Landlord and tenant – Service charge – Major works – Landlord and Tenant Act 1985 – Services Charges (Consultation Requirements) (England) Regulations 2003 – Appellant landlords serving notice on respondent lessees of estimates of cost for proposed major works – Whether notice complying with statutory consultation requirements – Whether wording of notice rendering nugatory respondents’ right to make observations – Whether failing to specify end date for consultation – Appeal allowed The respondents were the lessees of flats in a development of which the appellants were the freeholder and the management company. In 2006, the appellants issued consultation notices, under section 20 of the Landlord and Tenant Act 1985 and the Services Charges (Consultation Requirements) (England) Regulations 2003, informing the respondents of their intention to carry out major works of refurbishment to the external communal structural parts of the development. A second notice, served pursuant to para 11(10) of Part 2 of Schedule 4 to the 2003 Regulations, informed the respondents of various estimates for the works in amounts ranging from £239,595 to £415,442. The notice stated that a copy of the estimates could be obtained by written request and that observations on them could be made within the consultation period of 35 days from the date of the notice. It went on to say that it was now the appellants’ intention to enter into an agreement with the company that had tendered the lowest estimate after the expiry of the consultation period. A service charge invoice, based on that estimate, was enclosed with the notice. The appellants proceeded accordingly and sought to charge the respondents for the works in the service charge accounts for 2008 and 2009. The respondents applied to the leasehold valuation tribunal (LVT) for a determination that the appellants had not complied with the statutory consultation requirements in relation to those works. The LVT found that the appellants’ notice of estimates did not comply with the requirement in para 11(10)(b) to invite observations in writing; it found that the wording of the notice, coupled with the enclosed invoice, had rendered the opportunity to comment on the estimates nugatory to a significant degree. It further found that the notice did not comply with the requirement, in para 11(10)(c)(iii), to specify the date on which the consultation period ended since, quite apart from the fact that that period was 30 days, not the 35 days stated in the notice, the notice had not stated an end date. The appellants appealed. Decision: The appeal was allowed. (1) There was no suggestion that the appellants had “jumped the gun” by committing themselves contractually to a particular company before the end of the consultation period. Instead, the LVTÕs finding of non-compliance with para 11(10)(b) was based on the view that the terms of the notice, coupled with the accompanying documents, would have carried to a reasonable lessee the message that it was pointless to make observations. That finding was contrary to the express statement in the notice that the lessee’s could, should they wish to do so, make written observations in relation to any of the estimates. Substantial reasons would be required for concluding that what the appellants were expressly giving with one hand, namely the right to make written observations, was being taken away by the other hand. The wording of the notice, stating that it was “now” the appellants’ intention to enter into a contract with one particular company, did not suggest that the appellants had already made up their minds; it merely informed the lessees that the appellant’s provisional intention was to enter into an agreement with that company, subject to further consideration in the light of any observations received. Even coupled with the accompanying documents including the demand for payment, it could not be read as telling the lessees that there was no real point in making observations. It carried no subtext of a kind that would effectively stifle the express invitation to the lessee to make written observations on the estimates. (2) The failure of the notice to specify a calendar date on which the consultation period ended did not amount to non-compliance with para 11(10)(c)(iii). It was not essential for the notice to specify a date of the calendar year by name; it would be sufficient if the date were made clear: Sheffield City Council v Graingers Wines Ltd [1978] 2 All ER 70; [1977] 1 EGLR 76; (1977) 242 EG 687 and Lower Street Properties Ltd v Jones [1996] 2 EGLR 67; [1996] 48 EG 154 applied. The appellants’ notice had specified that the consultation period was 35 days from the date of the notice. Although there was a potential for ambiguity, in that people might be uncertain as to whether that meant 35 days starting with the date of the notice or on the following day, the former sense was correct and had been made clear by the notice. Alexander Bastin (instructed by Peverel Property Management) appeared for the appellants; the first respondent appeared in person for the respondents. Sally Dobson, barrister
