A freeholder of a block flats has to pay £270,000 for repairs after failing to comply with the law over consulting tenants about costs.
The five tenants must contribute a total of £1,250, just £250 each, towards the bill.
Property owner Daejan Investments Ltd lost the case at the Court of Appeal when judges decided the landlord had no right to dispense with the requirements of the Landlord and Tenant Act 1985 over consultation about the cost of works on the block.
The tenants objected to the bill that they would have had to pay through their service charges.
Court caps tenant contribution at £250
The court held that:
- The financial consequences to the landlord were not relevant to the case – the principles of the law apply whatever the sum involved but the costs involved should have made the landlord follow the rules closely
- The law applies to individuals as much as corporate landlords, so the trading status of the landlord is not relevant to the decision
- Regardless of whether the landlord’s actions were deliberate or by oversight, the seriousness of not complying with the law placed the tenants at a significant prejudice.
The court is clearly sending a message to landlords who want to recover costs for repairs and maintenance through service charges that they must comply with the consultation procedure detailed by law or face the financial consequences.
If landlords fail to follow the rules, contributions by tenants will be capped at £250, whatever the cost of the works.