In a decision dated the 4th September 2014 in the case of Nogueira and others v Westminster City Council, the Upper Tribunal of the Lands Chamber decided to over turn a decision previously made by the First Tier Tribunal (FTT) allowing Westminster City Council to recharge the full cost of Major Works carried out to flats purchased under the Right to Buy on the understanding that the Council would keep to its promise to remedy the numerous defects in the works. To read the full decision click on the link.
The background to this case is that in 2009 Westminster City Council carried out Major Works to buildings containing over 750 flats on the Brindley and Warwick Estates. Leaseholders on these two estates received Major Works bills amounting, in some cases, to nearly £40,000 each. The Leaseholders were not happy, particularly because the works carried out were (by the Council’s own admission) in many instances defective. A group of 35 affected leaseholders, ably led by Mr & Mrs Nogueira and represented by their daughter, applied to the First tier Tribunal to challenge their bills on a number points, not least of which were the defects in the work.
The Leaseholders, in effect, lost their case at the FTT on all points. Most notably the FTT decided that, even though the works were in part defective, the Council should still be allowed to recharge the full cost on the basis that the Council had made written undertakings to the affected residents to remedy the work. The Leaseholders made an appeal to the Upper Tribunal.
The Upper Tribunal decided that the FTT had no authority to accept an undertaking from Westminster City Council that it would remedy the defects and that Section 19 of the Landlord and Tenant Act 1985 applies. Section 19 states that a Service Charge for Major Works is only payable to the extent that the works are carried out to a ‘reasonable standard’.
His Honour Judge Nicholas Huskinson concluded his decision by ordering that the case now be sent back to the First Tier Tribunal for appropriate deductions to be made to the Leaseholders’ Major Works bills.
This case sends a clear message to Landlords. If there are problems with the works carried out they need to fixed before the Leaseholders are charged. Moreover, this case raises some serious questions about the role played by Westminster’s own project management team not least why were the works ‘signed off’ if they were not up to standard? We note that the works were carried out in 2009 and in 2014 the Council are still talking about fixing them. For a supposedly top performing Local Authority this seems a pretty poor performance.