Landlord and tenant – Service charge – Repairs – Respondent leaseholders of flats liable to contribute through service charge to costs incurred by appellants in performing repairing covenant in lease – Appellants carrying out works to windows – Whether replacement of sub-frames constituting works of “repair” within repairing covenant – Whether respondents liable to contribute to those costs – Appeal allowed in part
The respondents were the long leaseholders of two flats in a building in Chelsea, London SW3, which was owned and managed by the second and first appellants respectively. Leaseholders were liable to contribute through a service charge to the costs incurred by the first appellant in performing its obligations under the lease, including its covenant to keep the building in good and substantial repair and condition.
In 2013, the appellants resolved to carry out a programme of repairs and redecoration to the windows in the flats, which, in the case of 28 flats whose leaseholders had indicated that they wanted it and were willing personally to meet the cost, included the replacement of the original single-glazed windows with new powder-coated, double-glazed units which did not require repair or decoration. In the case of the remaining flats, the proposed work largely consisted of any necessary repairs to the existing windows and their timber sub-frames, and redecoration. A building survey obtained by the appellants in 2010 had indicated that the windows were generally in good condition and had been well maintained, with no reports of failed locks or rusted hinges and no need for significant repairs.
The appellants sought to recover the final cost of the works, which was roughly £405,000, from the leaseholders through the service charge. That sum included the cost of supplying and installing new powder-coated sub-frames to receive the double-glazed windows in the 28 flats that were having them, plus the cost of the making good any consequential damage to internal plaster and decorations and to external brickwork.
On an application under section 27A of the Landlord and Tenant Act 1985, the first-tier tribunal (FTT) found, in favour of the respondents, that the cost of the new sub-frames and consequential work went beyond “repair” and so did not fall within the repairing covenant, with the result that the leaseholders were not liable to contribute to it.
The appellants appealed. They contended that, where replacement of the windows would be more economical in the long term, they only had to show that some work of repair was needed in order to engage the repairing covenant and allow them to adopt their preferred approach of replacing the original frames and sub-frames.
Held: The appeal was allowed in part.
(1) It was not the case that the presence of any amount of disrepair, including simply a need for routine periodic redecoration and maintenance, was enough to bring a programme of wholesale window and sub-frame replacement within the repairing covenant. Such an approach paid little attention to the physical condition of the building components under consideration and relied on too legalistic an analysis of what should be a practical assessment. An obligation to keep a structure in repair would only come into operation if there had been damage to the structure which required to be made good. Only those parts of the structure which were in disrepair were relevant to the consideration of whether there was a requirement for remedial action.
A common-sense approach was required when considering what remedial work was appropriate to remedy a state of disrepair. In the instant case, such deterioration as existed in the remaining timber sub-frames was remedied at little cost. There was no evidence that the sub-frames which were replaced had been in need of any more extensive repair. The decision to replace the frames and sub-frames was motivated not by their condition, but by the availability of a modern alternative which would provide better insulation against noise and heat loss and lower bills in future, because it would not require frequent redecoration. Replacement might therefore have been justified on economic grounds, especially since a large part of the cost would be met by individual leaseholders, but it was not justified on the grounds that, either individually or collectively, the windows were in a state of disrepair requiring remedial work.
While the existing windows had required redecoration, their replacement with new units which did not need to be painted was not an appropriate response, having regard to the nature, extent and cost of the proposed remedial works. The general principle was that the work which the landlord was obliged or entitled to carry out was limited to that which was reasonably required to remedy the defect. While window replacement could be an appropriate response to significant deterioration, the FTT had been entitled to find that the work required in the instant case was too trivial to confer on the appellants the right to replace the sub-frames at the collective expense of the leaseholders. The FTT’s decision was based on an expert evaluation of the condition of the windows, and the range of available responses to that condition having regard to the expense which would be incurred or avoided in future depending on the choice made.
(2) The Upper Tribunal rejected a second ground of appeal, concerning the way in which the FTT had calculated the proportion of the final cost which was to be disallowed. However, it allowed a third ground of appeal which related to the FTT’s finding that certain managing agents’ fees were irrecoverable as being incurred under qualifying long term agreement on which there had been no prior statutory consultation with leaseholders, and in respect of which there had been no application for dispensation under section 20ZA of the 1985 Act.
Piers Harrison (instructed by Pemberton Greenish LLP) appeared for the appellants; Philip Rainey QC and Rebecca Cattermole (instructed by Brethertons LLP) appeared for the respondents.
Sally Dobson, barrister
Click here to read transcript: Tedworth North Management Ltd and another v Miller and other
