Brittany Pearce considers conditions precedent, and the contractual and equitable arguments that a landlord might raise in respect of a section 27A challenge when works have not been carried out due to a tenant’s failure to pay their service charge contribution.
Brittany recently appeared in front of the LVT on behalf of a landlord who was embroiled in a service charge challenge. The applicant tenant owned one of eight flats, all of which were let on long leases. The building of which they formed part had long required works which had not been carried out. As a result of the delay the anticipated costs now greatly exceeded the initial quotes. The landlord’s position was that the works had not been done because he had not received sufficient payments from the tenants. Among other points, the tenant argued that he should be entitled to set-off any liability greater than his share of the initial quote. He submitted that the repair covenant in the lease was not a condition precedent, and therefore the landlord was obliged to get on and do the works, regardless of the tenant’s failure to pay. This particular argument was met on two fronts: firstly, that the relevant provision was a condition precedent, and secondly, that in any event set-off is an equitable remedy and the tenant was not entitled to claim its benefit where he did not make the application with ‘clean hands’. The tenant’s application was successfully rebutted, with wholesale success for the landlord.