Bradys recently had a managing agent instruct them to review and advise on a lease in relation to major works about to begin on a luxury Hyde Park Square apartment block, which would potentially have cost each leaseholder over £100,000.
The major works and Bradys’ brief
The penthouse and top floor flats within the block had noticed water leaks coming into their properties and discovered the source of the leak to be the building’s roof top terraces. Having identified the problem, it was quickly found that the solution was to have a membrane fitted to the terraces, which would then be painted with a waterproof solution to prevent future leaks.
Having established the works needed to be carried out, the managing agent began getting quotes from potentials suppliers and started the S.20 consultations with the leaseholders. Following this, a quote was chosen and dates were arranged for works to begin. However, just before signing the contracts to initiate the start of the works, the managing agent instructed Bradys to review the relevant leases in question to check that the costs were fully recoverable from the leaseholders. However, as works were scheduled to start within the next couple of days, they requested Bradys to carry out the review and provide a report back to them within 48 hours.
Bradys’ approach
Upon review of the lease there were some ambiguities identified which would impact upon the responsibility for the cost of the works required. In certain sections the lease referred to the roof surface being the responsibility of the management agent and in other areas the responsibility of the leaseholders. Bradys’ then began to review case law to identify any previous judgements that had been made to indicate where the responsibility would lie in this scenario, but there was no relevant case law to utilise. After this Bradys went to counsel and leveraged their extensive network of barristers to find someone with relevant expertise, that had the availability to review and advise on the case within 48 hours. The barrister confirmed that should the works go ahead, due to the uncertainties within the lease, it was possible the costs would not be recoverable from the leaseholders.
Advice provided
Bradys advised the client to refrain from beginning works, as this would avoid potential liability and due to current summer weather, would have minimal impact upon the leaseholders. They were then recommended to seek a declaration from the courts, as it would be the best way to gain complete clarity on the matter and avoid a potentially extremely costly error. Whilst Bradys advice may not always be exactly what a Managing Agent wants to hear it is important on major works projects to ensure that the works plans are seen in the context of liabilities created within the lease.
