News
1 July 2010
Avoid costly pitfalls in respect of residential service charges
Do you let out any properties? Do your tenants pay a service charge? If so, are you or your managing agents aware that unless those tenants are consulted for certain works you may be liable to cover the bulk of the cost for services and work carried out?
The recent decision in Paddington Basin Developments Limited and others v West End Quay Estate Management Limited and another is a useful reminder of the responsibility of landlords and managing agents to consult with tenants in certain circumstances if it wishes to recoup the cost of any work and services. Failure to comply with the Landlord and Tenant Act consultation procedure can be a costly mistake.
A landlord must consult with tenants of a residential development where:
- Work, being any work on a building or other premises such as repairs, maintenance or improvements, is required to be carried out and the resulting service charge to any one tenant is greater than £250.00; or
- a contract for the provision of services, over a period of more than twelve months, is considered and the resulting service charge to any one tenant is greater than £100.00 in any one year.
If you fail to carry out the full consultation procedure you will be unable to charge or claim any more than £100.00 per tenant for service contracts and £250.00 per tenant for works. Any additional costs will remain your responsibility.
The consultation procedure requires notices to be served on each tenant. These notices provide information about the work or services required and invite observations and estimates. In addition you must seek your own estimates and respond to any observations. You cannot award any contract for work or services until all estimates have been considered and reasons for awarding the contract have been provided.
The property team at Beswicks Solicitors LLP will help you work through any consultation procedure and prepare the correct notices to ensure you do not fall foul of this thorny area.
For more information on the procedures and potential pit falls contact Elayna Smith on 01782 205000.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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