First-tier Tribunal Approves Service Charges for Repairs

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BK/LSC/2019/0031 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : [APPELLANT] Respondent : [redacted] Representative :

Type of application : Determination of liability to pay and reasonableness of service charges under s.27A Landlord and Tenant Act 1985. Tribunal member(s) : Judge S. [NAME] and venue of hearing : 29 April 2019 at 10 [ADDRESS] [POSTCODE] Date of decision : 29 April 2019

DECISION

Decision of the tribunal

The tribunal determines that the sum of £1,112,240.22 budgeted in respect of the estimated cost of carrying out planned external cyclical repairs and redecoration is recoverable under the terms of the respondents’ leases and that the cost is reasonable. This determination relates to estimated service charges only and it does not preclude any application regarding the actual service charges.

The application

1. The applicant seeks a determination pursuant to s.27A of the Landlord and Tenant Act 1985 (“the 1985 Act”) as to the estimated cost of carrying out planned external cyclical repairs and redecoration.

2. The notice of application was received by the tribunal on 23 January 2019.

3. The application relates to the service charge year ending 31 March 2020.

4. Directions were given on 12 February 2019. It was directed that the application was to be determined on paper unless either party requested a hearing. Neither party has requested a hearing. The applicant was directed to serve the application and supporting documents on each respondent lessee. The applicant has confirmed that it has done that.

5. It was directed that if any respondent opposed the application, that respondent should send to the tribunal a schedule setting out the grounds of dispute by 1 March 2019. None of the respondents has made any objection.

6. The works are to be funded from advance service charges already collected. Notices under s.20 of the 1985 Act have been served, but these notices are not the subject of the applications.

Background

7. [ADDRESS] is a pre-war mansion block with nine storeys and a basement. There are 115 residential units and six commercial units on the ground floor.

8. A sample lease, dated 3 June 2004, has been provided. By clause 3.2.1 the applicant has covenanted to maintain and keep in good and tenantable condition the main structure of the building. By clause 3.3 the applicant has covenanted to paint the outside wood and iron of the building at least every four years and to clean as often as shall be necessary the external stone and brickwork.

The requisite works

9. The applicant provided the following documents in support of the application:

(a) applicant’s statement;

(b) administrator’s appointment;

(c) scoping document;

(d) emergency stone works;

(e) specification;

(f) tender analysis.

10. The building has been managed by [COMPANY] (“BEAM”) since 2014.

11. According to the application notice, external works were last carried out in 2012. According to the applicant’s statement, external works were last carried out in 2004. Either way they are therefore overdue. The applicant and BEAM have determined that external repair and redecoration are required in order to keep the building in suitable condition in keeping with the surrounding area.

12. On 21 October 2016, [COMPANY] (“EKA”), building surveyors, was appointed as contract administrator and property manager. A full building survey was carried out and a scoping document prepared dated 9 December 2016. This identified the need for repairs and redecoration. In addition, dangerous structures were identified which required emergency work.

13. A full specification of works (218 pages long) was prepared by EKA on 21 March 2017 and tendered to five companies known to BEAM and EKA, and who have proved to be competent. Each contractor visited the site before tendering.

14. Following the specification and tender process, EKA reported on 25 May 2017 that the lowest tender cost was from [COMPANY] in the sum of £843,660.00 plus fees and VAT. At that time the estimated cost of this tender was £1,112,240.22. So far no notification of an increase in that price has been given.

Decision

15. In the light of what is set out above, the tribunal is satisfied that the cost of the proposed works falls within the service charge and that the estimated cost of the works is reasonable.

Name: [NAME] [NAME]: 29 April 2019

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have.

If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).