First-tier Tribunal Allows Landlord to Skip Consultation for Repairs

OUTCOME: Allowed

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Case Reference

: CAM/22UH/LDC/2025/0637

HMCTS

: Paper

Property

: [ADDRESS] [POSTCODE]

Applicant

: [redacted] (Managing Agent) : [COMPANY]

Respondents : [redacted]

Type of [NAME] : To dispense with the consultation

requirements referred to in Section 20 of the

Landlord and Tenant Act 1985 pursuant to

Section 20ZA

Tribunal

: Judge JR Morris

Date of [NAME] : 20 May 2025 Date of Directions : 13 June 2025 Date of Decision : 31 July 2025

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2025

Decision

1. The Tribunal is satisfied that it is reasonable to dispense with compliance with all the consultation requirements of Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) that the Applicant has not carried out.

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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2. The Applicant or its Representative shall serve a copy of the Tribunal’s decision on dispensation, together with the relevant appeal rights attached, to the [NAME].

Reasons

The [NAME]

3. On 25 April 2025 the Applicant applied for dispensation from the statutory consultation requirements in respect of qualifying works which are to redecorate water-stained ceilings and walls and lay new carpet due to water damage to the previous carpet in [NAME] 101 resulting from water ingress from a roof leak at the Property.

4. The Property is a development of 4 purpose built residential flats over commercial premises. The building is of brick under a [NAME] roof.

5. Directions were issued on 13 June 2025 which stated that the [NAME] would be determined on or after 25 July 2025 based on written representations and without an inspection, unless either party made a request by 4 July 2025 for an oral hearing. No request was received.

6. The Tribunal initially queried the works with the Applicant to say that although the Tribunal cannot advise, under normal lease provisions, such costs would not be recoverable through the service charge and the Applicant may wish to take their own independent legal advice. The Applicant confirmed they wished to proceed with the dispensation [NAME], so directions were given as requested, but these proceedings will not decide whether any service charge is payable for the relevant works and the parties may wish to take independent legal advice on whether any service charge for the relevant works would be payable under the terms of the Lease.

7. The Directions required the Applicant’s Representative to send by 23 June 2025 to each of the [NAME], by hand delivery or by first class post and by email, if practicable, copies of: i. The [NAME] form without the list of [NAME]’ names and addresses; ii. The Directions; iii. A clear concise description of the relevant works for which dispensation is sought; iv. an estimate of the cost of the relevant works, including any professional fees and VAT; v. Any other evidence relied upon; and To file with the Tribunal confirming that this had been done and stating the date on which this was done.

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8. On 23 June 2025 the Applicant confirmed that this Direction had been carried out.

9. If the [NAME] wished to oppose the [NAME] the Directions required them to do so via an attached reply form by 4 July 2025. On 3 July 2025 [NAME] [NAME] [NAME] and [NAME] [NAME] [NAME], [NAME], objected to the dispensation and provided a statement of case which is set out below. No other objections or representations were received from the [NAME].

The Law

10. Section 20 of the Landlord and Tenant Act 1985 limits the relevant service charge contribution of tenants unless the prescribed consultation requirements have been complied with or dispensed with under section 20ZA. The requirements are set out in The Service Charges (Consultation Requirements) (England) Regulations 2003. Section 20 applies to qualifying works if the relevant costs incurred in carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.

11. The consultation provisions appropriate to the present case are set out in Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) (the 2003 Regulations). The Procedure of the Regulations are summarised in Annex 2 of this Decision and Reasons.

12. Section 20ZA allows a Landlord to seek dispensation from these requirements, as set out in Annex 2 of this Decision and Reasons and this is an [NAME] for such dispensation.

13. The terms “tenants” “lessees” and “[NAME]” are synonymous as are “landlord” and “lessor.”

Submissions & Evidence

Applicant’s Case

14. The Applicant provided a bundle to the Tribunal which included: • A copy of the Lease, the covenants of which are understood to be common to all the Leases, • [NAME] to the Tribunal, • Tribunal Directions and the Applicant’s confirmation regarding compliance with Directions, • Quotations. These together set out the Applicant’s case.

