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When does a residential landlord's duty to consult on service charge works arise? The Court of Appeal has reversed a controversial High Court decision, confirming that the High Court’s ‘aggregated’ approach to qualifying works was wrong.
The Landlord and Tenant Act 1985, s 20.provides that the service charge contributions recoverable from tenants in respect of 'qualifying works' are limited to the 'appropriate amount' (currently £250 per tenant) unless the consultation requirements have either been complied with in relation to the works or dispensation has been obtained.
Before the High Court decision in Phillips v Francis  All ER (D) 225 (Dec), the generally accepted view was that the correct approach to the meaning of 'qualifying works' was to identify separate sets of works or projects for the purpose of identifying whether the relevant costs exceeded £250 per tenant so triggering the statutory consultation process.
In the High Court, the Chancellor decided that the correct approach was to aggregate all works in any given year (aggregating approach) without division into separate sets of qualifying works (sets approach). The decision is unpopular with landlords and has been the subject of considerable criticism. The Secretary of State intervened in the appeal to the Court of Appeal because:
'...the point raises a question of statutory construction of public importance with the potential to affect a large number of residential landlords and tenants throughout the country. The Chancellor had construed the legislation in a way which is at odds with what, it seemed, had previously been the general understanding of the position'
Phillips and another v Francis and another (Secretary of State for Communities and Local Government)  EWCA Civ 1395
The Court of Appeal decided that the aggregating approach in interpreting 'qualifying works' in LTA 1985, s 20 was wrong:
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