In an important and surprising new decision, landlords (including superior landlords and freeholders) are now liable to serve notice on those who are not even their direct tenants in order to comply with S.20 of the Landlord and Tenant Act 1985.
This section requires a landlord to consult their tenants before carrying out work, or entering into qualifying long tenant agreements, which results in a tenant paying more than £250.
In the case of Leaseholders of Foundling Court and O’Donnell Court v London Borough of Camden and others , it required the landlord to consult with sub-tenants (who are ultimately the ones liable to pay), as well as their own direct tenants. Despite the fact the landlord served notices on their direct tenant, this was insufficient because the sub-tenant was liable for the costs of the works, but notice hadn’t been served on them.
Landlords Take Note
This is a key decision for landlords to note, because failure to do so limits their recovery of costs, from each sub-tenant, to only £250.
It is therefore critical to remember that it is not enough to inform just their own tenants. Appreciating that it may be a difficult task to confirm the identity of every sub-tenant, the court did offer an easier option. They confirmed that writing to “the leaseholders” at each address would suffice, rather than having to obtain each sub-tenants identity. Alternatively, the landlord could seek dispensation from the First Tier Tribunal.
At first blush, this appears to be quite an onerous obligation for the landlord but it is worth bearing in mind that this Upper Tribunal decision could still be appealed to the Court of Appeal. Unless or until this happens however, landlords must still comply. One should bear in mind that this decision does reflect the key purpose of s.20; ensuring that those who are eventually finance the works do not get a nasty surprise and are fully consulted in the process.
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