Properly employed, sweeper clauses are designed to catch service charge costs that may be unforeseeable at the time of drafting. This is an essential fall back when drafting a long residential lease whose term will be somewhere between 99 and 999 years and subject to a statutory right of extension on the same lease terms.
However, sweeper clauses are not the all-encompassing saviour they may appear to be. The recent decision in Geyfords v O'Sullivan & others is a reminder that wide drafting is often narrowly construed by the courts: In that case the court held that a sweeper referring to "management" costs did not extend to the landlord's legal costs in managing the development.
It is also worth remembering that sweeper clauses in residential leases will also be subject to the tests of reasonableness contained in s.18 and 19 of the Landlord and Tenant Act 1985. Those provisions require costs under residential service charges to be both reasonably incurred and for the works or services to have been carried out or provided to a reasonable standard commensurate with the cost incurred.
The First Tier Tribunal has jurisdiction to decide in advance whether proposed expenditure is within the scope of a particular residential service charge regime. The best approach for the cautious landlord may, therefore, be to seek a ruling from the First Tier Tribunal before expending large amounts of money on services or works that are not expressly covered by the wording of the lease in question.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
