How will the Courts ongoing approach to Section 20 Work for landlords?

11th June 2018

How will the Courts ongoing approach to Section 20 Work for landlords?

The Court of Appeal has recently given some much needed clarification on whether a Landlord needs to repeat its statutory consultation if the works actually being carried out change from the original programme that was consulted on.

Here, Higgs Property Litigation expert, Nyree Applegarth looks at the Court’s current approach and its implications for Landlords.

In a recent matter - Reedbase v Fattal [2018] EWCA 840, the dispute concerned the second stage of consultation when estimates were presented to the Tenants.

Works were carried out to the roof terrace of a penthouse flat overlooking Regents Park and in the course of the works the Landlord changed the tiling on the roof from tiles bonded onto asphalt to tiles resting on pedestals above a waterproof membrane. The estimate obtained by the Landlord on which the Tenants were consulted, did not refer to the pedestal method. The Tenants sought to challenge their liability to pay for the works alleging that there had not been proper consultation. The question for the Court was whether the change in the works invalidated the second stage consultation to such that the Landlord could not recover all the sums spent.

The Court of Appeal clarified that there was no explicit statutory guidance when a change in works would invalidate a stage in the consultation such that had to be repeated. It ruled that the relevant test must be “whether, in all the circumstances the Tenants had been given sufficient information by the first set of estimates" and “it must also be considered whether… the protection to be afforded to the Tenants by the consultation process was likely to be materially assisted by obtaining fresh estimates".

In this case the Court held that fresh estimates would not have assisted because:

  1. The Tenants who complained knew of the change and approved it such that there was no ambush
  2. The change in cost (and substance) was relatively small in proportion to the full cost of works
  3. It was unrealistic to think that contractors who had not been awarded the main job would tender for this small extra part and there was no evidence there would be a cost saving
  4. The extra time of re-tendering might prejudice other Tenants
  5. The Tenants had the overarching protection of Section 19 (that the sums be reasonable and be reasonably incurred).
  6. The Tenants sought to argue that by putting different tiles on a different support system requiring maintenance, the Landlord had not satisfied its obligation to make good the Tenants’ premises in the course of its repair.

The Court of Appeal rejected that argument and ruled that the Landlord's only obligation was reasonably or “so far as possible” to restore the property to its pre-existing state. This can include something different.

This latest development appears to be a useful clarification on a much litigated area of law.



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