A recent decision in the County Court at Manchester has shed light upon the correct approach to be taken when valuing repairs in housing disrepair claims. Landlords have seen an exponential increase in the amount of claims arising out of alleged disrepair and unfortunately there are no clear rules defining how the cost of repairs should be determined.
In the case of Jalili v Bury Council [2021], a proposed action by the claimant claiming specific performance and damages for disrepair was settled. Each party instructed a surveyor, but the surveyors disagreed with regards to the extent of work that needed to be carried out. The claimant’s surveyor believed that the sum of the work to be carried out should be £3,915, whereas the defendant’s surveyor believed this figure to be £740. The main reason for the difference in figures was that the claimant’s surveyor based their assessment on the ‘open market’ costs of hiring builders, but the defendant valued this based on the costs of the work being done inhouse by the defendant council. Ultimately, the defendant carried out the work based off of their own surveyor’s advice and the matter was resolved with the claimant accepting the defendant’s Part 36 offer of £1,000 in damages.
A dispute as to costs followed and Part 8 proceedings for costs were issued. How these proceedings were to be resolved was down to the question of how the costs of repairs should be valued: on an open market basis or with the work being done in-house.
The District Judge favoured the defendant’s approach, holding that the value of the claim should be based upon the assumption that work should be done in-house.
District Judge Haisley stated that ‘the court cannot and must not close its eyes to the fact that, in essence, the order for specific performance would have required the Defendant… to put right disrepair… Consequently, the work would not be ordered to be carried out on the open market; it would be an order requiring a local authority which, as is common knowledge, would have its own in-house team of the relevant professionals undertaking the work, so it seems to me that the Claimant’s surveyor’s basis of valuing the requisite works was flawed, or certainly was not the relevant basis of valuing the relevant works for the purposes of this issue’.
The moral of the story is…
While this County Court case is not binding legal precedent, it provides us with a useful indication as to the approach courts may take, suggesting that repairs should be valued on the assumption that work should be done in-house. However, to rely on this argument, landlords should be aware that they will be required to present a coherent and costed schedule of works, otherwise their argument may be likely to fail.
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