In addition to provisions within the lease, section 20 of the Landlord and Tenant Act 1985 (as amended) require certain notices to be served before a landlord can recover the costs of qualifying works of a value greater than £250 per leaseholder. Should the landlord fail to serve these notices, they may be able to obtain a dispensation from the Leasehold Valuation Tribunal from these requirements. However in the absence of service of the requisite notices and any dispensation, the landlord can only recover a maximum of £250 per leaseholder.
The case of Daejan Investments Limited v Benson recently concerned a block of flats in Muswell Hill, London and recently ended up at the Supreme Court. Within this case Daejan (the landlord) had paid for work of just under £280,000 for a block containing five flats although they had failed to serve the requisite notices. In order to allow them to recover around £56,000 from each leaseholder, Daejan sought a dispensation from service of the notices from the LVT, the Upper Tribunal (Lands Chamber) and the Court of Appeal although were refused. Therefore instead of being able to recover £56,000 from each leaseholder they were limited to £250.
The Supreme Court was asked to consider when the LVT could allow the dispensation. The Supreme Court took a pragmatic view and said that the LVT should look at the prejudice caused to the tenants as a result of the absence of the section 20 notice. Essentially the LVT should consider what would have happened if the section 20 notice had been served and apply the law according to this.
At Benchmark Solicitors LLP we can assist in all landlord and tenant matters including matters concerning the recovery of service charges and major works charges.
Paul Rogers – Solicitor, 3rd September 2013