Section 20ZA(1) of the Landlord and Tenant Act 1985 requires landlords to consult residential tenants before undertaking work above a certain value. The Services Charges (Consultation Requirements) (England) Regulations 2003 explain the requirements in more detail. They provide that, if a landlord fails to comply with the requirements, he will be unable to recover more than the statutory limit of £250 from each tenant. Similar provisions apply where a landlord intends to enter into a qualifying long-term agreement for the provision of services, save that the costs cap in such cases is £100.
23 Dollis Avenue (1998) Ltd v Vejdani [2016] UKUT 365 (LC); [2016] PLSCS 236 confirms that there are no such limits where a landlord requests payments in advance in respect of work that it is proposing. The case concerned a consultation exercise that was defective because the estimates provided by the landlord’s builders, which were copied to the tenants, included items that were not mentioned in the landlord’s notice of intention to carry out work. This meant that the amounts quoted did not represent the estimated cost of the work that was originally proposed. Consequently, the Upper Tribunal ruled that the landlord had not complied with the consultation regulations.
However, the tribunal went on to rule that the statutory cap applies to costs actually incurred by the landlord in carrying out work – and not to work that is to be carried out in the future. In its view, the statutory requirements do not require that there should be a valid consultation process before a sum in excess of £250 can be recovered in respect of intended works.
The landlord had not actually embarked on the work and there is no statutory limit to the amount that a landlord can recover on account, if the amount that the landlord is seeking to recover is reasonable. In such circumstances, section 19(2) of the 1985 Act provides that “after the relevant costs have been incurred any necessary adjustment shall be made by repayment, reduction or subsequent charges or otherwise”.
The tribunal accepted that the fact that there has been a failure to comply with the 2003 Regulations may be relevant to the reasonableness of the amount to be paid under section 19(2). However, this was only one of the factors that had to be taken into account. The work needed to be done and the application for an advance payment was not premature. The landlord had attempted to comply with the regulations and the tenants had not engaged seriously with the process at all. They did not suggest alternative contractors and had not commented on the estimates.
Meanwhile, the landlord could obtain further estimates in order to comply with the regulations and the tribunal considered that it would be reasonable for it to request a payment in advance. The tribunal reviewed the estimates, deducted sums to cover the extra work that had found its way into in the consultation exercise, and ruled that it would be reasonable for the landlord to collect that reduced amount from its tenants.
Allyson Colby, property law consultant
