Service Standards Must Be Appropriate for Properties

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Owning a share of the freehold is often cited as a selling point to flat buyers – but tenant democracy is no panacea and there is little advantage to it if residents do not get on. In one case, a dispute between wealthy apartment dwellers over cuts to their concierge service ran up over £300,000 in legal costs before being resolved in court.

The case concerned a development of 15 apartments that were valued at between £15 million and £34 million. Residents, some of them billionaires, held shares in a company that owned and managed the development. Following a straw poll of tenants by email, the company reduced the concierge service so that only one member of staff was on duty at night and for much of the weekend.

Feelings ran high as three tenants objected to the cuts and launched legal proceedings. They claimed that, amongst other things, undermanning had jeopardised security and resulted in residents and their guests having to wait up to half an hour before being let into the development. It was also claimed that couriers were not always able to deliver parcels promptly and delays in collecting rubbish had attracted vermin.

Upholding their arguments, a judge found that the company was obliged to provide a concierge service appropriate to the highest quality residential accommodation. The tenants’ leases only allowed staffing levels to be reduced by a unanimous vote and the majority was not entitled to dictate to the minority. The court issued an injunction requiring that two concierges be in attendance at all times and ordered the company to pay the action’s six-figure legal costs.

Source: Private Client Library Content