A landlord who purchases property in need of works has the right, before their title is registered, to enter the property to carry out works.
Further, during the registration gap they have standing to apply for dispensation from the consultation requirements, in circumstances where they are in breach.
In RM Residential Ltd v Westacre Estates Ltd and another [2024] UKUT 56 (LC); [2024] PLSCS 45 the appellant was the freehold owner of a mixed-use block in Cirencester.
The residential flats were let on long leases to the respondents.
The appellant purchased the block in December 2020, but the transfer was not registered at HM Land Registry until January 2022.
Shortly after purchasing the property, the landlord instructed engineers to report on its condition. The property was found to be disrepair with issues with movement and asbestos.
Urgent remedial works were recommended in relation to the structure of the property and the removal of the asbestos.
The landlord commenced the advised work before it became the registered legal owner of the property. The works were substantially completed in September 2021, with the asbestos removal completed in 2023.
The works carried out by the appellant fell within the definition of “qualifying works” under section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003, so as to trigger the statutory consultation requirements.
The appellant failed to consult the lessees and in May 2023 it applied to the First-tier Tribunal for dispensation.
The FTT refused to grant dispensation. It found that although the leaseholders did not suffer any prejudice from the failure to consult, the appellant had failed to establish that the works were urgent.
Yet, further and more fundamentally, the appellant did not have standing to make the application in circumstances where it was seeking dispensation for work carried out at a time when it was not the registered legal owner of the property.
On appeal, the Upper Tribunal (Lands Chamber) set aside the FTT’s decision and granted dispensation. The UT was critical of the FTT’s approach to the application.
It found that prejudice was the sole question the FTT had to address. In circumstances where the lessees had suffered no prejudice, dispensation would ordinarily be granted. Further, the urgency of the works was not a precondition for the grant of dispensation.
Lastly, the UT determined that during the period between completion of sale and registration of the transfer of land, a vendor held the legal interest as a bare trustee for the purchaser.
The purchaser, albeit with an equitable interest only, was entitled to enter the property during the registration gap to carry out works and apply for dispensation in respect of the same if in breach of the consultation requirements.
Elizabeth Dwomoh is a barrister at Lamb Chambers
