First-tier Tribunal Grants Dispensation for Urgent Water Pump Replacement

OUTCOME: Allowed

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Case Reference : Lon/00AG/LDC/2020/0165 Property : 30 [ADDRESS] [POSTCODE] Applicant : [redacted] : [NAME] Respondents : [redacted] don [POSTCODE]

Type of [NAME] : [NAME] for the dispensation of con- sultation requirements pursuant to S. 20ZA of the Landlord and Tenant Act 1985 Tribunal Members : [APPELLANT] of Determi- nation : [ADDRESS], LondonWC1E 7LR Date of Determina- tion and Decision : 16th December 2020

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3 Decisions of the Tribunal (1) The Tribunal grants the [NAME] for the dispensation of all or any of the consultation requirements provided for by section 20 of the Landlord and Tenant Act 1985 (Section 20ZA of the same Act). (2) The reasons for the Tribunal’s decision are set out below. The background to the [NAME]

1. The property has a commercial premises on the ground floor and five residential flats on the upper floors. It is stated in the [NAME] this was probably a former office building that has subsequently been con- verted.

2. The tribunal did not inspect the property as it considered the documen- tation and information before it in the trial bundle enabled the tribunal to proceed with this determination and also because of the restrictions and regulations arising out of the Covid-19 pandemic.

3. This has been a paper hearing which has been consented to by the par- ties. The documents that were referred to are in a bundle prepared by the applicant, plus the tribunals [NAME] the contents of which we have recorded. Therefore, the tribunal had before it an electronic/digi- tal trial bundle of documents prepared by the applicant, in accordance with previous [NAME].

4. The Applicant seeks dispensation under section 20ZA of the Landlord and Tenant Act 1985 (“the 1985 Act”) from all the consultation require- ments imposed on the landlord by section 20 of the 1985 Act, (see the Service Charges (Consultation Requirements) (England) Regulations 2003 (SI2003/1987), Schedule 4.) The request for dispensation con- cerns urgent works for the replacement of two of the three defective supply pumps which provide cold water to the flats. The [NAME] is said to be urgent, as the works are necessary to provide a cold water supply to the residents of the five properties and it is stated that one of the leaseholders has just had a baby.

5. The [NAME] is said to be urgent, as the works are necessary to pro- vide a cold water supply to the residents of the five properties, 6. Section 20ZA relates to consultation requirements and provides as fol- lows: “(1)Where an [NAME] is made to a leasehold valuation tri- bunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works

4 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. …. (4)In section 20 and this section “the consultation require- ments” means requirements prescribed by regulations made by the Secretary of State. (5)Regulations under subsection (4) may in particular include provision requiring the landlord— (a) to provide details of proposed works or agreements to ten- ants or the recognised tenants’ association representing them, (b) to obtain estimates for proposed works or agreements, (c) to invite tenants or the recognised tenants’ association to propose the names of persons from whom the landlord should try to obtain other estimates, (d) to have regard to observations made by tenants or the rec- ognised tenants’ association in relation to proposed works or agreements and estimates, and (e) to give reasons in prescribed circumstances for carrying out works or entering into agreements.

7. The [NAME] on 21st October 2020 and subsequently varied on the 28th October 2020 required any tenants who opposed the [NAME] to make their objections known on the reply form produced with the [NAME]. The Tribunal is aware that there has been one objection from [NAME] [NAME] of flat 2. This objection has been carefully consid- ered by the tribunal. The objection states there has been a lack of trans- parency and communication with leaseholders in connection with the display and postal confirmation of the [NAME]. There has not how- ever been an objection in connection with the works themselves.

8. We are informed the statutory consultation procedure has commenced with leaseholders in receipt of the first stage letter of intention under the Section 20 process Further, it is stated that all leaseholders were informed that an [NAME] has been made to the Tribunal for dispen- sation for the replacement pump works, although at the time this was disputed by [NAME]. The Dispensation was thought necessary to speed up the replacement of the two defective pumps.

9. The Decision 10. By [NAME] of the tribunal dated 21 October 2020 it was decided that the [NAME] be determined without a hearing or by way of a video

5 hearing. One objection to the [NAME] received but there was no such objection to the case being determined on written representations.

11. The tribunal had before it a bundle of documents prepared by the appli- cant that contained the [NAME], grounds for [NAME] the applica- tion, specimen lease the Tribunal [NAME] and a letter from [NAME] objecting to the display of the [NAME] as set out in the Direc- tions.

