Landmark Daejan Case: A Game-Changer for Resident-Controlled Blocks

• The Supreme Court ruling in the Daejan case has brought relief to leaseholder-controlled blocks and freeholders, ensuring that minor consultation errors no longer result in massive financial losses.

Understanding Section 20 Consultation Requirements

• Section 20 consultation applies to major works like lift repairs, not routine maintenance. Leaseholders previously had an opportunity to escape most charges if landlords failed to consult correctly.

Supreme Court Ruling: A Fairer Approach to Dispensation

• The ruling means that planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>tribunals will now focus on the actual impact on leaseholders rather than applying a rigid black-or-white approach to consultation breaches.

What This Means for Landlords and Managing Agents

• Landlords no longer face total financial losses due to procedural missteps. They can apply for dispensation, with the costs adjusted based on the actual prejudice suffered by leaseholders.

Daejan Case Summary: Major Works and Consultation Failures

• The case involved £280,000 of works at Queens Mansions, Muswell Hill. Leaseholders argued Daejan failed to consult properly, but the Supreme Court found the actual prejudice suffered was minimal, reducing costs by only £50,000.

New Precedent: Common Sense and Fairness Prevail

• The ruling shifts focus from whether consultation was followed perfectly to whether leaseholders suffered financial harm, making it harder to use consultation failures as an excuse not to pay.