Repair –v- Replace : what is reasonable?
The recent decision of The Upper Tribunal (Lands Chamber) in De Havilland Studios Ltd. –v- Peries and another  UKUT 322 (LC) is a good illustration of the principle set out by the Court of Appeal in Waaler –v- Hounslow LBC  EWCA Civ 45 that if there is more than one reasonable course of action, the landlord is entitled to choose which one to follow.
In De Havilland Studios Ltd, the Upper Tribunal confirmed that where both replacement and repair of the defective windows in the building were reasonable options, it was not open to the First-tier Tribunal to substitute its view for that of the landlord. The landlord was entitled to choose which course of action to follow and entitled to a declaration that its decision to repair (rather than replace) the windows was reasonable.
In making its decision that repair of the windows was a reasonable option on the evidence before it, the Tribunal listed the particular factors which led to its conclusion:
- Neither expert’s report suggested a decision to repair was an unreasonable option even though both regarded replacement as the better option.
- Replacement would be significantly more expensive than repair and the landlord was entitled to take this into account as its assets were limited and comprised monies in reserve funds.
- Although there was evidence that the windows were near the end of their life, there was a suggestion that repair would extend their life by up to 15 years.
- Whilst it was true that repair would not give as good result as replacement, it was common ground that it would substantially improve the position.
This list of factors will be helpful for landlords moving forward when making decisions on whether to repair or replace.
For advice on service charges disputes and on any other leasehold dispute, please contact Rebecca Turnbull-Simpson.