-T long lessees. The lease between L and T provided that L was responsible for keeping the building in good and substantial repair, with T paying 90% of the costs incurred by L. The idea was that T would then pass those charges onto the sub-Ts as service charges. Clearly, T was subject to the service charge legislation as well as the landlord of the sub-Ts. In due course, L carried out some building works and then claimed the costs from T. But, L did not consult with T or the sub-Ts and accordingly one of the sub-Ts set out to challenge that. He argued that since T merely passed on the costs of the maintenance charges to the sub-Ts, those charges should be regulated as residential service charges. Accordingly, he brought a claim against L in the LVT (and he did not bring T, his direct lessor, into the proceedings). The court agreed, taking the view that the maintenance charge payable by T was subject to LTA 1985 protection, and the LVT had jurisdiction to consider an application by one of the sub-Ts directly against L. Needless to say, this decision may have been an unpleasant surprise to L which took the view that it had a purely commercial lease with T, but the effect is that if there are residential units within a block then any service charges levied by L are challengeable by a long lessee (even if that long lessee is a sub-T). What really seems to matter is whether, at the end of the day, the residential occupier is the one paying the service charge being levied. If so, then the likelihood is that the service charge regime of LTA 1985 will apply. See note on Oakfern v Ruddy [2006] EWCA Civ 1389 in [2007] 189 Property Law Journal 6. © Practical Lawyer