Case law: Requirement for residential landlords to consult before charging tenants for major work does not apply to charges 'on account'
Residential landlords could add more than £250 to tenants' service charges for proposed major works, provided the payment is on account of costs for future works and is reasonable, without following the statutory consultation process, a recent ruling makes clear.
This update was published in Legal Alert - October 2016
Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.
Residential landlords proposing to carry out major works (which include repair, maintenance and improvement) which would require each tenant to contribute more than £250 in their service charge to pay for those works, must first follow a statutory consultation process.
A landlord attempted to follow the consultation process, but failed to do so properly. The tenants argued that the landlord could not therefore ask for more than £250 in their service charges for the works.
The Upper Tribunal ruled that the requirement to consult only applied in relation to works already incurred by the landlord. It did not apply to service charges requested on account of future works. The only restriction when asking for such charges was that the payment had to be reasonable.
The landlord could therefore collect a sum in excess of £250 from the tenants in their service charges as a payment on account for future works.
- Residential landlords may be able to add more than £250 to tenants' service charges for proposed major works, provided the payment is on account of costs for future works and is reasonable, without following the statutory consultation process required if the charge is for costs already incurred, a ruling makes clear
Case ref: 23 Dollis Avenue (1998) v Vejdani  UKUT 365 (16 August 2016)
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.