A recent Supreme Court decision is likely to be met with relief by buy-to-let owners of leasehold properties.

The court had been asked to consider whether an intermediate landlord was in breach of the statutory covenant to keep the structure and exterior of a dwelling-house in repair. The intermediate landlord had sublet his second floor flat to a tenant under an assured shorthold tenancy. The tenant tripped and injured himself on some uneven paving when taking rubbish out to the communal bins.

Under the terms of the headlease, the freeholder was responsible for keeping the communal areas in good condition, subject to being given notice of the defect. Neither the intermediate landlord nor the freeholder had received notice of any defect.

The Supreme Court held that the intermediate landlord was not in breach of the statutory obligation to repair because the paved area did not fall within the scope of the repairing obligation. However, while the decision will be of considerable comfort to buy-to-let landlords who are in a similar position to the one outlined here, it might not always be clear when a tenant must give notice of disrepair.

Buy-to-let owners of leasehold properties and other intermediate landlords will be concerned by a Court of Appeal decision on the liability for repairs to the exterior of a building. Under the terms of the headlease, the freeholder was responsible for keeping the communal areas in good condition, subject to being given notice of the defect. The court held that an implied repairing covenant applied to the intermediate landlord when the subtenant of the flat tripped on an uneven pathway despite the intermediate landlord being unaware of any defect.

Buy-to-let owners of leasehold properties and other intermediate landlords may unexpectedly find themselves liable for repairs to communal areas, even though the head landlord is responsible for their upkeep and they have no notice of any defect. As it is impossible to exclude the implied statutory covenants, there seems little that intermediate landlords can do. Although landlords should generally keep an eye on their properties, it may be impossible for them to know in time that a defect has occurred given that liability arises immediately.

A decision in the Upper Tribunal (Lands Chamber) will increase the administrative burden on landlords to show that they have considered both alternative approaches and the financial impact on tenants of improvements before proceeding. Failure to do so may provide disgruntled tenants with ammunition to challenge high service charge bills.

The tribunal held that, when considering whether service charge costs for improvements (as distinct from repairs) are reasonable, the landlord must show that it has considered the availability of an alternative and less expensive remedy, and the views and the financial means of the tenants who will be required to pay for the works.