Landlord and Tenant
If you are a Landlord you must go through a consultation procedure with your Tenants if you intend to carry out works of repair, maintenance or improvement and the contribution for any Tenant exceeds £250. This consultation procedure also applies if you propose to enter into an agreement for works or services which will last for more than 12 months and will cost any Tenant more than £100 in any 12 month accounting period.
If you do not follow the consultation procedure then the amount you can recover from your Tenant is limited to the £250 or £100. It is therefore important that you make sure you follow the procedure properly or you could be considerably out of pocket.
You can make an application to the Leasehold Valuation Tribunal (LVT) for dispensation from a failure to fully comply with the consultation requirements.
There has been a recent case called Daejan Investments Ltd v Benson (2013) where the Tenants applied to the LVT for a determination of service charges claimed in respect of major works carried out. The Landlord had closed the tendering process before the Tenants had the opportunity of inspecting the estimates. The Landlord applied for dispensation.
Some important principles came out of the case:-
- The question is whether, if dispensation is granted, the Tenants would suffer any prejudice.
- It is for the Tenants to show a credible case for prejudice and it is for the Landlord to rebut it.
- If there is prejudice the LVT can grant dispensation on condition that the Tenants are compensated for any such prejudice.
In the above case the dispensation was granted on the basis that the Landlord reduces the cost of the works by £50,000 and pays the Tenants reasonable costs incurred in dealing with the Landlord’s application for dispensation. Prior to this case the LVT would either grant dispensation or refuse it. In future it is likely the LVT will use its discretion to grant dispensation on terms.
Despite the above case it is still important for you to follow the consultation procedure fully and properly to avoid being in the situation of having to make an application for dispensation. There are of course some situations when you may have to make an application for dispensation for example where urgent works need to be carried out and there is no time for the consultation procedure to be followed.
Our specialist Landlord and Tenants Solicitors can advise you on all aspects of Landlord and Tenant law and can make sure you avoid making costly mistakes.
If you would like advice on Landlord and Tenant issues please contact us.
Jacqueline Penfold
Tina Ripley
Please note the above is for information purposes only and is intended to be a short summary. It should not be treated as a comprehensive guide and should not be acted on without qualified legal advice.
