At your service: a cautionary tale

A landlord of a block of residential long leasehold flats must be alive to its responsibilities in supplying information to and consulting with the tenants prior to carrying out expensive works to the property, or else it may find that expenditure that might otherwise have been payable by the tenants as a service charge cost is irrecoverable, with potentially disastrous financial consequences for the landlord.

In the recent case of Daejan Investments Limited -v- Benson & others [2009] UKUT 233 (LC), it was held that where a landlord had failed to comply fully with the statutory requirements under s.20ZA of the Landlord and Tenant Act 1985 to consult with residential long leaseholders prior to carrying out qualifying works to the building, the LVT had been entitled to conclude, on the facts, that it was not reasonable for it to exercise its statutory power to dispense with the consultation requirements, since the leaseholders had suffered prejudice as a result of the breach.

The fact that this would result in what might be considered disproportionately damaging financial consequences for the landlord - in that the landlord would only be entitled to recover £250 from each of the five tenants, notwithstanding that the cost of the works undertaken was some £270,000 - could not be taken into account, because the effect of the legislation was to allow the Tribunal to dispense with the consultation requirements, not the statutory consequences of non-compliance.

Landlords need to ensure that they are well-informed and properly advised about their statutory responsibilities and this can be particularly so in the case of measures intended to protect individuals in respect of their homes, where the courts are likely to be unforgiving of the shortcomings in landlords' awareness of statutory requirements.

Anything short of full compliance may prove to be an extremely costly business for landlords.