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A recent decision taken by the Upper Tribunal (Lands Chamber) could have a big effect on UK landlords.
Leaseholders Charged for Expensive Improvements
In Waaler v Hounslow [2015] the tenant disputed an obligation to pay for the cost of replacement windows in a block of flats.
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The London Borough of Hounslow billed each of the leaseholders in a block of flats £55k to help pay for the substantial cost of replacing existing tilting windows where the hinges were not strong enough to support the weight of the glass.
The Tribunal decided that the sum was payable (subject to some minor adjustments), but gave the tenant permission to appeal, saying:
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“Without wishing to encourage false hopes for the applicant, it seems to me to be arguable that when the F-tT (First-tier Tribunal) considered whether the very substantial works undertaken by the landlord were reasonably incurred and properly the subject of service charges totalling more than £55,000 per leaseholder, it ought to have given greater consideration to the quantum of the total bill and the resources of the leaseholders expected to contribute towards it.”
Far Reaching Implications
Experts believe this ruling could have far reaching implications for landlords, who may feel obliged to demonstrate that they have considered alternative approaches to expensive improvements – and charge their costs back to the leaseholders.
Katharine Marshall from www.thelawyer.com says:
“Although only a Lands Tribunal decision, and set in the context of the protection offered by the English Landlord & Tenant Act 1985 to tenants of “reasonable” service charges, this case may nevertheless influence … [a] court if a tenant challenged a charge…”
