ARMA welcomes the decision of the Court of Appeal to allow the appeal in the controversial case of Phillips & Goddard v Francis & Francis. Today’s judgement overturns the 2012 decision, which held that the cost of qualifying works was to be aggregated over a service charge year, with consultation to be carried out if the aggregated contribution exceeded £250 for any one leaseholder during that year.
In allowing the appeal, the Court of Appeal has reinstated the previous widely accepted regime in which a “sets approach” is taken i.e. section 20 consultation should be applied by reference to individual sets of qualifying works. Therefore, if a works project will cost any one leaseholder over £250 consultation must be carried out, but this financial threshold is once-again without reference to time periods or service charge years.
The Court of Appeal also gives guidance on what factors are to be taken into consideration in identifying a single set of qualifying works.