Landlord and Tenant Act 1985 – Service charge – Qualifying works – Consultation requirements – Appellant landlord notifying respondent tenant of intention to carry out works of repair and renewal to windows – Estimated cost representing cheaper of two alternatives set out in contractor’s estimate – Windows proving to be rotten and more expensive alternative of replacement proving necessary – Whether appellant entitled to recover additional cost from respondent through service charge – Whether those works comprised within description of works in consultation notices – Appeal allowed
The respondent was the tenant of one of the two flats in a converted house. The appellant landlord proposed to carry out “qualifying works” to which the consultation requirements of section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003 applied. In its “stage 1” and “stage 2” notices, served on the respondent under Schedules 3 and 4 of the 2003 Regulations, it described the works as including “window repairs/renewals”. The stage 2 notice indicated that detailed contractors’ estimates were available for inspection and that the total cost would be £12,908, with the respondent’s share, payable through the service charge, being a little over £8,038.
The breakdown of the total cost included £3,025 for the windows, which was the lower of two alternative figures given in the relevant contractor’s estimate and related to the repair of six windows at the rear of the property. While carrying out the works, it became apparent that the windows were so rotten that they needed to be replaced. The appellant therefore proceeded with the second, more expensive alternative, involving the replacement of windows and doors to both flats at a cost of £8,107.50. It sought to recover an additional £6,054 from the respondent for his share of those additional works, plus site preliminaries and scaffolding costs.
The respondent challenged his liability to pay the additional sum, contending that the description of the works as “window repairs/renewals” in the appellant’s notices did not accurately describe the more extensive and costly replacement works that had actually been carried out. The leasehold valuation tribunal (LVT) accepted that contention and found that, while the existing notices would have been sufficient had the additional works increased the costs only slightly, the appellant should have undertaken a fresh consultation where there was such a substantial increase. It allowed an additional 10% above the cost originally stated, to cover “natural fluctuations” that occurred with major works contracts of that nature, but capped the remaining costs at £250 on the grounds of the appellant’s non-compliance with section 20 of the 1985 Act in relation to the description of the works. The appellant appealed.
Held: The appeal was allowed.
The notices served by the appellant complied with the requirement, in para 2(a) of Schedules 3 and 4 to the 2003 Regulations, to describe in general terms the works proposed to be carried out. Both notices described the works as being “window repairs/renewals” and the original specification of those works was almost entirely formed of window repair and replacement. As a matter of fact, the works actually carried out did comprise repair and replacement to the windows. Moreover, had the respondent inspected the documents referred to in the stage 2 notice, he would have seen that there were alternative ways of dealing with the windows, with a lower cost alternative and a more expensive alternative. In those circumstances, the works that were carried out were comprised within the stage 1 and stage 2 consultation notices and the statutory provisions had been complied with as a matter of law and fact. The amount of those works, being the fixed price plus the consequential increase in preliminaries and scaffolding costs, were therefore recoverable, there being no evidence that those costs were unreasonable in amount.
It was not unusual in building cases for a provisional sum to be inserted and then, when matters on the ground were inspected with greater care, for it to be seen that more extensive works were required. While it might possibly have been necessary to carry out a new consultation in the event that additional works, not previously been envisaged by the contract, had been added at a later date, in the instant case the works carried out to the windows had always been envisaged by the contract, which encompassed both of the two alternatives. It was relevant that, under the statutory framework, it remained open to a tenant to challenge the reasonableness of works even after those works had been carried out. It was not uncommon for tenants to challenge the actual cost of execution of the works but the respondent had not availed himself of that opportunity.
There was also an inconsistency in the LVT’s decision so far as it had found that the works carried out were not within the ambit of the qualifying works described in the consultation notices, while at the same time it had allowed the cost of those works on the footing of the estimated costs of the cheaper alternative plus an uplift of 10%. If works had been carried out without compliance with the consultation requirements, then as a matter of law those costs would not have been recoverable save to a cap of £250. On the LVT’s findings, the result would therefore have been that the total recoverable for the works actually carried out was confined to £250 in respect of each flat, on the basis that the works included in the lower estimate had not been carried out and there had been no proper consultation in relation to the works that had been carried out.
Simon Butler (instructed by the legal department of Southwark London Borough Council) appeared for the appellants; the respondent appeared in person.
Sally Dobson, barrister