It is the time of year when the Great British weather batters buildings up and down the country causing signs to fall off some and roofs to cave in! Beware, though, if you are the Landlord or manager of a mixed use building – emergency repairs may cost you more than you think.
Section 20 of the Landlord and Tenant Act 1985 contains detailed provisions regulating residential service charges. If you are the Landlord or manager of a mixed use building which includes long residential leases (i.e. leases longer than 21 years) you will need to comply with Section 20 if you want to recover service costs in full from your residential tenants.
Section 20 imposes a two and sometimes three part consultation procedure for one-off expenditure that would result in a re-charge to any individual residential tenant of more than £250 (“Qualifying Works”). This procedure can take two to three months and applies to all Qualifying Works, urgent or not.
If urgent repairs are required (for example for health and safety reasons), it is possible to apply to the First Tier Tribunal for a dispensation which effectively disapplies all or part of the consultation requirements. This procedure in itself takes approximately 6 weeks and will not assist where urgent works are required.
If you carry out Qualifying Works without going through the consultation procedure and without obtaining emergency dispensation, you may only be able to recover £250 per residential tenant. In some cases this could be extremely costly.
There is no formal “urgent works” procedure currently in place, but accepted market practice is to start emergency Qualifying Works immediately but at the same time apply to the First Tier Tribunal for dispensation from Section 20. Dispensation cannot be guaranteed, but if emergency works are genuinely required (and are not the result of poor building management) it should be forthcoming. It may also be the case that the risk attached to not obtaining dispensation is lower than the risk of allowing a potentially dangerous situation to continue.