Q&As

A leaseholder purchased a flat in the knowledge that major works would be required in the future. However, when the works ultimately were undertaken a number of years later they far surpassed the original cost estimate provided. Can the leaseholder refuse to pay?

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Produced in partnership with Shabnam Ali-Khan of Russell-Cooke
Published on LexisPSL on 14/11/2018

The following Property Q&A Produced in partnership with Shabnam Ali-Khan of Russell-Cooke provides comprehensive and up to date legal information covering:

  • A leaseholder purchased a flat in the knowledge that major works would be required in the future. However, when the works ultimately were undertaken a number of years later they far surpassed the original cost estimate provided. Can the leaseholder refuse to pay?

The terms of the lease are the first place to start to determine liabilities and obligations of the landlord and the leaseholder. Usually leaseholders will have an obligation pay service charges.

Section 18 of the Landlord and Tenant Act 1985 (LTA 1985) sets out the definition of service charges as an amount which is payable by a leaseholder. The two key points are:

  1. it is a charge payable towards services, repairs maintenance, improvements or insurance, and

  2. it is variable

Therefore, major works could be service charges if the lease allows the landlord to recover the costs from the leaseholders.

In the above scenario if a leaseholder is liable to pay towards the costs of the major works under the lease then on the face of it they should pay. However, there are several factors in determining the liability of payment in these types of situations:

  1. have the works cost any one leaseholder more than £250? If they have the landlord needs to ensure that LTA 1985, s 20 has been complied with. This is a three-stage consultation process which must be followed before the

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