Cases - Reedbase Limited and another v Fattal and others

Record details

Name
Reedbase Limited and another v Fattal and others
Date
[2018]
Citation
EWCA Civ 840
Legislation
Keywords
Service charges – consultation – Service Charges (Consultation Requirements) (England) Regulations 2003 – repair covenants
Summary

One of the issues the court had to determine on appeal was whether the court below had erred in holding that the landlord had sufficiently consulted with the appellant tenants on its proposal to replace terrace tiles previously laid by them.

The costs of the works to the roof were added to the appellants’ service charge. Before starting the works, the respondent management company went through the statutory consultation requirements set out in the Service Charges (Consultation Requirements) (England) Regulations 2003 (the Regulations). The proposal for the works were circulated to the lessees and estimates obtained and made available for inspection to the tenants.

The appellants argued that the landlord breached the Regulations by failing to repeat the second stage of consultation arising from changes to the proposals for retiling the roof.

In dismissing the appeal the court found that there was no requirement to repeat the second stage of consultation.

The court recognised that neither the Regulations nor the Landlord and Tenant Act 1985 (the Act) provided guidance as to when the second stage of consultation should be repeated. In the absence of such guidance, the court stated that the test for when a fresh set of estimates must be obtained was whether in all of the circumstances, the tenants had been given enough information from the first set of estimates. This involved an objective comparison of the information provided about the old and new estimates. Further, it also had to be considered whether, in all the circumstances, including taking into account the position of the other tenants who did not object to the changes, the protection to be accorded to the tenants by the consultation process was likely to be materially assisted by obtaining a fresh estimate.

In the present case, the appellants, who were seeking a fresh tender, knew about the change in the works and approved it. The change in costs associated with the new proposal for the roof was relatively small in proportion to the full costs of the works, especially when account was taken of the fact that the increase in costs was due to the appellants’ choice of tiles, which was primarily for their sole enjoyment and yet was being borne through the service charge. Further, there was no evidence that there would be a cost saving, but time would be lost due to the retendering process, which might prejudice other tenants. Lastly, the appellants had the protection of s.19 of the Act and could challenge the inclusion of unreasonable costs in the service charge.