The recent High Court case of Phillips and Goddard v Francis (2012) arguably turns the current agreed approach to Section 20ZA(2) major works on its head, with a requirement to consider qualifying works as a whole when seeking recovery of the costs through the service charge. Brady Solicitors explain the potential impact of the case for property managers.
Whilst major works on an estate have always been somewhat of a hot potato for managing agents, the recent case of Phillips and Goddard v Francis (2012) is likely to impact greatly on clients and agents alike, by effectively removing the practised ‘project-by-project’ approach to qualifying works and replacing it with a requirement to consider all works in total when assessing the need to consult with leaseholders.
The current position on major works is governed by the Landlord and Tenant Act 1985, in particular Section 20, and supplemented by the 2003 regulations. This legislation states that if a landlord wants to carry out qualifying works that will cost a leaseholder more than £250, then he is obliged to consult with those leaseholders. If the landlord does not consult, then the amount that he can recover from any leaseholder is limited to £250. Qualifying works are defined under the 1985 Act as “works on a building or any other premises