New FTT Decision on the Liability of Costs for a Waking Watch

The case of Radcliffe Investment Properties Ltd v Meeson [2023] UKUT 209 (LC) (22 August 2023) held that the First Tier Tribunal (‘FTT’) was correct in deciding that waking watch costs were not reasonably incurred pursuant to s19 (1) of the Landlord and Tenant Act 1985. This case serves as a warning to all building owners that Fire Risk Assessments (‘FRAs’) under review must be revisited to save costly issues occurring in the future.

A FRA was carried out in 2018 before completion of the conversion of the building from an office block to residential flats. The FRA stated the likelihood of fire as ‘medium’ and the risk of harm ‘moderate’, to be reviewed annually or when material changes occurred.

There was no evidence to show that the freeholder (who had taken over ownership in late 2018) had taken steps to review the FRA or commission a new one and in May 2019, there was a water leak causing the fire alarm control panel to malfunction. The fire officer was concerned with a number of the buildings features and recommended immediate implementation of waking watch. Simultaneously, the freeholder was served with an enforcement notice due to failure to maintain a suitable and sufficient FRA under article 9 of the Regulatory Reform (Fire Safety) Order 2005 (‘RRO 2005’).

By September 2019 some works thought to be needed were deemed to be not required and the required remedial works were complete, the waking watch was discontinued and the cost of it were charged to the leaseholders via their service charge. The leaseholders applied for a determination under section 27A of the LTA 1985 that the costs were not payable as they were incurred due to the landlord’s failure to comply with the RRO 2005. The FTT concluded that the costs of providing a waking watch were capable of being a service cost but not in this case, as they were attributable to the landlord's failure to carry out a FRA. The landlord appealed the determination on the grounds that in assessing reasonableness of service charge costs, the FTT had been wrong to ask why the costs had been incurred.

The Upper Tribunal (Lands Chamber) (‘UT’) held that whether an amount is reasonable must be assessed in the light of the specific facts of the case (Avon Ground Rents Ltd v Cowley [2019] EWCA Civ 1827). The appeal was dismissed by the UT and they concluded that if the freeholder had complied with its duty under the RRO 2005, they would have identified the extent of the issues earlier and so the waking watch would have been avoidable.

The UT confirmed that the FTT was entitled to determine that those waking watch costs were unreasonable because of the landlord’s lack of action and so should not be charged back to the leaseholders.

The facts of this case differ from previous cases deliberating who is liable for the cost of a waking watch where a landlord had acted rationally and costs were reasonably incurred when, on identification of risk, it had implemented a waking watch.