s20 Landlord and Tenant Act 1985
Does the duty to consult under section 20 of the Landlord and Tenant Act 1985 fall on the superior landlord or the intermediate landlord?
Answer: the superior landlord!
The Upper Tribunal (Lands Chamber) have recently considered whether, for the purposes of the consultation requirements under section 20 of the Landlord and Tenant Act 1985, where the superior landlord intends to carry out works or enter into a long term agreement, it is for the superior landlord or the intermediate landlord to consult with the subtenants.
The Service Charges (Consultation Requirements) Regulations 2003 provide that the Consultation Requirements are triggered if:
- The landlord plans to carry out qualifying works which would result in the relevant contribution of any tenant being more than £250; or
- The landlord plans to enter into a long term agreement for the provision of services which would result in the relevant contribution of any tenant being more than £100 in any (12 month) accounting period.
When consulting on such matters there are two stages to go through:
- The landlord should consult on their intention to carry out qualifying works/enter into a long term agreement; and
- The landlord must then carry out a second consultation on estimates which the landlord obtains for the works/entering into a long term agreement.
The above requirements assume that s20 does apply.
The tribunal has held that the landlord that is under a duty to comply with these Consultation Requirements is the superior landlord. This is because the superior landlord is the landlord that would intend to carry out the qualifying works or enter to a long term agreement. Failure to comply with the Consultation Requirements could be very costly to superior landlords as the ability to pass on its costs to tenants would be severely limited.
Whilst the outcome of this case (Leaseholders of Foundling Court and O’Donnell Court v The Mayor and Burgesses of the London Borough of Camden and others  UKUT 366 (LC) (10 August 2016)) is good news for intermediate landlords, it is likely to cause difficulty for superior landlords who will not only have to consult with their immediate tenant but also each subtenant who is liable to contribute towards the relevant costs, and those subtenants it needs to consult with may not be easily identified.
It should also be borne in mind that this decision could be overturned by higher courts in the future.