Leaseholder supported on challenging costs by upper tribunal

Miss Waaler, one of 140 leaseholders on the Ivybridge estate owned by Hounslow Council, was charged £55,000 for improvement works which included replacement of roofs, windows and exterior cladding and the removal of asbestos. The charge was upheld by a first-tier tribunal.

However, in a landmark upper tribunal decision on 26 January, judge Siobhan McGrath upheld Miss Waaler’s appeal against the first-tier tribunal ruling.

Judge McGrath said some of the works were non-vital ‘improvements’ as opposed to vital repairs, which leaseholders have to agree to fund under the terms of their lease.  Judge McGrath said for non-vital works landlords must consider leaseholders ‘views on the proposals and the financial impact of proceeding.’

A barrister, who did not wish to be named, said the ruling means landlords ‘must consider alternative and less expensive remedies, and give greater weight to the views of leaseholders’. Giles Peaker, partner at Anthony Gold solicitors, said: ‘I think it’s a significant decision and one that a lot of leaseholders will look to.’

Mick Donnellan, partner at Trowers & Hamlins and expert in real estate disputes, said: ‘I think landlords will now have to give more thought to improvements. More transparency and justification will now be needed in the process.

‘It may lead to landlords looking very closely in future on whether something is a ‘repair’ or an ‘improvement.’

In her decision, judge McGrath found that the council was justified in carrying out repairs to the roof, but that the council could not justify its work to windows and exterior cladding on ‘extremely speculative’ costings.

The management decision to replace windows and cladding includes ‘no evidence that the cost of the work to leaseholders was taken into account’, the decision states, and there is ‘in fact, very little evidence to demonstrate how or why the decision was taken at all.’

A further first-tier tribunal hearing will decide by how much the charges to leaseholders should now be reduced.

A Hounslow Council spokesperson said: ‘The council is reviewing the judgement and considering its options.’