P were the lessors of 150 holiday chalets in Cornwall, each let on a long lease. The leases contained the usual provisions for service charges.
In the service charge years 2008 and 2009 P had carried a number of discrete works on the site, none of which, taken separately, would have triggered the consultation requirements of section 20 Landlord & Tenant Act 1985. F, on behalf of the lessees, issued a claim seeking a declaration that these works should be aggregated, that the total value of these works in each year exceeded the £250 limit provided for under s.20, and that, as P had failed to carry out any consultation in relation to these works then the lessees could be required to pay no more than £250 per chalet towards the costs of the works - pursuant to s.20(7) of the 1985 Act.At first instance the judge found for the lessors, but on appeal Morrit C considered that the works should be aggregated and limited recovery to £250 per flat. The lessors appealed. The Court of Appeal held that the works should not be aggregated in this instance and gave advice as to how to approach similar factual situations. In deciding whether sets of works should be considered as separate, or rather as a single programme the following questions would be helpful:
The decision will be of great relief to landlords. If they were forced to aggregate works over a service charge year, any emergency towards the end of that year would put them in great difficulty. They would have to either do the work and take their chances (and the accompanying expense) on an application for dispensation, or else leave the works undone until the start of the new financial year, no doubt to the great irritation of the lessees. There is no real downside for lessees either: they still retain the protection of s.19 L&TA 1985 which permits them to challenge service charges on the grounds that they are unreasonable.
James Browne / 1st Dec 2014
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