When a Landlord wants to carry out works and the cost of completing them will be charged to the Tenants via a service charge, the Law requires a Landlord to carry out a consultation exercise if the cost per Tenant will exceed £250. The procedure is relatively long winded but is there to ensure that the Tenants obtain reasonable value for the work done.
When the owners of a caravan site in Cornwall wanted to upgrade their site they proposed substantial work should be carried out. When they were completed the caravan owners on the site were dismayed to find that their service charges had doubled.
The caravan owners opposed the charges and the matter went to Court. The Landlord argued that the improvements constituted a series of individual works and not one single programme of works. If this argument was accepted, the Landlord would not have had to gone through the consultation exercise.
The Court rejected the Landlords argument. The Judge indicated that he considered that the legislation should be seen as offering protection in the form of a limitation on charges where no consultation had taken place, even for sporadic works which relate to “ongoing repair and maintenance” and that the £250 limit should be seen as an annual limit. The Landlord was, therefore, liable for the excess costs above £250 per Tenant.
The practical issue for Landlords is that much necessary and unanticipated repair work may well arise which would breach the £250 limit and create the need for a consultation process. For Tenants the consequence may be that Landlords delay minor works which would otherwise be carried out.
If you would like further information on this subject please contact Mark Ollier.