A landlord and managing agent have been criticised by a property tribunal for the way it handled a Section 20 consultation for a £3m repairs project.
South Cliff Tower (Eastbourne) Limited – controlled by some leaseholders – and Southdown Surveyors regarded the consultation as “an exercise which would not influence their decision making”, the tribunal said.
And it stated that the managing agent and the landlord of the 19-storey South Cliff Tower appeared to think the consultation was “something to be endured”.
The tribunal was also “astonished” that the leaseholder’s directors agreed to an unfavourable works contract that limited the liability of the contractor, Faithful & Gould, to just £166,200.
It said that the “ruinously expensive” refurbishment of the 72 flats “threatened the solvency of the Respondent landlord”. And it was shocked that “many flats in the South Cliff Tower have been left with excessive water penetration, draughts, excessive wind noise and other defects”.
In summing up the case, the tribunal said: “The tribunal finds it very difficult to understand how an upper limit of contractual liability for potential error on a complex project of this kind of just £166,200 … could be regarded as suitable against a possible total cost of works which at that stage were estimated in excess of £3m.”
The tribunal also criticised the largely retired, inexperienced and non-legally qualified directors of South Cliff Tower (Eastbourne) Limited for signing off on a bad agreement.
It added: “The contractual terms upon which Faithful & Gould were appointed were notably favourable to Faithful & Gould and not to the Applicant [the landlord]. The Tribunal is satisfied that more favourable terms could have been negotiated from Faithful & Gould or if not from other construction professionals for the same or materially identical services, had compliant consultation taken place.”
The tribunal said that it was satisfied that a wider range of competitive quotes could have been obtained for each component of the services offered by Faithful & Gould.
It ordered that a couple who brought an action challenging the major works consultation be paid £12,000 to help cover legal costs. And it granted retrospective dispensation to the landlord from compliance on most of the disputed consultation points provided it paid the aggrieved leaseholders within 14 days of the hearing.
South Cliff Tower (Eastbourne) Limited was also ordered not to pass on its legal costs and to pay for the hearing.
