Landlord not entitled to recover cost of improvement works as less expensive methods not considered
In Waaler v Hounslow LBC the Upper Tribunal (Lands Chamber) held that landlords must take into account the availability of alternative less expensive remedies and the views and financial means of their tenants when deciding whether service charge costs for improvements are reasonable.
The landlord replaced the window units in a block of flats as the hinges were inadequate to support the weight of the glass. The Upper Tribunal found that replacing the units was an improvement not a repair. Under the lease the landlord was entitled to carry out improvements and recover the costs from the tenants through the service charge. However, under section 19(1) of the Landlord and Tenant Act 1985 (LTA 1985) the landlord may only recover such costs if they are reasonable.
The court stated that although section 19 makes no express distinction between repairs and improvements, the approach when determining what was reasonable must be different. A landlord will usually be under an obligation to repair, whereas improvements are usually a matter of choice. Therefore, where the cost of improvement works is high, the landlord must consider whether alternative less expensive methods are available and the financial means of the tenants.
The design defect had been managed for over 30 years by replacing the hinges. Although it was no longer possible to obtain the hinges, there was no evidence that the landlord had considered alternative less expensive methods of managing the defect such as replacing the glass with lighter panes. There was also no evidence that the landlord had considered the financial impact the replacement would have on the tenants. Therefore, the landlord was not entitled to recover the costs.
This decision increases the administrative burden on landlords who must now show that they have considered alternative methods of improvement works. However, the decision is welcomed by tenants as a further safeguard against unreasonable service charges.