In Phillips v Francis  1 WLR 741, the Court of Appeal has re-considered the definition of “qualifying works” for service charge consultation and decided that a project of works is to be divided into “sets” of works to determine their value.
The service charge consultation regime (sections 18 to 30 of the Landlord and Tenant Act 1985) gives tenants statutory protection from excessive service charge costs. Failure to comply with the consultation regime results in a statutory cap being applied to what the landlord can recover from the tenant in respect of “qualifying works”, currently £250 per tenant. The Act is silent on how much work amounts to “qualifying works” (section 20ZA(4)).
The court's decision reverses the first instance decision ( 1 WLR 2343) that all works on a building in a given service charge period are aggregated together to give the value to be capped, even if they are distinct items of work. This resulted in landlords going through the lengthy and costly consultation process as a protective measure when works neared the cap.
The decision has been welcomed as it has set out the definition which was missing from the legislation and has provided detailed guidance as to how one “set” of works is to be distinguished from another, including that location, timing and character of the works are all to be considered.