Supplementary memorandum by LEASE
Thank you for your recent letter requesting
clarification of my answer to question 41 of the evidence session
that Anne Main put to me. I have now been able to find references
for my comments.
First, circumstances where the costs may exceed
the value of the flat in the relevant premises. My comments related
to works on the Chalcot Estate in the London Borough of Camden
that came before the London leasehold valuation tribunal in September
2005. At paragraph 22 of the tribunal's determination (LON/00AG/LDC/2004/0038)
they refer to the comments of David Padfield, the Head of Home
Ownership. The tribunal state:
"22. He gave a sample service charge projection
for a flat in one of the blocks (Bray) The total estimated cost
per flat of the capital and lifecycle works to be carried out
under the agreement was approximately £65,312 at current
prices and £67,861 after allowing for inflation. In addition,
the costs of other maintenance items added a further £16,608
at current prices or £25,498 with inflation. Furthermore,
the PFI partner's costs attributable to leaseholders for works
which were service chargeable was £12,369 at current prices
or £16,5.34 after allowance for inflation. The projected
total service charge liability for a single flat in respect of
works within the agreement was approximately £94,838 at current
prices, or £109,344 after allowing for inflation. This cost
would, however, be significantly reduced by the operation of the
cap under the 1997 and 1999 Directions. He said that, while he
could not bind the Council to a future policy, it was not the
Council's present intention to seek to assert that the benefit
of works, as defined by the 1997 and 1999 Directions, should operate
to raise the cap above £10,000 over a five year period, although
it had to be remembered that the cap only applied to works within
the PFI agreement".
Turning to the window replacement issue, I have
now found the relevant reference. Again, it is the London leasehold
valuation tribunal (LON/00AULSL/2004/0074).[7]
* The case concerned premises in the London Borough of Greenwich
but, it involved windows that had been refurbished three years
previously rather than renewed. The lessees took issue with the
proposed charges and the tribunal determined that:
"[The lessees'] contention was that the
works in dispute were not necessary and that it was therefore
unreasonable for them to contribute towards payment. They did
not dispute [the London Borough of Greenwich's] entitlement to
charge for improvements under the terms of the leases and did
not suggest failure on the part of [Greenwich] to comply with
Section 20 of the Act. The evidence which they produced from experts
was broadly accepted by the [Greenwich].
[Greenwich's] principal justification for replacing
the windows was their requirement to comply with the requirements
of the Governments `Decent Home Initiative' and the Building Regulations.
The Tribunal accepted the statement of Mr Lee that this necessitated
the installation of double glazing which was uneconomic without
the installation of new UPVC windows. However they were concerned
that Mr Lee had failed to produce any written evidence of the
contents of the 'Decent Home Initiative' or a copy of the consultant's
report referred to in his statement. They were also concerned
at the admitted lack of response on the part of the [Greenwich]
to legitimate questions raised by the [lessees] in the past. They
took into account the fact the [lessees] had benefited from [Greenwich's]
inability to recover the costs of the earlier work and that the
replacement of the windows did not adversely affect the external
appearance of the building.
Taking the above factors into consideration they
concluded that [Greenwich] should only be entitled to 50% of the
costs relating to window replacement ie to £1,322.88 for
No 13 and £1,265.36 for No 15. The [lessees] should be entitled
to recover the Application fee but not the other expenses claimed
from [Greenwich]. As the landlords would not seek to recover costs
in connection with the proceedings no order would be made under
section 20C of the Act".
I have enclosed copies of both tribunal determinations
and I hope that , combined with my comments , they clarify matters
for the committee.
Anthony Essien
Principal Legal Adviser
April 2007
7 * Not printed. Back
|
