First-tier Tribunal Grants Dispensation for Urgent Works

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00BK/LDC/2019/0102 Property : 86-89 Piccadilly, London [POSTCODE] Applicant : [redacted] : [COUNSEL] at [COMPANY] Respondents : [redacted] set out in the attachment to the application Representative : N/A Type of Application : For the dispensation from the requirements to consult lessees about major works – [POSTCODE] Landlord and Tenant Act 1985 Tribunal Members : [APPELLANT] and venue of Hearing : Paper determination on 29 [ADDRESS] [POSTCODE] Date of Decision : 2 September 2019

DECISION

Decision of the tribunal 1. The tribunal grants the applicant dispensation from the statutory consultation requirements of S20 of the Landlord and Tenant Act 1985 (“the Act”) in respect of works to be carried out to 86-89 Piccadilly, London [POSTCODE] (“the building”) in respect of replacement of a communal cold water supply tank in the roof space above flat 13. The costs to be incurred in respect of the works is said to be in the region of £25,750.00 plus VAT. The background 2. On 8 April 2019 the landlord’s [NAME], [RESPONDENT], received a telephone call from the [NAME] for the lessee of flat 13 to say that water was leaking into the bedroom of the flat through the ceiling. Contractors sent to investigate advised that the communal cold water supply tank in the roof space was leaking and making its way into the flat below. They advised that a previous attempt by the then [NAME] in late 2018 to reseal the tank had clearly failed and the only sensible way forward was to replace the tank and this needed to be done urgently as the leak was causing significant damage to the flat to such an extent that the tenants vacated. On the advice given to them the directors of the [COMPANY] decided to go ahead with the replacement. On 13 May 2019 a Section 20 Notice of intention to do works was sent to all leaseholders as it was anticipated the cost of the works would qualify them as major works for which statutory consultation would be needed. Two quotations were obtained from different contractors both independent of the landlord by late May but with the leak continuing and flat 13’s lessee looking to claim for loss of rent the decision was made to delay no longer and the contractor who submitted the lower tender, Southern Gas Contractors, was instructed to do the work on 4 June 2019. A lead in time for the delivery of parts had to be factored in but the new tanks had been installed and fully tested by 31 July. It is said in the application that any further delay may have required the leaking tank to be isolated and drained down to prevent further leakage with a consequent effect on the cold water supply to the fats connected to the tank. It is further said that the cost of the works would be met from the reserve fund.

3. Despite obtaining the two tenders no second stage consultation, with Notice of Estimates sent to lessees was undertaken as the contractor was instructed prior to the expiry of the consultation period of the first notice. [COMPANY] were instead instructed to apply to the tribunal for dispensation under [POSTCODE] of the Act.

4. The application was made on 20 June 2019 and Directions in respect of this application were made by the tribunal on 27 June 2019 and

again on 22 July 2019. These provided the leaseholders with an opportunity to agree or oppose the application by completing a form included in the directions to advise their support of or opposition to the application to the tribunal. The Directions also required the applicant to send to each lessee a copy of the application and the directions and to display both documents in the common parts of the building. [COMPANY] confirmed this had been done in an email to the tribunal on 1st August 2019.

5. The directions provided for the application to be determined on the papers directed to be submitted to the tribunal unless any of the parties requested an oral hearing; none did and the tribunal considered the application and the supporting documentation on 29 August 2019.

6. In the application the property is described as a purpose built residential block consisting of 16 flats over a ground floor retail shop and office. The lease plan indicates the building is constructed over seven floors. The tribunal did not inspect the property as none of the parties asked for this and it was not considered necessary or proportionate to the issues in the application.

7. Details of the statutory provisions relevant to this application are set out in Appendix 2 to this decision. The tribunal’s decision 8. The leading authority in relation to s.20ZA dispensation requests is [COMPANY] v Benson [2013] 1 WLR 845 (“Benson”) in which the Supreme Court set out guidance as to the approach to be taken by a tribunal when considering such applications. This was to focus on the extent, if any, to which the lessees were prejudiced in either paying for inappropriate works or paying more than would be appropriate, because of the failure of the landlord to comply with the consultation requirements. In his judgement, Lord [NAME] said as follows:

44. Given the purpose of the Requirements is to ensure that the tenants are protected from (1) paying for inappropriate works or (ii) paying more than would be appropriate, it seems to me that the issue on which the LVT should focus when entertaining an application by a landlord under section 20ZA(i) must be the extent, if any, to which the tenants were prejudiced in either respect by the failure of the landlord to comply with the Requirements.

44. Thus, in a case where it was common ground that the extent, quality and cost of the works were in no way affected by the

landlord’s failure to comply with the Requirements, I find it hard to see why the dispensation should not be granted (at least in the absence of some very good reason): in such a case the tenants would be in precisely the position that the legislation intended them to be – ie as if the Requirements had been complied with.

9. None of the leaseholders is opposed to the application nor suggests that the works to be carried out are inappropriate or unnecessary. Nor is there any evidence that the leaseholders will be asked to pay more than is appropriate for the cost of the works.

10. The factual burden of identifying some relevant prejudice is on the leaseholders. They need to show that they have been prejudiced by the failure of the landlord to comply with the statutory consultation procedure. If a credible case of prejudice is established, then the burden is on the landlord to rebut that case.

11. The tribunal is satisfied that no relevant prejudice has been identified. Whilst compliance with the consultation procedure would have enabled the leaseholders to suggest alternative contractors and make observations on quotes received, there is no evidence to suggest that failure to comply with the consultation requirements will lead to the applicant incurring costs in an unreasonable sum, or lead to works being carried out that fall below a reasonable standard. No alternative quotes have been provided that would support such a contention.

12. That these works are urgently required is clear as in the tribunal’s experience an actual leak from a storage tank into living accommodation below will usually result in greater damage and more costs unless dealt with expeditiously. There is nothing before the tribunal to suggest dispensation should not be granted and the tribunal is satisfied that it is reasonable to dispense with the non- complied with requirements of the Service Charge (Consultation Requirements)(England) Regulations 2003. Nothing in this decision to grant dispensation should be taken as limiting any leaseholder’s rights to challenge a subsequent service charge demand on any grounds save as to compliance with the consultation requirements. Name: [NAME] [NAME] [NAME]: 2 September 2019

APPENDIX 1 RIGHTS OF APPEAL

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

2. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application.

3. If the application is not made within the 28 day time limit, such application 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 application for permission to appeal to proceed despite not being within the time limit.

4. The application 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 making the application is seeking.