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Landlord left with £270,000 property repair bill after consultation blunder

17 May 2011

Landlords who fail to consult with flat owners before carrying out works cannot expect help from the courts if the tenants refuse to contribute to the expense.

This was the decision of the Court of Appeal, in the case of Daejan Investments Ltd v Benson and Others.

Where flats are sold on long leases there will always be a clause that says tenants must contribute towards the cost of maintaining and repairing the building.

For any leases granted after 31st October 2003, regulations under the Landlord and Tenant Act 1985 say that landlords must consult with tenants about works that they propose to carry out. If the landlord fails to consult, he can recover only a limited amount from each tenant.

In these circumstances, the landlord’s only hope is to ask the Leasehold Valuation Tribunal to order that the requirement to consult should be dispensed with, which the Tribunal may do if it is satisfied that to do so is reasonable.

In the Daejan case the landlord carried out major works to the building at a cost of £270,000. The tenants refused to contribute on the grounds that the landlord had not consulted them properly.

Daejan Investments then asked the Leasehold Valuation Tribunal for an order to dispense with the need for consultation, but the Tribunal refused saying that it had no power to do so solely because of the financial consequences for the landlord. The Court of Appeal has now upheld that decision.

Nicola Tiffen, property law expert at Hay & Kilner commented, “This case is a stark reminder of the perils of not taking professional advice. Here, the landlord incurred expenses of £270,000 on the building work and was only allowed to recover £250 from each of the five tenants. Landlords need to check where they stand and undertake the necessary consultation before embarking on any work, whether it’s small fry or a major investment such as this.”

Please contact Nicola Tiffen on 0191 227 6726 or nicola.tiffen@hay-kilner.co.uk for further assistance or advice.

Please note:
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.