Refurbishment of Common Parts

The landlord proposed refurbishment of the common parts at a total cost of £2.3m. We quantified what the costs would have been for a reasonable refurbishment and agreed a saving of £430k for our clients.

Description

Property Solutions represented clients occupying 65% of a 147 000 sq ft multi-tenanted landmark office development, based in Birmingham.

Issues

The landlord was building an extension to the building but proposed a refurbishment of the reception, toilets and lift lobbies. This involved stripping out all existing fixtures and finishes and replacement with new improved facilities at a total cost of £2.3m (£1.6m of which was on new toilet facilities).

Process

Property Solutions’ expert surveyors carried out an in-depth condition survey of the building. This involved quantifying what the costs would have been for a reasonable refurbishment undertaken on a like-for-like basis. The difference formed the basis of the claim.

The landlord rejected Property Solutions’ contentions and refused to enter into negotiations. The landlord had started the refurbishment work. Property Solutions co-ordinated the tenant group and instructed lawyers on their behalf together with an expert opinion. Court proceedings were initiated in order to seek a declaration of the service charge and a four day hearing was scheduled at the Royal Courts of Justice.

Results

A settlement was agreed two days into the hearing. The landlord agreed to refund the difference between the respective positions but would carry on with the work as planned. A saving of circa £430k was achieved for the clients.