12. The issues 13. The only issue for the Tribunal to decide is whether or not it is reasona- ble to dispense with the statutory consultation requirements. This ap- plication does not concern the issue of whether or not service charges will be reasonable or payable.

14. Having read the evidence and submissions from the Applicant and hav- ing considered all of the documents and grounds for [NAME] the appli- cation provided by the applicant, the Tribunal determines the dispensa- tion issues as follows.

15. Section 20 of the Landlord and Tenant Act 1985 (as amended) and the Service Charges (Consultation Requirements) (England) Regulations 2003 require a landlord planning to undertake major works, where a leaseholder will be required to contribute over £250 towards those works, to consult the leaseholders in a specified form.

16. Should a landlord not comply with the correct consultation procedure, it is possible to obtain dispensation from compliance with these re- quirements by such an [NAME] as is this one before the Tribunal. Essentially the Tribunal must be satisfied that it is reasonable to do so.

17. In the case of [COMPANY] v Benson [2013] UKSC 14, by a majority decision (3-2), the Supreme Court considered the dispen- sation provisions and set out guidelines as to how they should be ap- plied.

18. The Supreme Court came to the following conclusions: a. The correct legal test on an [NAME] to the Tribunal for dis- pensation is:

“Would the flat owners suffer any relevant prejudice, and if so, what relevant prejudice, as a result of the landlord’s failure to comply with the requirements?”

6 b. The purpose of the consultation procedure is to ensure lease- holders are protected from paying for inappropriate works or paying more than would be appropriate. c. In considering applications for dispensation the Tribunal should focus on whether the leaseholders were prejudiced in either re- spect by the landlord’s failure to comply. d. The Tribunal has the power to grant dispensation on appropriate terms and can impose conditions. e. The factual burden of identifying some relevant prejudice is on the leaseholders. Once they have shown a credible case for prej- udice, the Tribunal should look to the landlord to rebut it. f. The onus is on the leaseholders to establish: i. what steps they would have taken had the breach not hap- pened and ii. in what way their rights under (b) above have been preju- diced as a consequence.

16.

Accordingly, the Tribunal had to consider whether there was any preju- dice that may have arisen out of the conduct of the applicant and whether it was reasonable for the Tribunal to grant dispensation follow- ing the guidance set out above.

17. The tribunal is of the view that, taking into account the one objection, it could not find prejudice to any of the leaseholders of the property by the granting of dispensation relating to the essential replacement of the two defective water pumps providing a cold water supply to the five flats as set out in the documentation in the trial bundle submitted in support of the [NAME].

18. The Tribunal was mindful of the fact that the works are being under- taken by the applicant supported by [NAME] and with a con- sultants report prepared by [COMPANY]. and that therefore dispensation is wholly appropriate.

19. The applicant and the contractors believe that the works are vital and this is a health and safety issue affecting the five residents identified in this building. The applicant also says that in effect the tenants of the properties have not suffered any prejudice by the failure to consult prior to the undertaking of these works. On the evidence before it the Tribunal agrees with this conclusion and believes that it is reasonable to allow dispensation in relation to the subject matter of the applica- tion. It must be the case that the applicant must ensure that there is an adequate water supply provided to the leaseholders in accordance with

7 the terms of the lease .The replacement two pumps should therefore be carried out as a matter of urgency, hence the decision of the Tribunal.

20. Rights of appeal made available to parties to this dispute are set out in an Annex to this decision.

21. The applicant shall be responsible for formally serving a copy of the tri- bunal’s decision on all leaseholders named on the schedule attached to the [NAME]. Furthermore, the applicant shall place a copy of the tri- bunal’s decision on dispensation together with an explanation of the leaseholders’ appeal rights on its website (if any) within 7 days of re- ceipt and shall maintain it there for at least 3 months, with a suffi- ciently prominent link to both on its home page. Copies must also be placed in a prominent place in the common parts of the buildings. In this way, leaseholders who have not returned the reply form may view the tribunal’s eventual decision on dispensation and their appeal rights.The Tribunal requests the applicant to confirm to the Tribunal this has been carried out.

Name: Mr [NAME]: 16th December 2020

8 ANNEX - RIGHTS 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 of- fice within 28 days after the Tribunal sends written reasons for the deci- sion to the [NAME].

3. If the [NAME] is not made within the 28 day time limit, such applica- tion 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 permis- sion 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.