Tedworth North Management Ltd v Miller and Ogorodnov [2016]

Whether modernisation works could be classed as repairs to a property

The background

The respondents occupied flats within a block which was managed by the appellant management company. The appellant undertook a programme of works to replace parts of the window frames at the property, stating that they would replace windows only for flats where tenants themselves met the costs of supplying and installing the new materials. 28 tenants chose to replace their windows, with the remaining 18 declining.

Reports presented during court proceedings indicated that the windows were in generally good condition and well-maintained, with no significant repairs required; the proposed works would primarily upgrade windows to double glazing. The first respondent replaced her own windows at her own expense.

The appellants paid for the replacement works using funds from contributions from tenants who elected to pay for their replacement windows, and from the building’s reserve fund which the appellants sought to recover through the service charge.

The respondents applied to the First-tier Tribunal for determination as to their liability to contribute towards the works.

The First-tier Tribunal concluded that the respondents were not obliged to contribute towards the costs of the works carried out to the windows by the appellant, stating that the windows had not been in a state of disrepair such that they needed to be replaced under the appellant’s repairing covenant. The costs could not therefore be recovered through the service charge. The appellants appealed to the Upper Tribunal.

The law

The leases at the property stated that the management company was to each year:

‘wash and paint in appropriate colours and in a workmanlike manner all the outside wood iron and cement work of the Building usually painted and also at all times…to keep the interior and exterior walls and ceilings and floors of the Building…and the roof structure and the foundations and main drains thereof in good and substantial repair and condition.’

The UT considered whether the works carried out fell within the extent of the repairing covenant; specifically, whether the works could be classed as ‘repair’ works. The court had regard to a number of factors in reaching its decision on this point, including:

• the nature of the building
• the express terms of the lease
• the state of the building and the windows at the start of the lease term
• the defect that the landlord wishes to remedy and its extent
• the extent and cost of proposed remedial works

Further points discussed on the repair covenant issue centred on the value of the building, the effect of the proposed works on value, the likelihood of any recurrence and costs of any alternative works and their impact on use and enjoyment of the property by tenants.

The management company had the authority to choose its own repair methods and does not necessarily have to choose the cheapest option, but nevertheless works must still fall within the definition of ‘repair’.

The decision

The UT dismissed the appeal, concluding that the repairing covenant in the lease had not been engaged by the appellants. There was no right conferred on the appellants to replace the windows as they were not in a state of disrepair sufficient to warrant it, and it was therefore unreasonable for the appellant to carry out a replacement scheme of work.

The respondents were not required to contribute towards the cost of replacement windows in the building through the service charge. The only aspect of the repair covenant which could have been utilised by the management company was the painting of exterior window frames as this was the only identified defect.

Indeed, the fact that the management company replaced only the windows indicated by tenants evidenced that the appellant was aware that there was no need to do so across the building as a whole.

JB Leitch’s Phil Parkinson comments on the case:

“The Tedworth North case is a word of warning to landlords and management companies that, where they wish to undertake works and recover costs from tenants pursuant to a repairing covenant, the works must be deemed to be necessary to remedy a defect. Repairing covenants cannot be relied upon where items are not deemed to be in a state of disrepair and in circumstances where landlords or management companies choose to undertake replacement works.”