Landlord and tenant – Service charge – Section 20 of Landlord and Tenant Act 1985 –Service Charges (Consultation Requirements) (England) Regulations 2003 – Stage 1 consultation notice informing respondent lessees of appellant landlord’s intention to carry out works of external repair and redecoration – Additional works carried out at extra cost – Whether cost of additional works recoverable – Whether falling outside ambit of notice – Appeal allowed in part
The respondents were the long lessees of one of four flats in a terraced house of which the appellant was the freehold owner. In October 2008, the appellant’s managing agent served a stage 1 consultation notice on the lessees of each flat, pursuant to the consultation provisions of section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003, notifying them of its intention to carry out “external repairs and redecorations”. In February 2009, the managing agent provided the lessees with a surveyor’s specification for the works. After putting the works out to tender, it then notified the lessees that it proposed to accept the lowest estimate of £37,553 plus VAT.
The tenants were later notified that, on the advice of the landlord’s engineer, additional works were required to a wall immediately under some railings at the front of the building, above a light well. The contractor’s price for the additional works was £5,500; however, since the price for the original works had by then been negotiated down to £29,500, the overall contact price still came in at less than the original tender.
In February 2010, the contractor submitted an invoice for the additional works in the higher sum of £7,735 plus VAT. The reason given for the additional cost was that a revised specification for the works, agreed with by the landlord’s surveyor, had involved more work being done, with areas of brickwork stripped back and reinforced with steel and concrete to provide a solid fixing for the railings.
In proceedings to determine the lessees’ liability to contribute to the cost of the works, the leasehold valuation tribunal (LVT) found that: (i) the October notice was invalid; (ii) in any event, the additional works as actually carried out did not fall within the ambit of the “external repairs and redecorations” contemplated by the October 2008 notice, so that a second round of consultation was required in respect of them; and (iii) if it were wrong about the validity of the consultation, £7,735 was still an unreasonable sum for those works and only £1,510 was recoverable in respect of them. The appellant appealed.
Held: The appeal was allowed.
(1) It was not necessary to address the validity of the October 2008 notice since the respondents were content to continue on the footing that it was valid. The respondents had not themselves expressed any concerns regarding the validity of that notice or suggested that it did not comply with section 20 of the 1985 Act. This was another regrettable instance of the LVT taking it upon itself to raise an issue that was not raised by either of the parties: Birmingham City Council v Keddie [2012] UKUT 323 (LC); [2012] 3 EGLR 53; [2012] 49 EG 71 considered.
(2) However, the additional works were not properly within the ambit of the October 2008 stage 1 notice. By para 1(2) of the 2003 Regulations, that notice had to describe, in general terms, the works proposed to be carried out. Whether a notice sufficiently described the proposed works was a question of fact and degree to be determined in the circumstances of each case. In the instant case, the expression “external repairs and redecoration” did not sufficiently describe the additional works. Although they were “external repairs”, in the sense that they were repairs to the exterior of the property, as a matter of fact there was no proposal, at the time when the notice was served, for those works to be carried out and they were not works that had to be done in order for the contract to be completed. Although there might be cases where a problem was revealed that had to be resolved in order for the other works to be completed, or where provisional sums were estimated and the work turned out to be more extensive or expensive than was envisaged, the instant case was not of that kind. Nothing in the original works was dependent on the additional works being done, apart from the railings being painted, and there was no evidence to indicate that the additional works were an unexpected item of repair that could not have been foreseen or envisaged at the time when the October 2008 notice was served. On the evidence, the section of the wall underneath the railings, and the railings themselves, had been in their existing condition for a long time but it had been decided not to include them in the programme of works. It could not now be argued that the additional works should be included within the external repairs as part and parcel of those works.
(3) The LVT had had insufficient evidence on which to conclude that the sum charged for the additional works was excessive. It had reached the view that more than £7,000 was an unreasonable amount for the relatively modest amount of work involved and had gone on to do the best it could, on the very limited information before it, on the basis of its own knowledge and expertise but without first ventilating that knowledge for comment by the parties. Accordingly, it had reached a decision that was unsupported by the evidence before it and was procedurally unfair because the parties had not been given an opportunity to make observations on whatever knowledge or information the LVT was using as the basis of its decision: Arrowdell Ltd vConiston Court (North) Hove Ltd [2007] RVR 39; [2013] PLSCS 278 applied. The appeal would be allowed to that extent.
Ben Maltz (instructed by the legal department of Southern Land Securities Ltd) appeared for the appellant; the first respondent appeared in person for the respondents.
Sally Dobson, barrister
