Latest Legal News - Landlord Liable for Major Works Costs (March 2011)

Under Section 20 of the Landlord and Tenant Act 1985 a Landlord is under a duty to consult with the tenants where it proposes to undertake "qualifying works" or enter into a "qualifying long term agreement" and the cost is to be claimed through the tenants' service charge. However, a Landlord may apply either prospectively or retrospectively for dispensation from compliance with these consultation requirements.

In a recent Court of Appeal case (Daejan Investment Limited v. Benson & Ors), the court held that a Landlord was not entitled to dispensation from the consultation requirements as this would cause significant prejudice to the tenants. 

The outcome of this case meant that the Landlord could not recover more than £250 from each of the 5 tenants, with the result that the Landlord had to pay close to £270,000 for the major works from its own pocket.

The court did indicate that a less rigorous approach to the question of dispensation may be justified in respect of a lessee-owned block where there is a greater likelihood of the information relevant to the consultation requirements being circulated in an informal way. 

Nonetheless, this case demonstrates that Landlords must observe the consultation requirements to avoid potentially severe consequences. 

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