This week’s Legal Update comes in response to a number of queries we have received from managing agents seeking guidance on the requirement to ensure that relevant building safety information forms part of a service charge demand for higher risk buildings.Whilst we shall address the topic here, for the avoidance of doubt, the new Sections 47A and 49A of the Landlord and Tenant Act 1987 (“LTA 1987”) which are being introduced via Section 113 of the Building Safety Act (“the BSA”), are not yet in force.

Given the “drip feeding” nature of the BSA, we do not yet know when Sections 47A and 49A LTA 1987 will become enacted but it is possibly going to be in the next few months rather than years. Once we have that information, a further update will follow.

In the meantime though, we would strongly encourage landlords, RTM Companies, RMC and managing agents to begin to address their systems and templates so that once Sections 47A and 4A LTA 1987 become law, that they are ready!

So, let’s take a look at what we are expecting to see change.

Section 47 and 48 LTA 1987   

Most managing agents will be very familiar with Sections 47 and 48 LTA 1987. Our past Legal Updates here, here and here set out the detail and some guidance but in summary, for a service charge demand to be lawfully payable, the demand must include the Landlord’s name and an address where they can be found (see Section 47) and, if different to the Landlord’s address, an address where notices may be served upon the Landlord (see Section 48).

Usually, for the purposes of s.47 LTA 1987, the relevant address will be the Landlord’s registered office and the s.48 information will that of their appointed managing agent. Whilst this all may sound rather straightforward, one would be surprised how often this information is incorrectly set out within a service charge demand.

The effect of getting the Sections 47 and 48 LTA 1987 information wrong is that, until that information is provided, the service charge demand is not payable. The great news is that the information can be corrected retrospectively so it is not fatal to the recoverability of the demand.

Section 47A LTA 1987

As a result of the BSA, where a building is a Higher Risk Building (“HRB”) (i.e. one that is at least 18 metres in height or at least 7 stories), in addition to the s.47 and 48 LTA 1987 information set out above, service charge demands must now also contain the relevant building safety information.

A failure to provide the relevant building safety information, has the same effect as the failure to provide the s.47 and 48 LTA 1987 information i.e. the demand will not be payable until that information is given - see s.47A(2) LTA 1987.

So, what is the relevant building safety information that is required to be given?

Section 49A LTA 1987

s.49A LTA 1987 sets out at sub-section (5) what the relevant building safety information is that must be contained in the demand for payment. Those are:

• (a) the fact that the premises consist of or include a dwelling in a higher-risk building;

• (b) the name of each person listed in subsection (6);

• (c) an email address and telephone number through which each person listed in subsection (6) may be contacted;

• (d) a postal address in England and Wales at which notices (including notices in proceedings) may be served by the tenant on the principal accountable person for the higher-risk building;

• (e) a postal address for the regulator;

• (f) such other information as may be prescribed in regulations made by the Secretary of State.

The name of each person listed in subsection (6) are:

• (a) the principal accountable person for the HRB;

• (b) any special measures manager for the HRB;

• (c) the regulator.

It is assumed that the details of each person listed above, should be known and readily available so that information can be provided within the demands for payment with relative ease. 

Practical issues and solutions

As we understand it, most property case management software only enables sufficient information to be automatically generated onto demands to include the s.47 and 48 LTA 1987 information. Regrettably, a lack of flexibility within case management software to allow the relevant building safety information to be inserted is not going to be reasonable excuse for failing to provide it!

The solution to this, in our opinion, would be to include the relevant building safety information by way of an addendum that forms part of the demand by way of a separate supplementary page. In doing so, it would be strongly advised, if possible, to make reference to the accompanying relevant building safety information in accordance with s.47A and S49A of the LTA 1987 within the body of the demand.

It would also be advisable to refer, within any letter accompanying the demand, to the relevant building safety information as being enclosed. That way, it may be referred to in circumstances where a leaseholder may seek to claim that they never received it. 

Conclusion

For the avoidance of doubt, the need to provide the relevant building safety information under s.47A and s.49A LTA 1987 within a service charge demand, when enacted, will only apply to HRBs which are those buildings at least 18 metres high or 7 stories.

When necessary, giving the relevant building safety information as required, appears to be more of an administrative burden than a legal headache. Until case management systems catch up, managing agents in the interim, should ensure that such information is given by way of an addendum that forms part of the service charge demand should they be unable to insert the same into the body of it.

Failure to provide the relevant building safety information at all will mean that the sums forming part of the service charge demand will not be payable by the leaseholder unless and until that information is given.

Whilst it will not be fatal to recovery, bearing in mind the ability to retrospectively provide the information, from a legal perspective, prevention is better than the cure because it is likely that any administration charges and legal costs that may  be incurred in pursuing a defective demand, will not be payable by the leaseholder.   

Watch this space for confirmation as to when Section 47A and 49A LTA 1987 go live!!

Disclaimer

This Legal Update describes the position in law as at the date of this article and care should be taken to note any subsequent amendments to the position as set out above.  The Legal Update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

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