Service Charges and Fire Safety Works in High-Rise Blocks

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High-rise residential blocks providing social housing sprung up in cities around the UK in the 1950s. It was said they offered greater living and recreational spaces together with unrivalled views across city landscapes. They were celebrated as a remedy to the dilapidated Victorian housing which had survived the destruction of the blitz. However, they were built at lightening speed and were of poor quality. They deteriorated as quickly as they were built and soon became a blight over the horizon and dens of petty crime.

Many have been demolished but over 4000 high-rise blocks remain across the country. Restricted by budgetary and logistical constraints, local authorities have struggled to manage and keep these blocks and their surrounding estates in good repair. Generally, councils carry out a cyclical programme of maintenance every 10 to 15 years but many blocks have suffered historic neglect resulting in the need to replace and update major items such as lifts, roofs and heating systems at great financial expense.

In 1980, the Housing Act introduced the right to buy, giving most secure tenants of councils the legal right to purchase their property after 3 years and there are plans to extend this right to housing associations. The discount which is applied to the sale price has risen sharply in recent years and almost 2 million properties have been purchased under the scheme. Many of these have been sold on but many still house the original right to buy tenants. Sadly, some of these tenants fail to understand the financial obligations of home ownership on a council estate beyond their mortgage instalments. Their leases require them to pay an annual service charge. Very often this amounts to several thousands of pounds with additional charges of tens of thousands of pounds for ‘major works’ quite common.

Very tragic events such as that at the Grenfell block have alerted local authorities to a much needed review of fire safety on their estates. Amongst other measures, the cladding which encases some blocks is being replaced and sprinkler systems and fire wardens installed. Councils are ensuring that they take every action they can to fulfil their responsibilities as landlords under the legislation governing fire safety and will inevitably look to recover some of that cost from their leaseholders.

However, it is not only local authority landlords who are taking action. In January 2018, in the case of E & J Ground Rents No.11 LLP v various leaseholders of Fresh Apartments, Salford, Manchester, the First-tier Tribunal (Property Chamber) (FTT) found in favour of the private landlord that the cost of providing fire marshals for a “waking watch” (as an interim fire protection measure whilst cladding was analysed for safety and possible replacement) was recoverable through the service charge under the terms of the lease and the leaseholders were liable to pay towards its £100,000 cost.

More recently, the FTT has heard a further case involving a block in Croydon, London where leaseholders may be liable to pay towards a £2 million bill for the replacement of defective cladding similar to that of Grenfell. Some leaseholders will be faced with the very real prospect of having to sell their homes to pay their share of the cost.

It would seem that fire safety reviews are adding to the level of service charges demanded by not only local authority but also private landlords across the country.

It must be stressed that every case depends on the wording of the lease and the services or works undertaken. Sections 19, 20 and 21 of the Landlord and Tenant Act 1985 also set out a clear framework for levying these charges. They must be reasonably incurred and demanded in a strict format. In certain cases, leaseholders must be consulted in advance of the charges being incurred. The services or works must also be of a reasonable standard. Failure to comply with the terms of the lease or the legislative requirements may invalidate a demand and render the charges irrecoverable.

If you are a leaseholder who wishes to dispute a service charge demanded by your landlord; or you are a landlord who wishes to ensure the correct procedure is followed when demanding a service charge or is facing a dispute, please contact Dominic Danvers on 020 3861 5054 or ddanvers@meaby.co.uk.

Meaby&Co. has a very experienced team of solicitors who can help you.

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