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Archive for March, 2012

Repair v Improvement

The age old argument re repair v improvement raised its head again in the Upper Tribunal (Lands Chamber) - commonly known as “the Lands Tribunal” - in Craighead and others v Homes for Islington Ltd and another [2010] UKUT (LC).  Although a case concerning residential premises, the finding in respect of the nature of the works conducted relates to all properties.

The landlord spent £5.7m conducting required remedial works to windows - a sum which it then charged to the tenants’ service charge as repairs.  Single glazed windows were replaced with double glazed windows as required by the building regulations.  The tenants claimed the works constituted improvements and not repairs although it was common ground between the parties that, in the absence of intervention by English Heritage (the building was listed), the works were the only lawful way of effecting the remedial works.

The Lands Tribunal found that the landlord was under an obligation to repair the windows and that the necessity for the works, including the standard to which they were carried out, was not disputed.  It further found that the landlord could only lawfully do the works using double glazing.  It had been found as a fact by the lower tribunal (the LVT) that the extra cost between single and double glazing was 13% of the cost of the works.  The Lands Tribunal held this extra expenditure was necessarily incurred and whilst double glazing was an improvement in terms of functional efficiency, the total cost was properly incurred in effecting repairs.  It was therefore properly included in the service charge.  The question of whether the landlord could have recovered 87% of the cost of the works if double glazing had not been necessary was left hanging in the air although the Lands Tribunal said “there was no rule of law that a landlord must always recover all of its expenditure” - an interesting comment.

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