Cabinet Member Report
Date: 26th October 2009
Subject: Admiral House – Major works (G112) write-off
This is a report of the Director of Housing recommending the write-off of
service charges relating to window repairs carried out to Admiral House,
Willow Place, London SW1.
2.1 That the Cabinet Member for Housing approve the write-off totalling
£118,152 for the reasons set out in paragraphs 4.7 - 4.13 of the report.
Cabinet Member Report
City of Westminster
Cabinet Member: Councillor Roe, Cabinet Member for Housing
Date: 26th October 2009
Classification: General release
Title of Report: Admiral House – Major works (Contract G112) write-
Report of: The Director of Housing
Housing Service Aim 1 – To deliver and maintain Decent
Homes, improve energy efficiency and invest in „beyond
This recommendation results in a write-off totalling
Financial summary: £118,152 in respect of irrecoverable service charges
David McCallion – Principal Officer, CityWest
Report Author: Homes
Contact Details: CityWest Homes, 21 Grosvenor Place SW1X 7EA
Telephone: 0207 245 2232
3. Background information
3.1 Admiral House is a 5 storey purpose built block of flats built c1928.
There are 44 flats of which 27 have been sold on long lease.
3.2 The block was identified in the Council‟s capital programme for window
replacement based on the Saville‟s stock condition survey. The need
for renewal was subsequently validated in October 2006 in a feasibility
report carried out by the Gateway Partnership. It was intended that the
wooden sash windows would be replaced with PVCu units.
3.3 The works were procured under the Council‟s Strategic Alliancing
Agreement with Linbrooks as the main contractor. A PPC2000
(partnering) agreement was entered into on 31st March 2006 in respect
of Pimlico Internal and External Repairs (Contract G112) and included
works to 16 buildings to be commenced via sectional commencement
agreements to be executed as Deeds by 31st October 2006.
3.4 All works were to be completed by 31 March 2007. The original
project timetable scheduled the works to commence on Admiral House
week commencing 12 June 2006 and complete in week commencing
17 July 2006. The following timetable sets out the actual progress of
Section 20 issued 3rd March 2006
AMP approval – publication date 26th March 2006
Period for section 20 observations (30 2nd April 2006
Partnering agreement and sectional 31st March 2006
commencement agreement signed
Site possession 12 June 2006
Planning application submitted 21st July 2006
Scaffolding erected From 21st August 2006
Outline repairs / redecoration 31st August 2006
specification obtained from K&M
Planning application advertised 13th October 2006
Planning application withdrawn 14th November 2006
Newsletter to residents advising 15 November 2006
windows to be repaired not renewed
Works completed – Practical 28th March 2007
completion certificate issued
3.5 A section 20 notice was sent to the lessees of Admiral House on the 3 rd
March 2006. The works were described in the notice as replacement
windows. The estimated block cost was £485,892 inclusive of fees and
on-cost. This equated to lessee liabilities as follows:
Flat size Estimated liability
1 bed (lease share 1.25%) £6,074
2 bed (2.5%) £12,147
3 bed (3.75%) £18,221
3.6 In addition to the window replacement works, the contract included
internal works to the tenanted flats including new kitchens and
bathrooms (non-chargeable to leaseholders). The contractor took
possession of the site on the 12 June 2006 and the scaffolding was
erected from 21st August 2006.
3.7 The formal Planning application was lodged on 21st July 2006 and
withdrawn on 14th November 2006. In a residents‟ newsletter dated
15th November 2006 it was reported that Planning could not
recommend approval due to the Council no longer considering PVCu as
an environmentally sustainable material. The residents were advised in
the newsletter that CityWest Homes had therefore decided to carry out a
package of repair and redecoration only in the light of the Planning
decision. It should be noted here that Lessee Services were not
advised of this decision and therefore did not advise on whether the
scheme should be consulted upon afresh. Lessee Services being
unaware of the decision to repair and not renew consequently and
erroneously issued estimated bills on the basis of window renewal.
3.8 Linbrooks were instructed to obtain a quote for the window repairs.
K&M McLoughlin Decorating Ltd set out a schedule of un-priced works
including thoroughly preparing to prime bare wood and applying two
undercoats and one coat gloss finish. It is understood that the pricing
would be subject to ongoing surveys and measurement of the work
actually carried out.
3.9 The works were completed at the end of March 2007. The actual cost of
the works is £181,773 and includes the following works:
Re-fix / renew roof tiles as
required. Re-point and re-bed
ridge tiles. Leadwork repairs
to dormer roofs. New
waterproof bitumen paint to
Windowcare repairs £92,997.52
Rendering repairs to garden
wall. Remedial works to bin
store doors and renew
Clean gutters, hopper heads
and rainwater pipes
External redecoration £39,210.69
Sub total £157,474.67
Professional fees (15.43%) £24,298.34
3.10 A number of complaints were received about the quality of the works
following completion. A customer satisfaction survey in June 2007
revealed that residents were mainly dissatisfied with the quality of the
work. A preliminary inspection carried out in January 2009 concluded
that the works had not been carried out to a reasonable standard. The
Project Manager liaised with the contractor and residents to agree a
schedule of remedial works and these were completed in July 2009. It
is acknowledged that the contractor, Linbrooks, had expressed concern
at the time the instruction to repair/redecorate the windows was issued
that the paintwork would fail due to the condition of the windows. The
remedial works were carried out by Linbrooks at no cost as a goodwill
3.11 The finished work is considered “not ideal” but the best that can be
achieved given the age and condition of the windows.
