Landlords benefit as Supreme Court overturns service charge decision

On 6 March 2013, the Supreme Court delivered its eagerly anticipated judgment in Daejan Investments Ltd v Benson. The court overturned the earlier decisions of the Court of Appeal and the relevant tribunals and, in doing so, set out some of the key principles to be applied when considering applications for dispensation from statutory consultation with leaseholders in residential service charge cases.

Daejan gave notice to long leaseholders of a block of flats of its intention to carry out major works on the properties. Daejan sought to recover just under £280,000 from the tenants in relation to the works. The Leasehold Valuation Tribunal (LVT) found that Daejan had not complied properly with the consultation requirements under section 20ZA(1) of the Landlord and Tenant Act 1985 and accordingly reduced the tenants’ liability to £250 each…

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