Landlord and tenant – Service charge – Major works – Landlord and Tenant Act 1985 – Services Charges (Consultation Requirements) (England) Regulations 2003 – Appellant landlords serving notice on respondent lessees of estimates of cost for proposed major works – Whether notice complying with statutory consultation requirements – Whether wording of notice rendering nugatory respondents’ right to make observations – Whether failing to specify end date for consultation – Appeal allowed The respondents were the lessees of flats in a development of which the appellants were the freeholder and the management company. In 2006, the appellants issued consultation notices, under section 20 of the Landlord and Tenant Act 1985 and the Services Charges (Consultation Requirements) (England) Regulations 2003, informing the respondents of their intention to carry out major works of refurbishment to the external communal structural parts of the development. A second notice, served pursuant to para 11(10) of Part 2 of Schedule 4 to the 2003 Regulations, informed the respondents of various estimates for the works in amounts ranging from £239,595 to £415,442. The notice stated that a copy of the estimates could be obtained by written request and that observations on them could be made within the consultation period of 35 days from the date of the notice. It went on to say that it was now the appellants’ intention to enter into an agreement with the company that had tendered the lowest estimate after the expiry of the consultation period. A service charge invoice, based on that estimate, was enclosed with the notice. The appellants proceeded accordingly and sought to charge the respondents for the works in the service charge accounts for 2008 and 2009. The respondents applied to the leasehold valuation tribunal (LVT) for a determination that the appellants had not complied with the statutory consultation requirements in relation to those works. The LVT found that the appellants’ notice of estimates did not comply with the requirement in para 11(10)(b) to invite observations in writing; it found that the wording of the notice, coupled with the enclosed invoice, had rendered the opportunity to comment on the estimates nugatory to a significant degree. It further found that the notice did not comply with the requirement, in para 11(10)(c)(iii), to specify the date on which the consultation period ended since, quite apart from the fact that that period was 30 days, not the 35 days stated in the notice, the notice had not stated an end date. The appellants appealed. Decision: The appeal was allowed. (1) There was no suggestion that the appellants had “jumped the gun” by committing themselves contractually to a particular company before the end of the consultation period. Instead, the LVTÕs finding of non-compliance with para 11(10)(b) was based on the view that the terms of the notice, coupled with the accompanying documents, would have carried to a reasonable lessee the message that it was pointless to make observations. That finding was contrary to the express statement in the notice that the lessee’s could, should they wish to do so, make written observations in relation to any of the estimates. Substantial reasons would be required for concluding that what the appellants were expressly giving with one hand, namely the right to make written observations, was being taken away by the other hand. The wording of the notice, stating that it was “now” the appellants’ intention to enter into a contract with one particular company, did not suggest that the appellants had already made up their minds; it merely informed the lessees that the appellant’s provisional intention was to enter into an agreement with that company, subject to further consideration in the light of any observations received. Even coupled with the accompanying documents including the demand for payment, it could not be read as telling the lessees that there was no real point in making observations. It carried no subtext of a kind that would effectively stifle the express invitation to the lessee to make written observations on the estimates. (2) The failure of the notice to specify a calendar date on which the consultation period ended did not amount to non-compliance with para 11(10)(c)(iii). It was not essential for the notice to specify a date of the calendar year by name; it would be sufficient if the date were made clear: Sheffield City Council v Graingers Wines Ltd [1978] 2 All ER 70; [1977] 1 EGLR 76; (1977) 242 EG 687 and Lower Street Properties Ltd v Jones [1996] 2 EGLR 67; [1996] 48 EG 154 applied. The appellants’ notice had specified that the consultation period was 35 days from the date of the notice. Although there was a potential for ambiguity, in that people might be uncertain as to whether that meant 35 days starting with the date of the notice or on the following day, the former sense was correct and had been made clear by the notice. Alexander Bastin (instructed by Peverel Property Management) appeared for the appellants; the first respondent appeared in person for the respondents. Sally Dobson, barrister