Phillips v Francis - Double charging? No, thank you – a welcomed decision for landlords

24-11-2014 14:52

To the great relief of all landlords the Court of Appeal has given now judgement in this case involving the statutory consultation requirements that apply to certain costs recoverable through residential service charges in the case of Phillips and others v Francis and another [2012] EWHC 3650 (Ch).

Under section 20 of the Landlord and Tenant Act 1985 service charge contributions recoverable from tenants in respect of a single set of “qualifying works” are limited to £250 unless a strict consultation process has been followed. “Qualifying Works” are works on a building or any other premises.

The High Court decided that section 20 should be applied to all “qualifying works” in a particular accounting period if the aggregate cost of those works exceeded £250 per tenant no matter how small the individual cost. This decision caused huge practical difficulties for landlords and increased the costs of management.

However the Court of Appeal decision has pointed out that this produced a nonsensical conclusion that Parliament had not intended. The “single set” approach is the correct approach and the question of what constitutes a single set of qualifying works should be considered in a common sense way taking into account such factors as whether the works are to be the subject of one contract or whether they are to be done at the same time.

If you would like any further assistance with this area of law, please contact our commercial property team.

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