Service charge – Improvements – Replacement of external windows – Terms of lease requiring respondent tenant to contribute to costs incurred by appellant landlord on repairs and improvements to “structure and exterior” of premises – Leasehold valuation tribunal (LVT) finding replacement of windows not a matter for which service charge payable – Para 14(2)(a) of Schedule 6 to Landlord and Tenant Act 1985 – Whether external windows part of structure and exterior within meaning of para 14(2)(a) – Whether same meaning to be given to “structure and exterior” in express terms of lease – Whether service charge payable – Appeal allowed
The respondent held a 125-year lease of a maisonette that she had acquired from the appellant council under the right-to-buy legislation. In 2006, the appellants gave notice to the respondent of their intention to undertake works, including replacement of the existing single-glazed, metal-framed windows in the building with double-glazed UPVC units. The respondent’s contribution to the cost was estimated at £4,532. She applied to the leasehold valuation tribunal, under section 27A of the Landlord and Tenant Act 1985, for a determination of her liability to pay service charges in respect of the work. The central issue was whether the work fell within the terms of the landlord’s repairing covenant such as to be recoverable as part of the service charge.
The relevant provisions of the lease defined the demised premises as including “the windows and doors including the glass and frames thereof in the exterior walls of the demised premises”, excepting and reserving “those parts of the structure and exterior of the demised premises which the Council are by virtue of paragraph 14(2)(a) of and Part III of Schedule 6 of the [Housing Act 1985] obliged to keep in repair”; that reservation was again expressly stated not to apply to the exterior windows and doors. A service charge was payable in respect of the costs of carrying out the landlord’s obligations, including “keeping in repair and improving the structure and exterior of the demised premises and the building”.
The LVT took the view that since the windows and frames formed part of the demised premises, they were the lessee responsibility; they were separate and distinct from the structure and exterior such that the appellants had neither the right nor the obligation to repair, renew or improve them. The appellants appealed. They contended that the replacement of windows amounted to work that they had an obligation to perform or a right to undertake under the provisions of the lease or the covenants concerning repairs and service charges that were to be implied by virtue of the 1985 Act.
Decision: The appeal was allowed.
External windows would usually constitute part of the structure and part of the exterior of the building to which they belonged for the purposes of the covenants to be implied under para 14(2)(a) of Schedule 6 to the 1985 Act requiring landlords to “keep in repair the structure and exterior” of the building. The “structure” could be regarded as the fabric of the building as opposed to decorations and fittings: Irvine v Morgan [1991] 1 EGLR 261, Boswell v Crucible Steel Co [1925] 1 KB 119 and Pearlman v Keepers and Governors of Harrow School [1978] 2 EGLR 61; (1978) 247 EG 1173 applied. It followed that the appellants were required by para 14(2)(a) to keep the external windows in repair, and that the cost of fulfilling that obligation was attributable to the service charge. Although the proposed works were improvements rather than repairs, such that the appellants could not rely upon para 14(2)(a), they none the less fell within the wider wording of the express covenant in the lease so far as it referred to “keeping in repair and improving” the structure and exterior. There was nothing to suggest that “structure and exterior” had a different meaning in the lease or that the parties had proceeded on the basis that the external windows did not form part of the structure and exterior within the meaning of those words in para 14(2)(a). The lease definition of the demised premises had no bearing upon the construction to be placed upon the landlord’s repairing covenant. There was no reason why some limitation on the scope of the repairing covenant should be derived from the demise. Consequently, the reasonable cost of the works to replace the external windows was payable to the appellants as part of the service charge.
It was surprising that the terms of the lease permitted the appellants to undertake works of improvement and to charge the lessee for such even though that lessee did not want the works to be carried out. As a matter of practice, the appellants ought not to carry out improvements to the demised premises without the lessee’s approval unless those works were no more than a limited extension of works of repair.
Christopher Baker (instructed by legal department of Sheffield City Council) appeared for the appellants; the respondent appeared in person.
Sally Dobson, barrister
