Q&A - Major Works

QUESTION
 
I am a leaseholder within a block of flats managed by local authority. I recently received notification that works for underpinning to 2 flats needs to take place this Summer and internal work relating to subsidence to four flats.  As this issue has been known by local authority at least since 2012 (I suspect earlier). Is there a time limit on bringing this type of work for leaseholders to pay? We are facing having to pay a subsidence excess via our insurance of £1,000 each.  
 
ANSWER
 
It is never pleasant for leaseholders to be presented with a large bill for the costs of works that are said to be required at their block, particularly when works are being carried out to remedy issues that have been within the knowledge of the landlord or management company for some time and should have been addressed much sooner. Under section 20 of the Landlord and Tenant Act 1985 a consultation process is to be carried out where major works, such as those in this situation, will cost any one leaseholder more than £250.00. The legislation while prescriptive does not offer us any guidance as to how quickly leaseholders have to be notified of works and the likely costs of the same once the need to them is discovered. This does not necessarily mean however that a challenge to service charges in respect of major works cannot be brought on the basis of delays – but it is not straight forward or indeed guaranteed to succeed. In the case of Daejan Properties Limited v Griffin and another [2014] the Upper Tribunal overturned a previous decision of Leasehold Valuation tribunal and found that despite there having been historic neglect at a block – the evidence provided to the Tribunal suggested that the works should have been carried out in the 1960’s, the cost to the leaseholders was no more expensive than had the works been carried out when needed. The impact of this decision is that even if there is a delay in carrying out works, to challenge the service charge in respect of the works, the leaseholders must show that they are incurring higher costs as a result of the delay. This will be a matter of evidence. In summation there is no time limit on carrying out this type of work for leaseholders to pay but in order to avoid a successful challenge the Landlord needs to ensure that the leaseholders are not going to incur increased costs as a result of any delay.   
 
Liz Rowen, Senior Solicitor at Taylor&Emmet LLP

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