Service charge consultation—no £250 limit for advance payments (23 Dollis Avenue (1998) v Vejdani)

Service charge consultation—no £250 limit for advance payments (23 Dollis Avenue (1998) v Vejdani)

What are the statutory residential service charge requirements; when do they apply and what are the practical implications of this case?

The £250 recovery limit for residential service charges, where the statutory consultation requirements have not been complied with, does not apply to payments by way of service charge requested in advance for intended works. It was open to the landlord in question to correct the lack of compliance —here, insufficient estimates.

What was this case about?

Landlord and Tenant Act 1985, s 20.

The case related to the statutory consultation requirements for residential service charges. A landlord must consult with its tenants before:

  • carrying out major works to its building (where each tenant's contribution will exceed £250), or
  • entering into a long-term agreement to provide services (eg property management) where the cost to each tenant will exceed £100

Where works of repair, maintenance or improvement involve costs requiring each tenant to pay more than £250, the landlord must follow the two-stage consultation procedure.

The landlord must serve notice on the tenants. The notice must:

  • describe the proposed works in general terms (or specify a place and time where a description can be inspected)
  • state why the landlord considers it necessary to carry out the works
  • invite written observations and provide an address and a timescale for receipt, and
  • invite the nominations of parties from whom the landlord should obtain estimates

The tenant must be given 30 days from the date of the notice in which to submit observations and to suggest alternative contractors. The landlord must then obtain at least two estimates for the work, one from a contractor wholly unconnected with the landlord.

The landlord must obtain an estimate from any contractor that a tenant has nominated.

The landlord must then prepare a statement for at least two of the estimates, setting out the estimated costs of the works and providing a sum

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