Cases - 23 Dollis Avenue (1998) Ltd v (1) Nikan Vejdani (2) Nahideh Echraghi

Record details

Name

23 Dollis Avenue (1998) Ltd v (1) Nikan Vejdani (2) Nahideh Echraghi

Date

[2016]

Citation

UKUT 0365 (LC)

Legislation

• Landlord and Tenant Act 1985
• Service Charges (Consultation Requirements) (England) Regulations 2003

Keywords

Service charges – Consultation – Reasonableness – Estimates – Landlord and Tenant Act 1985, section 20, section 19(2) – Service Charges (Consultation Requirements) (England) Regulations 2003, schedule 4

Summary

The appellant was the management company for a house converted into 4 flats (the building). The respondents were long lessees of 2 of the flats. In June 2013 they sent each long lessee a notice of intention to carry out qualifying works to the Building. Three estimates were obtained for the proposed works and copies sent to each of the long lessees requesting written observations in respect of the estimates within 30 days. None were received. On 5 December 2014, the appellant served on the respondents a demand for £10,200 in respect of major works that were intended to be carried out to the building.

The First-tier Tribunal (F-tT) held that the consultation process had not been carried out in accordance with the statutory requirements in so far as the estimates provided by the Appellant were not sufficiently detailed to comply with the Landlord and Tenant Act 1985 (the Act). Further, the demand for £10,200 was unreasonable and therefore the amount payable by each long lessee was to be limited to £250. The appellant appealed the decision.

The Upper Tribunal held that the word ‘estimate’ was not defined in the Service Charges (Consultation Requirements) (England) Regulations 2003 (the Regulations). There was no requirement within the Regulations for estimates to contain unit prices or to contain specific details of the areas upon which the estimates were based. Accordingly, the F-tT had erred in its findings on that issue.

Under Regulation 4(5)(a) of the Regulations estimates had to be estimates for the carrying out of the proposed works. The proposed works were the works described in general terms in the notice served under Regulation 1(2)(a) of the Regulations. Further, the Regulation 4(5)(b) statement had to refer expressly to the estimated costs of the proposed works. None of the estimates submitted by the appellant satisfied Regulation 4(5) of the Regulations because the estimates included work that went beyond the proposed work.

The F-tT, therefore, erred in limiting the amount payable by each long lessee to £250. The statutory limit only applied to claims where work had been carried out and there was non-compliance with the 2003 Regulations. Failure to comply with the Regulations may have been relevant to the question of reasonableness of the amount to be paid under section 19(2), however it was simply a factor to be taken into account.

There was no basis for the F-tT to determine that an on account demand was unreasonable. It was entirely normal for a building contractor to expect payments in advance and as the contract progressed. Further, there was no basis to impose a requirement that a payment in advance was premature until adequate specification including satisfactory references, normal safeguards for security of funds, and supervision of the work had been successfully tendered. Such a requirement would largely emasculate the provisions for payments in advance.