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Lease

15. The Lease provided was between the original Landlord and the original [NAME] (assignments of both Lease and reversion having since taken place) for a term of 125 years from 1 January 2006. The relevant covenants of the Lease are as follows:

a) Clause 1 “Service Charge” means the reasonable expenditure properly incurred by the Landlord in providing the services for the tenants of the Flats hereinafter set out and as more particularly defined or referred to in the Fourth Schedule

b) Clause 7 The Landlord covenants 7.4 To observe and perform the covenants set out in the Fourth Schedule

c) Clause 9 9.1 The expression Service Charge shall include all reasonable expenses properly incurred by the Landlord of and incidental to: 9.1.1 Observing and performing the provisions of the Fourth Schedule

d) Clause 13.2 The Tenant covenants with the Landlord and as separate covenants severally with the tenants of the other Flats on the Estate to pay on demand…the following amounts: On the Service Charge Payments dates such sum as is demanded on account of the Service Charge

e) The Second Schedule The Main Structures The exterior walls foundations roofs …and the internal load bearing walls of all Flats and the floor joists beams and girders but excluding therefrom those parts of the interior Buildings which consist of separate Flats

f) The Third Schedule Part 1 The [NAME] shall comprise the tiling and floor coverings …plaster on the ceilings and walls

g) The Fourth Schedule Service Charge covenants by the Landlord 4.1 To keep the Main Structures properly supported

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4.2 To keep the Main Structures and the Common Parts properly repaired renewed reconstructed maintained decorated and cleansed

[NAME]

16. The Applicant stated that the qualifying works for which the dispensation [NAME] is being made is for remediation of damage to the inside of [NAME] 101 caused by water ingress from a tear in the fabric of the roof covering. The Applicant said that although the leak occurred in the Autumn of 2022, it was not identified for several months because there were problems in gaining access to [NAME] 100 to investigate where the leak was coming from. Once the source of the leak was identified the roof works were then carried out in March 2023.

17. An insurance claim for these works was rejected on the grounds of: “Damage [i.e. the tear to the roof fabric which caused the leak] to the property caused by or consisting of gradual deterioration or wear and tear."

18. The leak also affected [NAME] 101 but the Applicant was not aware of this until very late in 2022 because the letting agents of the [NAME] failed to inspect the inside regularly. Due to this lack of information an insurance claim for damage to [NAME] 101 was not made until the Summer of 2023, which was also rejected because the insurers were not notified of the leak within 30 days.

19. Therefore, all the works required are to be funded by the service charge.

20. The Applicant said that the [NAME] for Dispensation was being made because the work on [NAME] 101 had to be carried out urgently without consultation due to the conditions within the [NAME] being poor.

Tribunal Directions

21. The Directions were complied with as stated above.

Quotations

22. The Applicant provided a quotation dated 28 March 2025 for replacing the water damaged carpet from [NAME] To supply and fit: New grey carpet to living and dining area Replace water damaged underlay Replace grippers Vinyl flooring to kitchen, incorporating chrome dividing bar between kitchen and living/dining area. Price also includes: Removal of waste and door bars throughout Total Price £1,800.00

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23. The Applicant provided a quotation dated 28 March 2025 from D B Spurdens Decorators and Plasterers Works to be carried out to water damaged kitchen and dining room: Sheet over kitchen worktops and units to protect. Sheet over floor to protect. Take down coving where necessary and dispose. Take down and dispose of water damaged ceiling where necessary Supply and instal new fire safety plaster boarding. Plaster over new boarding. Overhaul sections of walls clean all mould. Paint stained sections of ceilings with damp sealant only where necessary. Paint stained sections of walls with damp sealant only where necessary. Fill and sand down and prepare ceilings and walls only where necessary. Paint ceilings with 2x coats of white emulsion paint only where necessary. Paint walls with 2x coats of white emulsion paint only where necessary. Total Price £3,600.00

24. There being 4 Flats the total cost of £5,400.00 results in the unit charge being more than £250.00. Therefore, the consultation procedure under section 20 of the Landlord and Tenant Act 1985 was required or dispensation granted for the full cost to be met by the service charge.

