Due to the fact that many people living in the UK are struggling to get on the property ladder the popularity of right to buy programmes has increased dramatically, which is where those living in social houses are allowed to purchase their property after living there for five years at a discounted price. However, during the first five years the property is still owned by the landlord who can make decisions when it comes to maintenance and repairs for the property as long as they consult their leaseholders first.
There have been many disputes over the years between landlords and leaseholders over the cost of property repairs and who should pay how much, a large amount of which have even ended up in court. One such case that has been discussed in the press recently involved the property giant Daejan Investments and the tenants of one of their properties who claimed that the landlord failed to consult them before undertaking repairs on their building. Originally, the courts sided with the leaseholders meaning that they no longer had to pay the sum of £56,000 each, but just the minimum amount of £250 instead.
Now, the UK’s most senior judge, Lord Neuberger, has overturned the decision as he felt that even though the landlord was guilty of not consulting with its tenants properly, the amount the tenants now had to pay was too low. This decision has caused widespread shock across the legal world, as before now courts were known to side with leaseholders over landlords during this type of dispute, and this new decision will change the whole way that these types of cases are resolved.
Discussing the decision, a partner at the law firm Devonshires, Nick Billingham, said: “Lord Neuberger said it wasn’t a charter to ride roughshod over the rules, but that we need to come up with a structure with which they [landlords] have to comply, but if they don’t comply then tenants shouldn’t get a windfall.”
This is good news for social landlords as it means that they will no longer either win or lose in this type of case, but find a new middle ground which is fair for both them and their tenants. It will also be interesting to see how these legal changes will not only affect social landlords, but also private landlords, tenants, landlord insurance providers and other industries that are connected with the rented accommodation sector.