Landlords of residential tenants are required to comply with a statutory consultation process before carrying out major works which would result in each tenant having to contribute more than £250. However, the Upper Tribunal held in the case of 23 Dollis Avenue (1998) –v- Vejdani, that the consultation requirement is not necessary in order to collect a sum in excess of £250 by way of on-account service charge for future works.
The statutory consultation consists of a two-stage process. First, the landlord must give each tenant a written notice of its intention to carry out qualifying works which, amongst other things, must specify details of the proposed works. Secondly, the landlord must give each tenant a statement which includes at least two estimates for the proposed works. In this case, the landlord provided estimates from 3 contractors, all three of which included works which were not specified in the original notice of intention.
The Upper Tribunal held that as the amounts specified in the statement included costs of additional works not included in the original notice of intention, there was a failure to comply with the statutory consultation process. However, this did not prevent the landlord from recovering on-account service charge exceeding £250 from each of the residential tenants. It held that the statutory limit of £250 applied to contributions payable by tenants in respect of cost incurred by the landlord in carrying out proposed works, not in respect of works to be carried out in the future. This indicates that it is not necessary for a landlord to comply with the consultation process before a sum in excess of £250 can be recovered by way of a service charge in respect of intended works. The Tribunal accepted that the failure to comply with the consultation process could have an impact on the reasonableness of the amounts payable by each tenant and it left the door open for the landlord to obtain further estimates for the proposed works.
This case highlights some of the practical challenges that a landlord is likely to encounter when carrying out major works. It recognises that residential tenants may not fully engage in the consultation process. Helpfully, the Tribunal noted that the landlord had at least attempted to comply with the consultation process and that in the absence of any objections from the tenants; the landlord was entitled to conclude that there was no serious objection to the proposed works.