Respondent’s Case

25. [NAME] [RESPONDENT] [NAME] and [NAME] [RESPONDENT] [NAME], [NAME] objected to the granting of dispensation for the work to [NAME] 101. [NAME] [NAME] [NAME] provided a statement of case as follows:

1. Initial Leak Report and Insurance Obligation

26. [NAME] [NAME] said that the water leak was first reported to the Managing Agent in August 2020. According to the insurance policy governing the [NAME], this incident should have been reported to the insurer at that time. He said it is the Managing Agent’s responsibility to understand the terms of the building’s insurance policy and to ensure timely compliance with its requirements. He said as [NAME], they rely on the Managing Agent to act competently and promptly in such matters. He said he had previously asked for clarification from the Managing Agent about increased insurance costs, but these requests were ignored or went unanswered.

2. Delay in Inspection and Repairs

27. He said that despite being informed of the leak in August 2020, the Managing Agent failed to act promptly and an inspection of the roof did not take place until December 2022 which was over two years later.

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28. When access was requested for the inspection, [NAME] [NAME] said that they promptly informed the tenants occupying the [NAME] of the date, and they provided access as instructed. He said that it was not until March 2023 that they were told roof works would begin on 3rd April 2023 which was six months after the initial inspection. The Managing Agent attributed the delay to their decision to address a pigeon issue at the same time, rather than prioritising the essential roof repair work.

3. Inadequate Remedial Works

29. [NAME] [COUNSEL] said that contractors were instructed by the Managing Agent to remediate the damage in the [NAME], number 100, caused by the leak. However, the work was of such poor quality that they had it redone at their own expense.

30. [NAME] [NAME] attached to the statement email chains with the Managing Agent as evidence of the timeline of events and he and his partner’s attempts to follow up the matter.

31. A resumé of these is as follows:

The leak was reported to the Managing Agent in August 2020 and the leak had caused damage to their [NAME], [NAME] 100. A contractor was engaged to repair the roof and it was mentioned that a building insurance claim might be made. [NAME] [NAME] and [NAME] [NAME] were asked to obtain 2 quotations for redecorating the damage to their [NAME] with a view to an insurance claim being made for redecoration.

On 15 September 2020 [NAME] [NAME] and [NAME] [NAME] reported the leak had returned and was still present on 3 November 2020.

On 2 November 2022 [NAME] [NAME] and [NAME] [NAME] reported that some redecoration work had been carried out in their [NAME] by a contractor engaged by the Managing Agents but it was unsatisfactory. It appeared the leak had not stopped.

On 14 November 2022 the Managing Agent said that the roof would be repaired at the same time as the pigeon spikes. In addition, a quotation for £560.00 had been obtained by the Managing Agent for further redecoration work to [NAME] 100.

On 29 December 2022, following several emails to arrange access to [NAME] 100 to view the area from which the leak was coming, the roofing contractors attended on 29 December 2022. A quotation for the roof repair was received in March 2023 and the work was due to commence in April.

32. It was submitted that the [NAME] should be rejected due to the Managing Agent’s failure to act with reasonable care, diligence, and competence in managing the property.

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Findings

33. The Tribunal finds from the Lease that the Applicant is obliged to maintain the roof of the Property and that this cost is chargeable to the [NAME] through the Service Charge.

34. The Tribunal also found that damage caused to Flats because of the roof covering failing, which according to the insurance company, was due to fair wear and tear, would be part of the roof remediation works and chargeable to the Service Charge.

