This decision has caused huge confusion because, on the face of it, all works to a building or premises will require consultation if the statutory cap of £250 per leaseholder will be exceeded for that year. This is simply unworkable for property managers and landlords and will result in confusion, an increased burden on the LVT and increased costs which, of course, will ultimately be borne by leaseholders. This seems to fly in the face of the protection for leaseholders that section 20 is intended to provide and it is hoped that the Chancellor's decision will be reversed by the Court of Appeal.
In short, the former Chancellor changed the statutory limit for consultation under section 20 of the Landlord and Tenant Act 1985 from the cost of the works to the amount of the contribution demanded from the leaseholder. As a result, the current legislation does not require the qualifying works to be identified as one or more sets of works, nor is there a triviality threshold applicable to any separate works. The Chancellor did not stop there, but went on to find that as service charges are paid on an annual basis, the limit is only applicable to all qualifying works carried out in a single calendar year.
The landlord in this case has submitted a request to the court of appeal to grant permission to appeal the decision in the High Court which overturned accepted practice for S20 consultation.
The request to appeal is late but it is hoped that the public interest in the outcome of an appeal will convince the Court of Appeal to grant an appeal. ARMA has submitted a letter of support to the Court of Appeal setting out why it thinks that an appeal hearing is required in the interests of good property management, RMCs and leaseholders. The application is supported by leading independent bodies in the property management sector, including the RICS, the ARMA (the Association of Residential Managing Agents), the British Property Federation and Institute of Residential Property Management, all of whom have written in support of the case.
HSCPM are monitoring progress with great interest.
© Hurford Salvi Carr 2019 | Company number 03259200. Registered in England. | 3 Castle Gate, Castle Street, Hertford, Herts, SG14 1HD