4. Proposed write-off
4.1 The management of the works to Admiral House has put at risk the
ability of the City Council to fully recover the service charges from
lessees. The reasons for this assessment are as follows:
Section 20 compliance
4.2 Section 20 provides that the consultation notice (pursuant to Schedule
3 of the Regulations) will describe the proposed works, give reasons
for considering it necessary to carry out the works, state the total
amount of the estimated expenditure to be incurred and invite
observations from the leaseholders in relation to the works and the
estimated cost. Where a landlord fails to comply fully with the
requirements of section 20, rechargeable costs are limited to a
statutory threshold of £250 per leaseholder.
4.3 The notice described the works in relation to window renewal only.
There was no reference to the other works that were carried out such
as roof repairs, cleaning rainwater goods or rendering the garden wall.
The cost of these additional works results in lessee liabilities of £1,094
£729 and £365 depending on the size of the flat and recovers £29,165.
Due to the failure to inform or consult lessees about these works, the
costs are considered irrecoverable (In Martin (& Seale) v Maryland
Estates Ltd  26 EG 151, the Court of Appeal rejected the
landlord‟s claim to recharge the s.20 threshold in respect of additional
works that the leaseholders were not consulted about).
4.4 CityWest Homes‟ decision to repair rather than renew the windows was
conveyed in a newsletter. No cost information was provided and the
leaseholders were not invited or given the opportunity to make any
observations about the proposal to carry out only repairs and
redecoration. The newsletter was hand delivered to the flats and
therefore non-resident leaseholders did not receive any information
about the decision not to renew the windows. The newsletter stated
“For Lessees concerned about their bill, this will reduce the costs
previously presented on your section 20 estimate”.
4.5 Accordingly, the leaseholders were not consulted on the works that
were actually carried out and were not given an opportunity to
comment on the scope or estimated cost of carrying window repairs
and redecoration. Although there is no express provision under section
20 that at least two estimates must be obtained in relation to sub-
contracted works, it may be difficult for a landlord to evidence that the
cost of the repair and redecoration work is a reasonable amount absent
any comparator or market testing via a competitive tendering process.
4.6 It is considered more likely than not that if the costs were challenged
that a Leasehold Valuation Tribunal would find that section 20 had not
been complied with and that there was significant prejudice to the
leaseholders. Accordingly, absent the Tribunal granting dispensation,
which is considered unlikely, leaseholder charges would be limited to
£250. This would result in irrecoverable service charges totalling
4.7 However, consideration needs to be given to whether any of the costs
are recoverable under the test of reasonableness.
Test of reasonableness
4.8 Under Section 19 of the Landlord & Tenant Act 1985, service charges
are limited to amounts reasonably incurred on works and services
carried out to a reasonable standard.
4.9 If a LVT found the Council to be s.20 compliant or, to the extent that it
was not, the Tribunal granted dispensation on the grounds that it was
considered reasonable to do so in the circumstances, a Tribunal may
find that the costs had not been reasonably incurred. The test of
whether expenditure has been reasonably incurred involves
considering two distinct matters. Firstly, whether the landlord‟s actions
were appropriate and, if they were, whether the amount to be charged
is reasonable (Forcelux Ltd v Sweetman, Lands Tribunal ).
4.10 The Stock Condition Survey undertaken by Saville‟s in 2006 identified
the condition of the windows as expected to fail within 3 years. The
subsequent feasibility report prepared by the Gateway Partnership in
October 2006 concluded that the existing windows were in a poor
condition and that numerous frames were so badly rotten that there
ability to hold the glazing in position was compromised. Accordingly
Gateway recommended that the most economical solution was to
undertake complete renewal of the windows.
4.11 The decision to repair and re-decorate the windows appears to have
been made under the pressure of time constraints in that the contractor
was on site and the scaffolding erected. The Project Manager‟s e-mail
of 14 November to the Planning department advising that CWH wished
to withdraw the Planning application stated that “it is clear that [the
Project team] do not have the lead in time and I have instructed them
to carry out a full window repair system in place of the window
renewals, as such the application cannot just be held in abeyance but
4.12 It is settled law that where there is more than one method of repair
which a reasonable surveyor would support, it is for the landlord to
choose which method of repair to adopt. However, the landlord‟s
choice must be one that is reasonable in all the circumstances
including taking account of factors such the terms of the lease, the
state of the building at the date of the lease, the nature, extent and cost
of the proposed remedial works, the likelihood of recurrence of
disrepair if one remedy is adopted over another, the comparative costs
of alternative remedial works and the impact on the use and enjoyment
of the building by the occupants.
