Service Charge Information

Freeholders/Landlords, if you fail to consult you may have to repair the property for free!

“Freeholders/Landlords who have buildings that have premises that contain long residential leaseholders should be aware that they have a duty to consult residential tenants before undertaking any works of repair, maintenance or improvement where a residential leaseholder is required to contribute £250 or greater”.

A Landlord who fails to follow all of the consultation requirements is prevented from recovering any monies in excess of £250 from their residential tenants. It may be possible to obtain dispensation from consultation requirements if there are good reasons why consultation could not be properly completed. Common situations are where work is required to urgently safeguard the structure or integrity of the building or put right disrepair that would otherwise render the property uninhabitable.

However, Landlords should note dispensation is granted if tenants have not been prejudiced by the failure to consult. It is irrelevant the works are for the benefit of the tenant and the landlord is substantially out of pocket if the tenants have been prejudiced.

Here are some tips to avoid making an application for dispensation or not receiving a tenants anticipated contribution due to a failure to consult:

  1. If there is a recognised tenants’ association within the meaning of the Landlord and Tenant Act 1985 don’t forget to serve them and include them in the consultation procedures in addition to the residential tenants.
  2. Even if copies of estimates are attached to the “paragraph b” notice and statement you must inform the tenants where and when the original estimates are available for inspection.
  3. Document the entirety of the consultation process, even the parts that tenants have no right to take part in! Landlords have a duty to have regard to representations made by tenants. A well-advised landlord will record their consideration and comments on any representations received.
  4. Do not pre-judge the selection of the contractor, recently a Landlord who informed tenants that the lowest priced contractor would be chosen before consultation had been completed was found not to have properly consulted and consequently could not recover £270,000 of repair costs!
  5. The consultation procedure will take not less than two months and if, for any reason, the subsequently chosen contractor is not available to do the works for the price specified in their estimate then the consultation process should be re-started from the time the landlord originally sent out estimates for consideration, together with an explanation why they are taking this step and inviting further representations.
  6. Ensure all documentation is served at the correct address for the tenant particularly where it is known the tenant lets the property.
  7. If during works it becomes apparent more or more extensive works are required than were originally envisaged these will need to have a separate or parallel consultation.
  8. Even if the tenants require works in a hurry ensure you follow the statutory consultation procedures unless it is not practical i.e. it really is an emergency.
  9. Finally, ensure you follow the lease – even if the consultation procedures have been followed properly, if you do not claim monies in accordance with the lease then you cannot recover monies under it!

To discuss these or any other contentious property-related issues in more detail and for further advice for both landlords and tenants, please contact Sam Wakeman  on 0208 658 3922 or Email s.wakeman@pj-h.co.uk