Fire Safety Work & Cost Recovery via the Service Charge
JB Leitch secure an important determination at the First-tier Tribunal for the recoverability of costs for urgent fire safety work costs under the service charge.
With considerable attention being given to the urgency and liabilities surrounding building safety, notably with the reach of the new £1bn remediation fund, the new Fire Safety Bill or concerns around EWS1 and safety certification, this week sees JB Leitch secure a determination on the cost liabilities associated with safety works and the reasonableness of cost recovery via the service charge. This decision is both timely and significant given the ongoing debate and uncertainty on the extent to which landlords and Managing Agents should be liable.
JB Leitch represented the Applicant Landlord in an application under section 27A of the Landlord and Tenant Act 1985, for a determination of liability to pay and reasonableness of service charges against the Respondent leaseholders at the development.
The application related to urgent fire safety work, specifically the replacement of flat and communal area doors, ancillary works to frames surrounding panels and separate parcel boxes that had been identified as damaged and failing to comply with FRA standards. The main issue for our client was whether the apartment door sets were demised to the leaseholders and would be part of their repairing covenants and not a service charge or were part of the landlord’s repairing obligations and are a service charge. Of specific focus was:
· The replacement of doors, frames and surrounding joinery in communal areas
· The replacement of doors, frames, parcel boxes and side panels to the individual flats.
Once recoverability had been determined under the charge, our client confirmed to the Tribunal that consultation would subsequently begin under sections 20 and 20ZA of the Landlord and Tenant Act, and that quotations for the works had already been obtained.
Lease clauses and the service charge mechanism:
In presenting the agreed obligations of both parties within lease covenants, attention was drawn to the pertinent terms and clauses on the service charge and maintenance. Clause 4(3) provides that the lessor will “maintain in good and substantial repair and condition” the external main walls, the internal concrete walls, main hall, staircases and landings. Clause 2(1) of the lease outlines that the lessees are obligated to pay the service charge and notably that that charge provisions consist of services stated in clause 4.
The Tribunal concluded that:
· The replacement of the communal door sets is covered by the landlords covenant at clause 4(3) and the leaseholders are liable to contribute to the costs of the works through the service charge.
· The individual door sets are not covered by the landlord’s covenant at clause 4(3) and the leaseholders are not liable to contribute to the costs of the works through the service charge –although leaseholders will be responsible for their own entrance door sets and will need to carry out the works themselves under their repairing obligations.
· The section 20 consultation should be carried out in respect of the communal doors, which should produce a quotation that could be considered reasonable by the FTT. The process will also allow for any concerns raised by the responding leaseholders to be addressed.
· Although the flat doors are not a service charge, it worth noting that there is no reason why the work cannot be arranged and co-ordinated by the landlord or managing agent and dealt with as a separate contract between the landlord and leaseholders who agree to such an approach.
The decision also illustrates that demised premises refer to individual fats and not the block, and that an entrance door to a flat is the leaseholder’s obligation as it is part of the flat when constructed. In relation to the final bullet point above regarding flat doors, this would be likely be taken up by the majority of the leaseholders as it will be easier and likely result in a cost saving as opposed to having to appoint contractors individually.
In conclusion, the decision provides a timely reminder of the significance of the service charge in both maintaining property and ensuring sufficient levels of safety. Despite the current crisis, service charge recovery is integral to providing adequate provision to conduct urgent building safety work, and in accordance with the terms of the lease and subsequent consultation, ensuring reasonable apportionment of cost.
Fort further information on this case and our experience in building safety matters contact Katie directly: firstname.lastname@example.org