Tribunal Rules on Lessee's Liability for Roof Repair Costs in Crisplane Limited v Plymouth Community Homes Limited

Citation: [2024] UKUT 15 (LC)
Judgment on

Introduction

In the case of Crisplane Limited v Plymouth Community Homes Limited, the Upper Tribunal (Lands Chamber) was called upon to adjudicate an appeal against a decision made by the First-Tier Tribunal (Property Chamber). The central legal question pertains to the liability of the lessee, Crisplane Limited, to contribute through a service charge towards the cost of repairing roofs of two blocks of flats owned by Plymouth Community Homes Limited.

Key Facts

Crisplane Limited holds long leases for two flats from Plymouth Community Homes Ltd, with one in each block of a two-storey “Cornish Unit”. The First-Tier Tribunal had previously concluded that Crisplane Limited was obligated to pay £7,965.60 for roof repairs carried out on each building, a decision that was later challenged in the Upper Tribunal. The core of the issue revolves around the interpretation of the leases, the Housing Act 1985, specifically section 122 and Schedule 6, and whether such an obligation to contribute to roof repairs existed.

The Tribunal’s analysis centered on the interplay between specific provisions of the Housing Act 1985 and the express terms of the leases. It addressed the statutory right to buy provided by Section 122 of the Housing Act 1985, and the associated obligations under Schedule 6, which concerned the terms of the leases including the landlord’s and tenant’s repair responsibilities.

The Tribunal emphasized several key principles:

  1. Implied Covenant (Schedule 6, 1985 Act): An implied covenant under paragraph 14(2) of Schedule 6 necessitates that the landlord is responsible for the repair of the structure and exterior of the dwelling-house and the building within which it is situated.

  2. Express Obligations in Leases: Whether express obligations in leases, which appear to modify or exclude the statutory implied covenant, are enforceable without the authorization of the county court as required by paragraph 14(4) of Schedule 6.

  3. Reasonableness (Schedule 6, Paragraph 5): The leases could only include covenants and conditions that are “reasonable in the circumstances”.

  4. Tenant Liability (Schedule 6, Paragraph 16A): A lease under the statutory scheme may require the tenant to contribute a “reasonable part” of the landlord’s costs in discharging obligations implied by paragraph 14(2).

  5. Interpretation Guide: In the absence of direct statutory guidance, the Tribunal must interpret the terms of the leases, considering the legislative framework as a background aid rather than a determinative factor.

The Tribunal also discussed the importance of construing service charge provisions restrictively and expressed reluctance to imply terms that were not clearly intended by the parties.

Outcomes

The Tribunal concluded that the leases, in their final form, did not intend to make the lessee liable for half the repair costs of the roofs through service charges. Notably, it held:

  • For No. 146 (ground floor flat), the roof was part of the reserved premises and the lessee had no obligation to contribute to its repairs under paragraph 12 of the Third Schedule due to the express terms of the lease which exempted the lessee from liability for roof repairs.

  • For No. 96 (upper floor flat), while the roof was demised to the lessee requiring them to keep it in repair under paragraph 3 of the Third Schedule, there was no corresponding lessee’s payment obligation for the roof’s repairs under the Fourth Schedule as the Lessor had no express repairing obligations concerning the roof.

  • The FTT’s interpretation that the implied covenant per paragraph 14(2) merged into the lease obligations and that the lessee was liable to contribute was incorrect because it resulted in rewriting the parties’ agreement without authorization from the county court.

Conclusion

The Upper Tribunal’s decision in Crisplane Limited v Plymouth Community Homes Limited [2024] UKUT 15 (LC), serves as a substantive analysis of the interplay between the statutory right to buy provisions and the express terms of the leases. It underscores the necessity for clarity in drafting lease terms and the reluctance of the courts to extend service charge obligations beyond what was expressly agreed, particularly in the context of statutory right to buy leases. The Tribunal firmly established that express lease provisions take precedence unless they are invalidated by the obligatory nature of statutory covenants or by court orders authorizing deviation. Consequently, the appeal was allowed, and the First-Tier Tribunal’s decision was set aside, eliminating the lessee’s liability for the roof replacement costs.

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