Cases - Avon Ground Rents Ltd v Cowley and others
Record details
- Name
- Avon Ground Rents Ltd v Cowley and others
- Date
- [2019]
- Citation
- EWCA Civ 1827
- Legislation
- Keywords
- Service charges – advance contributions – remedial works – s.19(2) of the Landlord and Tenant Act 1985
- Summary
-
A mixed-use building had a defective membrane, which allowed water to penetrate through its surface affecting a central courtyard. The landlord was responsible for remedying the defect. The landlord was entitled to demand through the service charge provisions of the residential leases the anticipated costs of the works in advance.
The building had the benefit of National House Building Council (NHBC) warranties and the NHBC had agreed to cover the costs of some of the remedial works. The landlord intended to give the lessees credit for any sums received under the warranties, but first sought payment of the service charge demands in full.
The lessees applied to the First-tier Tribunal (FTT) for a determination as to whether the service charges were payable and reasonable. The FTT determined that the works were necessary and the costs reasonable in amount. However, the FTT found that under s.19(2) of the Landlord and Tenant Act 1985 (the 1985 Act), credit had to be given to the lessee for the monies the landlord was to receive from NHBC. The Upper Tribunal (Lands Chamber) (UT) upheld the decision.
The landlord appealed. It argued that under the terms of the leases the lessees were obliged to pay full sums demanded.
The Court of Appeal upheld the decision. The starting point was the contractual position between the parties followed by the relevant statutory position; Knapper v Francis [2017] UKUT 3 (LC), followed.
Section 19(2) of the 1985 Act modified the contractual obligation of the lessees to the extent that no greater amount than was reasonable was payable before the relevant costs were incurred. The landlord had to give the lessee credit for the sums received under the warranties. This would avoid the risk of double recovery.