Often landlords and management companies use the repairing covenant in their leases to justify invoicing tenants through the service charge for the replacement of items that are not in disrepair but which would benefit from replacement.
A recent case (Tedworth North Management Limited v Mr L Miller [2016] UKUT 0522 (LC)) ruled that the tenants of a property did not have to contribute towards the costs incurred by their management company in supplying and fitting metal sub-frames as part of a programme of replacement of the windows. The decision was no doubt influenced by the fact that the tenants in only 28 of the 49 flats at the property agreed to pay for the works as others had already carried out the works themselves or were happy to make do with the existing windows.
The court concluded that no part of the cost of the work fell within the management company’s repairing obligation or the tenants’ obligation to contribute to it through the service charge of the building. The reasoning was that the window frames and the windows themselves had not been in a condition which justified their replacement. The only defect in most of the windows was that they needed a coat of paint in accordance with the decorating covenants in the lease. Unless the items were in disrepair the management company could not use the repairing covenant to justify invoicing the tenants for the elective replacement and resulting modernisation and improvements to the building.
It is clear from this decision that a common-sense approach is required when assessing the nature of the remedial work appropriate to remedy a state of disrepair. To illustrate, the example of a roof is given. If the greater part of the roof is in a deteriorated condition, the fact that some parts are undamaged would not prevent replacement. On the other hand, if the deterioration is localised to a small area and could be adequately dealt with by an isolated repair, the whole of the roof could not be said to be in disrepair to require or justify its complete replacement. The general principle is that the work which is obliged or entitled to be carried out is limited to that which is reasonably required to remedy the defect. This may include ancillary work required due to the carrying out of the repairs.
In circumstances where there is an obligation to repair, the parties can choose between different methods of repair as long as the method is reasonable. The party which is obliged to carry out the repairs may choose the method of repair. However the paying party is not entitled to dictate that the cheapest method is used.
Here the fact that the tenants could choose whether or not to have their windows replaced showed that they were not in a true state of disrepair. The decision to replace the window frames was motivated by other benefits such as heat insulation and noise reduction. Arguably replacement would have been justified on economic grounds due to the reduced maintenance cost of the new metal windows which did not require decoration every five years, incurring hefty scaffolding costs. However the decision to replace was not justified on the grounds that the windows were in such a state of repair that they required replacement.
The works to the windows were carried out under a single contract which included works. In these circumstances it was necessary for the total cost of the contract to be apportioned between recoverable items under the service charge and irrecoverable elements.