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Permission to appeal granted in Philips v Francis

19th November 2013|POSTED BY: Admin

Permission to appeal has been granted in the landmark Philips v Francis case. ARMA welcomes this move and hopes it will lead to greater clarity on Section 20 consultations.

The ruling made in December 2012 overturned accepted legal views on how landlords and their agents should comply with Section 20 consultation.

The judge ruled that consultation costs should be calculated culminatively on the basis of work to be carried out in the course of a year - not just on individual 'major works' projects as had previously been the established approach.

ARMA and others in the industry including the Royal Institution of Chartered Surveyors (RICS) have previously voiced their concerns that consultations on building works had been made unworkable by this decision. Any uncertainty over when to consult is likely lead to delays to leaseholders and more expense.

In October 2014 the Court of Appeal overturned the much-criticised decision of the Chancellor in Phillips & Goddard v Francis.

The Court of Appeal has held that the statutory obligation on landlords to consult their tenants is limited to where they propose to carry out discrete sets of “qualifying works” under the Landlord and Tenant Act 1985 which will result in any one tenant being liable to pay a service charge in excess of £250.

In so holding, the Court held that the Chancellor was wrong in his approach which was to add together all the qualifying works undertaken in any one service charge year, without division into separate sets of qualifying works, and hold that there was an obligation to consult if the individual £250 threshold was overtopped in any such year.

The law is, therefore, what leasehold managers have long believed it to be. Martin & Seale- v -Maryland Estates Limited a decision on section 20 of the Act in its pre-2003 form, remains good law.