This week’s legal update looks at yet another decision of the Tribunals following the fallout from the Grenfell Tower tragedy during the summer of 2017.  The focus of this particular case was, again, the significant costs of a “waking watch” that has formed part of residential building fire safety measures ever since the tragedy.

In Radcliffe Investments Limited -v- Meeson and others the landlord was appealing in the Upper Tribunal (“UT”) a decision made in the First-Tier Tribunal (“FTT”) regarding the liability of the leaseholders to pay for waking watch costs at their building amounting to a sum of £57,894.00.

The background    

Park Rise, Trafford Plaza (“the Building”) is a former office block in Manchester that was converted in 2018 to contain 96 residential flats let on long leases. Radcliffe Investments Limited (“the Landlord”) acquired the freehold of the Building in August 2018.

On 24 January 2018 before the conversion was completed, a fire risk assessment (“FRA”) was undertaken by the developer as part of their obligations under the Regulatory Reform (Fire Safety) Order 2005 (“the FSO”).

The FRA set out a number of issues and recommendations, including an assessment that the risk to life was “moderate” and that it was essential that efforts should be made to reduce risk. However, on the front page of the FRA, it was suggested that the risk assessment should be reviewed by a competent person by January 2019 or sooner in the event of any significant changes.

The evidence was that the Landlord did not complete another FRA within that time upon acquiring the freehold.

In May 2019, the Building came to the attention of the local fire service due to the fire alarm being disabled by a water leak. Upon the Building being inspected by the fire service, not only was the fire alarm not functioning, evidence was found that the compartmentation and fire separation measures were inadequate. Furthermore, there was a lack of any information relating to the material that had been used to clad the Building.

It was assumed by the fire officer that inspected the Building that the cladding was an aluminium composite material (“ACM”) and that there was a risk presented to the leaseholders and residents due to the presence of ACM.

As a result, unless fire safety measures were put in place by the Landlord, including the provision of a 24-hour waking watch, the Building would be subject to a prohibited occupation order and the leaseholders would need to leave their flats.

Accordingly, the Landlord took the steps required by the fire officer and put a waking watch in place.    

The FTT Decision

The costs of the waking watch were not insignificant and the Landlord incurred a cost of £57,984.00 between 30 May and 20 September 2019 in respect of it, and which it sought to recover from the leaseholders under the leases via a service charge.

The costs of the waking watch only became apparent to the leaseholders in February 2021 when they were asked to pay towards the costs following the completion of the 2019 service charge accounts. Mr and Mrs Meeson paid their contribution under protest and subsequently applied to the FTT under S27A of the Landlord and Tenant Act 1985 (“LTA 1985”) for a determination of whether the costs of the waking watch were payable by them.

They argued that the costs of the waking watch were solely incurred as a result of the Landlord’s failure to comply with Article 9 of the FSO, which was a criminal offence under Article 32 of the FSO. It was alleged that because the costs of the waking watch were attributable to a criminal act by the Landlord, that they could not be “service costs” under the leases or alternatively, they could not have been reasonably incurred for the purpose of S19 LTA 1985. Our recent Legal Update here helpfully sets out the legal tests to be applied when considering the reasonableness of service charges being incurred.

Mr and Mrs Meeson were joined in their application by the leaseholders of 78 other flats in the Building.

In summary, the FTT determined that the leaseholders were liable to contribute towards the costs of the waking watch but only for part of the period it was in place and that their liability to pay ended as the soon as the fire alarm was reinstated. The costs attributable to that period was only £5,859.00, a tenth of the total costs, for the first 7-days.

The issue here was not that the costs were irrecoverable under the lease; they were. Rather, the FTT determined that the balance of the costs were as a result of the Landlord failing to undertake a proper fire risk assessment and that the additional costs incurred were therefore unreasonable. 

The Landlord appealed.  

The Appeal to the UT

The basis of the Landlord’s appeal was whether the FTT applied the wrong test to determine whether the costs of the waking watch were unreasonable. 

The UT, agreeing with the reasoning of the FTT, concluded that it had been entitled to determine that the costs of the waking watch were not payable by the leaseholders for the most part. Whilst the waking watch costs formed part of the costs of making the Building safe, the costs of the necessary remedial work to put right the fire safety defects was increased by the costs of the waking watch. However, that increase was said to be avoidable.

Blame was laid at the door of the Landlord. Had the Landlord commissioned an up to date FRA in the manner that was recommended in the January 2018 FRA, the defects in the compartmentation and the inadequate fire protection for the lift that was found, the costs of the necessary works would not have increased by the cost of the waking watch.

The UT found that the FTT considered that the cost was unreasonable and that was an assessment they were open to make.

The appeal was dismissed.

Conclusion

The decision here should serve as a stark warning to those tasked with undertaking fire safety works at residential buildings. That includes all those parties responsible for the management functions under the leases - Landlords, Residents’ Management Company, Right to Management Companies and their agents.

The FSO does not dictate the frequency upon which an FRA should be conducted save that Article 9 of the FSO requires them to be kept up to date or undertaken if there has been a significant change in their environment.

Our advice is that FRAs should be undertaken frequently and certainly not less than every one to two years unless there has been a significant change to the environment in the interim, in which case, they should be carried out with all haste.

So long as FRAs are regularly undertaken and any recommendations acted upon, this will reduce the risk of the costs associated with remediating such measures being determined as irrecoverable. 

The lack of action from the Landlord in the present case proved rather costly indeed! 

For more information, please feel free to contact a member of the team on 01435 897297 or info@kdllaw.com.  

Disclaimer

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