35. The Tribunal considered each of the objections raised by [NAME] [NAME] in the statement of case he provided.

1. Initial Leak Report and Insurance Obligation

36. The Tribunal found that the time between the reporting of the leak in 2022 and the eventual repair in 2023 was protracted. However, this is not a reason to refuse to grant dispensation for work related to the leak, namely redecorating and recarpeting [NAME] 101. The work was necessary.

37. The reason for the insurance company’s refusal to accept the claim for repairing the roof to remedy the leak was that the damage to the roof was due to fair wear and tear. It was not because they were not informed of the leak promptly.

38. The reason for the insurance company’s refusal to accept the claim for redecorating and recarpeting [NAME] 101 was because the damage was not reported promptly. This is not a reason for refusing dispensation from the consultation procedure.

39. However, the Tribunal found that the failure to have the work carried out under an insurance claim and the apparent failure of the [NAME] to report the damage to that [NAME] to the Managing Agent may make it unreasonable to attribute all the cost of that work to the Service Charge. Whether for these reasons it is unreasonable to attribute the cost to the Service Charge is a matter for determination in respect of an [NAME] under section 27A of the Landlord and Tenant Act 1985; not an [NAME] for dispensation.

2. Delay in Inspection and Repairs

40. As stated above, the Tribunal found that the time between the reporting of the leak in 2022 and the eventual investigation and repair in 2023 was protracted but this is not a reason to refuse to grant dispensation to the consultation procedure for work related to the leak, namely redecorating and recarpeting [NAME] 101. The work was necessary.

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41. Whether the work was made unreasonably more expensive by delays in identifying and repairing the leak or by the [NAME] failing to report the damage to that [NAME] promptly, is a matter for determination in respect of an [NAME] under section 27A of the Landlord and Tenant Act 1985 not an [NAME] for dispensation from the consultation procedure.

3. Inadequate Remedial Works

42. If the [NAME] consider the cost of the redecoration to [NAME] 100 to be unreasonable because it was not of a reasonable standard it is a matter for determination in respect of an [NAME] under section 27A of the Landlord and Tenant Act 1985 not an [NAME] for dispensation.

43. The Tribunal found that the redecorating and recarpeting of [NAME] 101 is related to the roof leak, the cost of which is chargeable to the Service Charge. The cost of this work is above the threshold of £250.00 per unit which requires the Landlord to undertake the consultation procedure under section 20 of the Landlord and Tenant Act 1985 and in respect of which the Landlord seeks dispensation.

44. The Tribunal found that the [NAME] have, in the course of the [NAME] procedure for dispensation had the opportunity to show whether they have suffered any relevant prejudice by the failure to carry out the consultation procedure. Although the Tribunal has found that [NAME] [NAME] and [NAME] [NAME] have not shown that they have suffered relevant prejudice by the failure to carry out the consultation procedure, nevertheless, they have raised some important issues regarding the reasonableness of the cost of the works to the Service Charge. If these issues cannot be resolved between the Applicant and the [NAME] then an [NAME] under section 27A of the Landlord and Tenant Act 1985 may be made for a determination of the reasonableness of the cost and standard of the works.

Determination

45. In [NAME] its decision the Tribunal had regard to the decision of the Supreme Court in [COMPANY] v [NAME] and others [2013] UKSC 14. In summary, the Supreme Court noted the following:

1) The main question for the Tribunal whether the landlord’s breach of the section 20 consultation requirements resulted in the [NAME] suffering real prejudice.

2) The financial consequence to the landlord of not granting a dispensation is not a relevant factor.

3) The nature of the landlord is not a relevant factor.

4) Dispensation should not be refused solely because the landlord seriously breached, or departed from, the consultation requirements.

5) The Tribunal has power to grant a dispensation as it thinks fit, provided that any terms are appropriate.

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6) The Tribunal has power to impose a condition that the landlord pays the tenants’ reasonable costs (including surveyor and/ or legal fees) incurred in connection with the landlord’s [NAME] under section 20ZA.