4.13 Taking account of these principles and applying them to the decision to
repair/redecorate the windows to Admiral House, it is considered that
the decision was not one a reasonable person would take. An
independent survey and report recommended renewal as the most
economical method of repair, the decision not to renew was driven by
time constraints rather than technical merit and the resultant finish is
acknowledged to be “not ideal”. Accordingly, if any recharge to
lessees was challenged, a Leasehold Valuation Tribunal may
determine that the service charges are irrecoverable by virtue of the
costs being unreasonably incurred.
4.14 The difference between writing-off the total cost and charging the s.20
threshold of £250 per lessee is £6,750. Given the potential for an
adverse ruling on whether any of the costs were reasonably incurred
weighed against the amount involved, the recommendation is to write-
off the entirety of the lessee recharges. If the recommendation is
accepted it would help to restore leaseholder confidence that the
landlord is prepared to listen and respond where mistakes have been
4.15 CityWest Homes remains committed to renewing the windows but such
works are not included in the current capital programme 2009 - 2014.
5. Financial Implications
5.1 The total cost of the works, including fees, is £181,773. The 27
lessees collectively are liable to pay £118,152. The balance of
£63,621 relates to the proportion of the cost of these works in respect
of the 17 tenanted units, which is borne by the HRA. Accordingly,
£118,152 will fall as a direct write-off to the HRA being irrecoverable
expenditure if none of the costs are recharged as recommended in
paragraph 4.13 above.
6. Legal Implications
6.1 By virtue of Section 151 of the Local Government Act 1972 the City
Council is obliged to make arrangements for the proper administration
of its financial affairs. In accordance with this obligation the City
Council operates pursuant to its "Financial Regulations." By virtue of
paragraph E.5 of the regulations chief officers may write off sums over
(i) they believe that the sums are not reasonably recoverable;
(ii) they have consulted with the Director of Finance and the
Director (now Head) of Legal Services; and
(iii) the relevant cabinet member approves.
6.2 As to (i) independent legal advice has been received confirming that
the sums set out in this report are not reasonably recoverable. The
Director of Housing has consulted with the Director of Finance and the
Head of Legal Services pursuant to paragraph (ii) above and the
proposal set out in this report is agreed. By agreeing to the
recommendation in this report the Cabinet Member for Housing will
signify her approval in accordance with paragraph 3 above.
7. Staffing Implications
7.1 There are none.
8. Performance Plan Implications
8.1 Recommendations of this report support the Housing Service Aim 1 – To
deliver and maintain Decent Homes, improve energy efficiency and
invest in „beyond Decent Homes‟.
9. Ward Member Consultation
9.1 Councillor Sandys has taken up with CityWest Homes the concerns
raised by residents of Admiral House.
10. Crime and Disorder Act
10.1 There are no Crime and Disorder Act issues arising from this report.
11. Health and Safety Issues
11.1 There are none.
12. Human Rights Act 1998
12.1 There are no Human Rights Act issues arising directly from this report.
13. Reason for Decision
13.1 The works as described in the consultation notice were not carried out
and are considered irrecoverable by virtue of the statutory limitation
imposed by the Landlord & Tenant Act 1985.
IF YOU HAVE ANY QUERIES ABOUT THIS REPORT OR WISH TO
INSPECT ANY OF THE BACKGROUND PAPERS, PLEASE
CONTACT David McCallion, Lessee Services Group, CityWest Homes
Ltd., 21 Grosvenor Place, London SW1X 7EA ; E-mail
email@example.com; tel: 020 7245 2232; fax 020 7245 2100
For Completion by the Cabinet Member for Housing
Declaration of Interest
I have no interest to declare in respect of this report.
Signed…………………..……………………. Date ……………………….….
Councillor Phillipa Roe
I have to declare an interest.
State nature of interest ……..……………………………………..……….………
Signed…………………………………………. Date ………………………….….
Councillor Phillipa Roe
(N.B: If you have an interest you should seek advice as to whether it is
appropriate to make a decision in relation to this matter).
For the reasons set out above, I agree the recommendation(s) in the report
entitled Admiral House – Major works (G112) write off and reject any
alternative options which are referred to but not recommended.
Cabinet Member for Housing.
If you have any additional comment which you would want actioned in
connection with your decision you should discuss this with the report author
and then set out your comment below before the report and this pro-forma is
returned to the Secretariat for processing.
NOTE: If you do not wish to approve the recommendations, or wish to make
an alternative decision, it is important that you consult the report author, the
Head of Legal Services, the Director of Finance and, if there are staffing
implications, the Director of Human Resources (or their representatives) so
that (1) you can be made aware of any further relevant considerations that
you should take into account before making the decision and (2) your reasons
for the decision can be properly identified and recorded, as required by law.
Note to Cabinet Member: Your decision will now be published and
copied to the Members of the relevant Policy & Scrutiny Committee. If
the decision falls within the criteria for call-in, it will not be implemented
until five working days have elapsed for any call-in request to be