In Southern Land Securities Limited v Gisele Catherine Rettie [2026] UKUT 308 (LC) the Upper Tribunal overturned a decision of the First Tier-Tribunal and held that leaseholders could be required to contribute through the service charge to the cost of temporary accommodation during the period when remedial works are undertaken.
The tenants of two basement flats were required to move into temporary accommodation while damp proof works were carried out by the landlord. It was not essential that they moved out but more convenient that they did so.
Their leases contained a covenant to pay as additional rent a proportion of the expenditure incurred by the landlord including in performing its obligations as to repair, maintenance and insurance contained in the lease including the expenditure incurred by the landlord:
“in providing such services facilities and amenities or in carrying out works or otherwise incurring expenditure as the landlord shall reasonably deem necessary for the general benefit of the Building and its tenants whether or not the Landlord has covenanted to incur such expenditure or provide such services facilities and amenities or carry out such works”
The total cost of the damp proof works was in the region of £85,000 and the two tenants were asked to contribute approximately £16,000 each; this sum included the cost of the temporary accommodation.
The Upper Tribunal reaffirmed the principles in the earlier case of McGreal v Wake [1984] 13 HLR 107 relating to the recoverability of accommodation costs:
- Where it is essential that a tenant move out to enable repair works to be carried out, they are under an obligation to do so at their own cost;
- Where it is not essential, the landlord has a choice as to how to perform its repairing covenant. It can either do the works with the tenant still in occupation even if this makes it more difficult or expensive to do them or it can seek the tenant’s agreement to move out; the landlord covering the cost of the alternative accommodation may be the price of that agreement.
The Upper Tribunal commented that in the latter scenario it may or may not be reasonable for the landlord to incur such costs and that the expense itself is not the only factor.