7) The legal burden of proof in relation to dispensation applications is on the landlord. The factual burden of identifying some “relevant” prejudice that they would or might have suffered is on the tenants.

8) The Supreme Court considered that “relevant” prejudice should be given a narrow definition; it means whether non—compliance with the consultation requirements has led the landlord to incur costs in an unreasonable amount or to incur them in the provision of services, or in the carrying out of works, which fell below a reasonable standard, in other words whether the non—compliance has in that sense caused prejudice to the tenant.

9) The more serious and/or deliberate the landlord’s failure, the more readily a Tribunal would be likely to accept that the tenants had suffered prejudice.

10) Once the tenants had shown a credible case for prejudice, the Tribunal should look to the landlord to rebut it.

46. The Tribunal is satisfied that it is reasonable to dispense with compliance with all the consultation requirements of Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) that the Applicant has not carried out.

47. The [NAME] should note that this is not an [NAME] to determine the reasonableness of the works or their cost. If, when the service charge demands in respect of these works are sent out, any [NAME] objects to the cost or the reasonableness of the work or the way it was undertaken, an [NAME] can be made to this Tribunal under section 27A of the Act. A landlord can also seek a determination as to the reasonableness of the cost of the work.

48. The Applicant shall serve a copy of the Tribunal’s decision on dispensation, together with the relevant appeal rights attached, to all [NAME].

Judge JR Morris

Annex 1 – Right of Appeal

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written [NAME] for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the [NAME].

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3. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed despite not being within the time limit.

4. The [NAME] for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party [NAME] the [NAME] is seeking.

Annex 2 – The Law

1. Section 20 of the Landlord and Tenant Act 1985 limits the relevant service charge contribution of tenants unless the prescribed consultation requirements have been complied with or dispensed with under section 20ZA. The requirements are set out in The Service Charges (Consultation Requirements) (England) Regulations 2003. Section 20 applies to qualifying works if the relevant costs incurred in carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.

2. The consultation provisions appropriate to the present case are set out in Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) (the 2003 Regulations). The Procedure of the Regulations and are summarised as being in 4 stages as follows:

A Notice of Intention to carry out qualifying works must be served on all the tenants. The Notice must describe the works and give an opportunity for tenants to view the schedule of works to be carried out and invite observations to be made and the nomination of contractors with a time limit for responding of no less than 30 days. (Referred to in the 2003 Regulations as the “relevant period” and defined in Regulation 2.)

Estimates must be obtained from contractors identified by the landlord (if these have not already been obtained) and any contractors nominated by the Tenants.

A Notice of the Landlord’s Proposals must be served on all tenants to whom an opportunity is given to view the estimates for the works to be carried out. At least two estimates must be set out in the Proposal and an invitation must be made to the tenants to make observations with a time limit of no less than 30 days. (Also referred to as the “relevant period” and defined in Regulation 2.) This is for tenants to check that the works to be carried out are permitted under the Lease, conform to the schedule of works, are appropriately guaranteed, are likely to be best value (not necessarily the cheapest) and so on.

A Notice of Works must be given if the contractor to be employed is not a nominated contractor or is not the lowest estimate submitted. The Landlord must

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within 21 days of entering into the contract give notice in writing to each tenant giving the reasons for awarding the contract and, where the tenants made observations, to summarise those observations and set out the Landlord’s response to them.

3. Section 20ZA allows a Landlord to seek dispensation from these requirements, as follows: –

(1) Where an [NAME] is made to a leasehold valuation tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long term agreement, the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.

(2) In section 20 and this section— "qualifying works" means works on a building or any other premises, and "qualifying long term agreement" means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months.

(3) The Secretary of State may by regulations provide that an agreement is not a qualifying long term agreement— if it is an agreement of a description prescribed by the regulations, or in any circumstances so prescribed.

(4) to (7)… not relevant to this [NAME].