The dividing line between repairing a building and making good its structural defects may appear as fine as a human hair but, in a Court of Appeal case, it made a multi-million-pound difference to Right to Buy tenants of a listed tower block.
The case concerned a concrete, aluminium and glass block of 120 flats which was a good example of the type of local authority accommodation built in the 1950s. From the 1980s onwards, 125-year leases of each flat were sold off by the council to tenants at discounted prices under the Right to Buy scheme.
The block’s standard of construction was in many respects poor, resulting in water ingress and other serious issues. Over a period of more than two years, the council undertook an extensive programme of works on the building at a cost of about £8 million. It purported to pass the whole cost of those works on to tenants, resulting in potential bills of over £72,000 in respect of each flat.
The question of whether all or any part of those bills was payable depended on whether the works were viewed as repairs, for which tenants were liable, or the making good of structural defects, for which they were in the main not liable. The Upper Tribunal (UT) resolved that issue in the tenants’ favour.
Rejecting the council’s challenge to that outcome, the Court noted that a structural defect in a building need not be inherent, but it must arise from the construction or design, or possibly modification, of that building. That was to be contrasted with damage or deterioration that has taken place over time, or as a result of some supervening event, and which gives rise to a need for repair.
The Court noted that many tenants who purchased long leases under the Right to Buy scheme are of modest means. It was by no means surprising that Parliament had chosen to give them a measure of consumer protection by insulating them from liability to pay towards the cost of rectifying structural defects. A tenant who wished to buy a single flat in a large block could not be expected to commission a full structural survey of the entire building before doing so.
Under the terms of their leases, the tenants could be required to contribute towards the cost of making good structural defects of which the council had made them aware before they purchased their leases. They would also be liable for the cost of making good structural defects of which the council only became aware 10 years or more after the grant of a lease. Those provisions, the Court found, struck a fair balance between the interests of the council, as landlord, and the tenants.