Fire safety costs and service charges

  • In the wake of the Grenfell Tower disaster, a number of landlords have needed to take interim fire safety measures
  • One landlord sought to recover the costs via leaseholders’ service charges, but met significant opposition
  • A tribunal ruled that, under the facts of the case, the costs could be recovered by the landlord

The Grenfell Tower disaster shone a spotlight on fire safety at residential housing developments. Many landlords have since had to take special fire safety measures, which can often come at considerable cost.

A recent tribunal decision addressed the question of who should ultimately pay for such measures. The tribunal held that, in this particular case, they could be recovered via the leaseholders’ service charges.

Facts of the case

The property in question was Fresh Apartments – a 141-luxury apartment development in Salford. The building featured external cladding similar to that of Grenfell Tower’s, raising fire safety concerns.

Following liaison with Greater Manchester Fire and Rescue (GMFR), and pending further testing of the external cladding, the landlord employed a ‘waking watch’ as an interim fire safety measure.

The waking watch involved two members of staff remaining on site 24 hours a day. Their role was to support early identification and evacuation in the event of a fire.

The landlord attempted to recover the associated costs via the leaseholders’ monthly service charges. In some instances, residents’ monthly payments more than doubled.

A large number of the leaseholders refused to pay the increased charges, maintaining that it should be the responsibility of the landlord.

The landlord – E&J Estates, which owns the freehold to roughly 40,000 leasehold properties across the United Kingdom – brought a case before the First-Tier Tribunal (Property Chamber) to enforce the increased service charges.

Tribunal’s decision

The tribunal found in favour of the landlord, holding that the waking watch costs could be recovered via the leaseholders’ service charges.

The tribunal ruled that it was both reasonable for the freeholder to incur the costs in question and that they were not excessive.

On examining the lease, various sections were identified as relating to service charges. In particular, it made reference to the costs of “complying with the requirements and directions of any competent authority and with the provisions of all statutes regulation orders and by-laws made thereunder relating to the Building.”

The provision of the waking watch was considered to come within the wording of the lease and was therefore recoverable via the leaseholders’ service charges.

Future implications

This is the first known First-Tier Tribunal ruling on the recovery of ‘waking watch’ costs following the Grenfell Tower disaster. With a number of other landlords having taken similar actions, this case is likely to have wide-reaching implications.

As this case shows, however, whether or not fire safety costs are recoverable will ultimately depend on the circumstances surrounding the costs and the wording of the lease.