The High Court’s recent verdict in an appeal relating to the service
charge consultation requirements under Section 20 of the Landlord and Tenant
Act 1985 rather set the cat amongst the pigeons in the world of residential
It was an appeal by the leasehold owners of chalets in a holiday park in
Devon against a ruling by the County Court regarding the landlords’ failure to
consult before carrying out qualifying works.
Court had held that the correct approach was to 1) identify which items
constituted qualifying works, 2) consider whether they constituted one or more
sets of qualifying works (i.e. a project-by-project approach) and 3) assess
whether the total cost of each project exceeded the statutory cap of £250 per
leaseholder. This followed the reasoning
of the Court of Appeal in Martin v Maryland Estates in 1999.
Court disagreed, and decided it didn’t have to follow the Maryland case because
it predated the changes introduced by the Commonhold and Leasehold Reform Act
2002. The judge felt that there was
nothing in the legislation that required the £250 cap to be applied on a
project by project basis. Instead, a landlord
had to assess the qualifying works that it expected to carry out over the service
charge year and decide whether the total cost of all of the works
crossed the threshold, in which case it would have to consult.
does the decision depart dramatically from the standard approach that
practitioners had adopted following the Maryland case, it also leaves a number
of questions unanswered. For instance, if
the landlord consults on a large project, does he have to consult on smaller
projects as well even if the total cost of all of the smaller projects over the
course of the service charge year is less than £250 per leaseholder? We will have to wait and see.
by Richard Housley, Associate