First-tier Tribunal Grants Dispensation for Necessary Works

OUTCOME: Allowed

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Case Reference : MAN/00DA/LDC/2024/0071

Property : [APPELLANT], [ADDRESS] [POSTCODE]

Applicant: [redacted] : [COMPANY]

Respondent: [redacted]

Tribunal Members : [NAME] of Decision : 25 November 2024

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DECISION __________________________________

1 Compliance with the consultation requirements of s.20 of the Landlord and Tenant Act 1985 is dispensed with in relation to further additional works identified on site such as fire stopping works, and associated enabling works, uncovered as part of the recladding to 4 stairs/lift shafts added to the rear of the building.

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FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Background

2 The Background is set out in the grounds of the Application dated 14 September 2024, Pages 8 and 9, attached see Appendix A.

Grounds for the Application 3 The grounds for this Application are as set out in the Applicant’s three page Statement of Case, page nos. 29-31, attached as Appendix B.

The Law

4 Section 18 of the Act defines what is meant by “service charge”. It also defines the expression “relevant costs” as:

the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a [NAME], in connection with the matters for which the service charge is payable.

5 Section 19 of the Act limits the amount of any relevant costs which may be included in a service charge to costs which are reasonably incurred, and section 20(1) provides:

Where this section applies to any qualifying works … the relevant contributions of tenants are limited … unless the consultation requirements have been either– (a) complied with in relation to the works … or (b) dispensed with in relation to the works … by the appropriate tribunal.

6 “Qualifying works” for this purpose are works on a building or any other premises (section 20ZA(2) of the Act), and section 20 applies to qualifying works if relevant costs incurred in carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.00 (section 20(3) of the Act and regulation 6 of the Regulations).

7 Section 20ZA(1) of the Act provides:

Where an application is made to the appropriate Tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works … the Tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.

8 Reference should be made to the Regulations themselves for full details of the applicable consultation requirements. In outline, however, they require a landlord (or management company) to:

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• give written notice of its intention to carry out qualifying works, inviting [RESPONDENT] to make observations and to nominate contractors from whom an estimate for carrying out the works should be sought.

• obtain estimates for carrying out the works, and supply [RESPONDENT] with a statement setting out, as regards at least two of those estimates, the amount specified as the estimated cost of the proposed works, together with a summary of any initial observations made by [RESPONDENT].

• make all the estimates available for inspection; invite [RESPONDENT] to make observations about them; and then to have regard to those observations.

• give written notice to the [RESPONDENT] within 21 days of entering into a contract for the works explaining why the contract was awarded to the preferred bidder if that is not the person who submitted the lowest estimate.

Reasons for the Decision

9 The Tribunal must decide whether it is reasonable for the works to proceed without the Applicant first complying in full with the s.20 consultation requirements. These requirements ensure that [RESPONDENT] are provided with the opportunity to know about the works, the reason for the works being undertaken, and the estimated cost of those works. Importantly, it also provides [RESPONDENT] with the opportunity to provide general observations and nominations for possible contractors. The landlord must have regard to those observations and nominations. 10 The Tribunal had regard to the principles laid down in Daejan Investments Ltd. v Benson [2013] I WLR 854 upon which its jurisdiction is to be exercised. 11 The consultation requirements are intended to ensure a degree of transparency and accountability when a landlord decides to undertake qualifying works. It is reasonable that the consultation requirements should be complied with unless there are good reasons for dispensing with all or any of them on the facts of a particular case. 12 It follows that, for the Tribunal to decide whether it was reasonable to dispense with the consultation requirements, there needs to be a good reason why the works should not be delayed. In considering this, the Tribunal must consider if any prejudice had been caused to [RESPONDENT] by not undertaking the full consultation while balancing this against the risks posed to [RESPONDENT] by not taking swift remedial action. The balance is likely to be tipped in favour of dispensation in a case in which there is an urgent need for remedial action, or where all the [RESPONDENT] consent to the grant of a dispensation. 13 In the present case there is no doubt that the works were necessary and pressing for the occupiers of the apartments. The Tribunal finds that it is reasonable for the works to proceed without the Applicant first complying in full with the s.20

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consultation requirements. The balance of prejudice favours permitting such works to proceed without further delay. 14 The Applicant served the Respondents with the application and none of the Respondents have responded to it. 15 The Tribunal would emphasise the fact that it has solely determined the question of whether or not it is reasonable to grant dispensation from the consultation requirements. This decision should not be taken as an indication that the Tribunal considers that the amount of the anticipated service charges resulting from the works is likely to be recoverable or reasonable; or, indeed, that such charges will be payable by the Respondents. The Tribunal makes no findings in that regard and, should they desire to do so, the parties retain the right to make an application to the Tribunal under s.27A of the Landlord & Tenant Act 1985 as to the recoverability of the costs incurred, as service charges.

List of Respondents

16 See Appendix C

Dispensation Order

17 The Tribunal determines that compliance with the consultation requirements of s.20 of the Landlord and Tenant Act 1985 is dispensed with in relation to the works as set out in Appendix A and B as attached to this Decision.

18 The Tribunal has had due regard to the Practice Direction from the Senior President of Tribunals: Reasons for decision dated 4 June 2024. In particular paragraph 6:

Providing adequate reasons does not usually require the First-tier Tribunal to identify all of the evidence relied upon in reaching its findings of fact, to elaborate at length its conclusions on any issue of law, or to express every step of its reasoning. The reasons provided for any decision should be proportionate, not only to the resources of the Tribunal, but to the significance and complexity of the issues that have to be decided.

Chairman 25 November 2024

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Appendix A

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Appendix B

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Appendix C