A “landmark” court ruling has “laid to rest years of uncertainty” by confirming it is legal for public sector landlords to use framework agreements to appoint contractors.
A decision by the Upper Tribunal means landlords can both comply with consultation requirements and recover costs from leaseholders if they appoint contractors from a framework.
According to Cornerstone Barristers the tribunal “has laid to rest years of uncertainty for public sector landlords as to whether compliance with statutory consultation requirements is possible in the case of framework agreements”.
The law firm, which acted on behalf of The Royal Borough of Kensington and Chelsea (RBKC) in the case, added if the decision had gone against the authority “it would have put in jeopardy the recoverability of millions of pounds of service charges from leaseholders".
“This is a very welcome decision not just for the RBKC but for all public sector landlords. Framework agreements can offer significant advantages for landlords, tenants and leaseholders, so this judgement brings some useful clarity to a highly complex area of law,” said councillor Rock Feilding-Mellen, deputy leader of RBKC and cabinet member for housing and property.
In the case RBKC wanted to enter into four framework agreements with companies to provide £90 million to £130 million of repairs and maintenance to the authority’s housing. The council wanted the court to determine the frameworks were ‘qualified long term agreements’ (QLTA) - which would reduce the level of consultation – which was disputed by the lessees.
A 2007 case, London Area Procurement Network v All Right to Buy, by the Leasehold Valuation Tribunal had ruled they were not QLTA because costs would be incurred under the call-off contracts rather than the frameworks themselves.
But the Upper Tribunal said it considered “that this is a very different case” and the frameworks in question were QLTAs.