The Upper Tribunal (Lands Chamber) allowed a landlord's appeal and held that two leaseholders must contribute through their service charge to temporary accommodation and storage costs incurred during damp proofing work.
Key facts
- Who: Leaseholders and landlords in disputes over service charge costs of rehousing occupants while repairs are carried out.
- From: 10 August 2026 (judgment date)
- Source: Southern Land Securities Ltd v Gisele Catherine Rettie & Anor [2026] UKUT 308 (LC)
Background
The case concerned 75 Gunterstone Road, London W14, a Victorian villa converted into eight self-contained flats. Two basement flats had damp penetrating the walls. The landlord, Southern Land Securities Ltd, carried out remedial work costing approximately £85,000. It involved hacking plaster off the walls, injecting a chemical damp proof course, applying waterproof render and repairing exterior pointing.
The occupants of the basement flats moved out while the work was done. The landlord paid for their temporary accommodation and for removing and storing their belongings. Ms Rettie put those costs at £16,397 for both flats, though the precise amount had not yet been demanded.
On 21 July 2025 the First-tier Tribunal (Property Chamber) found that Ms Rettie and Mr Li, leaseholders of two other flats, did not have to contribute to those costs. It gave two reasons why the costs were not recoverable in principle: it rejected the argument that they formed part of the cost of the works themselves, and it read the lease's repair and maintenance wording as covering only the works. It added that, even if recoverable, the costs had not been reasonably incurred, because it had not been shown to be strictly necessary for the occupants to leave, and because the basement leaseholders had covenanted to allow access on three days' notice.
The question
Could the landlord recover, through the service charge, the cost of alternative accommodation and storage for occupants who moved out so repairs could be done? And were those costs reasonably incurred?
The decision
Martin Rodger KC, Deputy Chamber President, allowed the appeal on 10 August 2026 and set aside the First-tier Tribunal's decision. He substituted a determination that the respondents must contribute to the accommodation and storage costs. The First-tier Tribunal had not been asked to quantify the liability, so there appeared to be nothing further to be decided in the proceedings.
The reasoning
The Upper Tribunal relied on the Court of Appeal decision in McGreal v Wake [1984] 13 HLR 107. Under that case, a tenant can only be obliged to vacate if that is necessary for the repairs to be carried out. If it is necessary, the tenant must go at their own expense. If the work can be done with the tenant in place, the landlord cannot insist they leave and must obtain their agreement, which may involve paying their expenses. The Tribunal said it made no difference that, here, the duty to allow entry was express in the lease rather than implied.
The Tribunal read the First-tier Tribunal as having concluded that the work could have been done with the occupants remaining, as originally specified. The occupants were therefore not obliged to move out at their own expense. The landlord had a choice: do the work around them, presumably more slowly and at greater cost, or pay them to move. It chose the second.
The Tribunal said the First-tier Tribunal was wrong to treat necessity as the test for whether costs were reasonably incurred, because expenditure may be reasonable even if not necessary. It found it impossible to say the landlord's choices were unreasonable.
It also disagreed that the lease covered only the works themselves. Costs such as professional supervision, waste disposal or scaffolding permits are ancillary to repairs, and the Tribunal considered removal, storage and temporary rehousing to fall into the same category. They therefore fell within the lease's service charge provision. The lease also allowed the landlord to pass on discretionary expenditure incurred for the general benefit of the building and its tenants.
The Tribunal considered the First-tier Tribunal's point that the landlord would have had a defence to a disrepair claim if the occupants had refused to move to be an irrelevant consideration.
What this means for leaseholders and landlords
- A tenant can be required to vacate at their own expense only where leaving is necessary for the work to be done. Otherwise the landlord needs their agreement, which may involve paying their expenses.
- Where a landlord chooses to pay occupants to move out, the Tribunal held that expenditure can be reasonably incurred even if moving out was not strictly necessary.
- The Tribunal treated ancillary costs of major repairs, such as removal, storage and rehousing, as part of performing the repairing obligation, not only the building work itself.
Any party has a right of appeal to the Court of Appeal on a point of law, with permission.
Sources
- Southern Land Securities Ltd v Gisele Catherine Rettie & Anor [2026] UKUT 308 (LC), Upper Tribunal (Lands Chamber), 10 August 2026: https://caselaw.nationalarchives.gov.uk/ukut/lc/2026/308