The statutory service charge consultation procedure in a nutshell, by Robert Highmore & Malcolm Dowden
In Daejan Investments v Benson [2009] UKUT 233 (LC) the landlord sought to recover £270,000 from five tenants in respect of work to their building. The Leasehold Valuation Tribunal (LVT) ruled that Daejan had not complied with the statutory consultation requirements for residential service charges under the Service Charges (Consultation Requirements)(England) Regulations 2003 (SI 2003/1987). Consequently, it could claim only £250 from each tenant, recovering £1,250 rather than the £270,000 cost of the works. The Lands Tribunal upheld that ruling, finding that the landlord’s failure to follow the stage 2 consultation process nullified the tenants’ statutory right to make further representations following examination of the estimates obtained by the landlord.
On 20 April 2010, in Paddington Basin Developments v West End Quay Estate Management [2010] All ER (D) 139 (Apr), Lewison J ruled on a preliminary issue against the landlord in a case involving the recovery of more than £1m of service charges. He held
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