On the First Day of Christmas – Catherine Dear
On the first day of Christmas… Today Catherine Dear from Irwin Mitchell’s Real Estate Disputes team examines the case of Radcliffe Investments Properties Ltd v Meeson where a judge considered a landlord’s ability to recover costs of the waking watch by way of service charges under the LTA 1985 as unreasonable when the landlord failed to conduct or update a fire risk assessment.
The Upper Tribunal (UT) in hearing an appeal from a landlord has held that a landlord was precluded in recovering the costs of a waking watch from leaseholders, if these costs derived from its own failure to conduct or update necessary fire risk assessments. The building in question needed a fire risk assessment under Article 9 of the (Fire Safety) Order 2005 (RR0 2005).
Facts
In 2018, the former office building was converted to flats. Preceding the conversion however, a fire risk assessment had assessed the risk of harm in the event of a fire as “moderate”. The landlord took no further action despite the fact it was required by statute and the fire safety assessment had stated that the building should be reviewed annually or in case of a material change.
In May 2019, a water leak had damaged the building’s fire panel causing the fire service to attend. The fire service expressed numerous fire safety concerns with the building and recommended that a waking watch was implemented. The waking watch was implemented and discontinued in September 2019 after remedial works were carried out, resulting in costs to the leaseholders in the sum of £57,894.
Issues to be decided
The parties agreed that there should have been a waking watch established. Nonetheless, the leaseholders sought a determination under s27A Landlord and Tenant Act 1985 (LTA 1985) that the costs in these circumstances had not been reasonably incurred.
The First Tier Tribunal (FTT) in the first instance held that the waking watch costs were a direct cause of landlord’s failure to comply with Article 9 BRO 2005 and consequently were unreasonable.
Reasoning
When considering the reasonableness of costs, the UT held that the specific circumstances of how these costs were incurred were a consideration based on the facts of each case.
The UT detailed that if the landlord had complied with their statutory obligations and commissioned an updated fire risk assessment, the landlord would have been aware of the works required to correct fire safety defects and the building would not require a waking watch. This rendered the costs of the waking watch as avoidable and therefore unreasonable under s19 (1) LTA 1985.
Implications
Challenges to service charge costs under LTA 1985 will weigh up specific facts of each case (and why these costs were incurred) when assessing their reasonableness. A landlord negating to abide by its statutory obligations could render avoidable service charge costs as unreasonable.
