First-tier Tribunal Grants Dispensation from Consultation Requirements

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00BK/LDC/2022/0232 Property

: [NAME], [ADDRESS], [POSTCODE] Applicant : [redacted] England Representative : [COUNSEL] Respondents :

[redacted] flats listed in the [NAME] :

In person Type of [NAME] :

For dispensation from the consultation requirements under section 20ZA Landlord & Tenant Act 1985 Tribunal :

Mr [APPELLANT] (Hons) LLM Property Law MA FRICS

Date of Decision : 7th March 2023

DECISION

This has been a remote paper determination, which has been consented to by the parties. A face-to-face hearing was not held because it was not practicable and no one requested same.

The documents the Tribunal were referred to were in a bundle of some 275 pages.

Decision

(1) The tribunal determines that unconditional dispensation should be granted from the consultation requirements from section 20ZA of the Landlord and Tenant Act 1985 (the Act) in respect of the property [NAME], [ADDRESS], [POSTCODE]. (2) We make no determination as to the reasonableness of the costs of same, these being matters which can be considered, if necessary, under the provisions of s27A and s19 of the Act. The [NAME]

1. This [NAME] is made by Church Commissioners for England C/O [NAME].

2. The [NAME] seeks dispensation from the consultation requirements under section 20ZA of the Landlord and Tenant Act 1985.

3. The [NAME] is concerned solely with the question of what consultation if any should be given of the consultation requirements of section 20 of the 1985 for works costing in excess of £250 per flat. It is not concerned with the reasonableness or payability of any service charges which may arise.

4. The applicant landlord has applied for dispensation from the statutory consultation requirements in respect of proposed electrical infrastructure works which included UK Power Network stripping out the original cast iron service heads. The estimated cost of the works was originally quoted at £110,000 + VAT based on experience of similar projects. However, when UKPN assessed the scale and extend of the works, they provided a quote of £176,903.28 + VAT – totalling £212,283.94.

5. Section 20 Part I notices were issued to all leaseholders on 14 August 2017, Section 20 Part 2 notices were issued on 14 October 2020 and Section 20 Part 3 noticed were issued on 2 February 2021.

The hearing

6. A written [NAME] was made by [NAME] who have been appointed by The Church Commissioners for England, to make this [NAME]. The case was decided on paper and no appearances were made. The tribunal considered the written bundle of 275 pages, in support of the [NAME]. Background 7. [NAME] is a purpose-built development of 250 flats, consisting of four separate entrance blocks.

8. The Applicant in this case is recorded in box 1 of the [NAME] form as the asset manager. The Church Commissioners for England own the block freehold subject to long leases.

9. The [NAME] notes, “Leaseholders were consulted on the basis that the cost of the UKPN works would be £110,000 plus VAT. However, the final costs were £176,903.28 plus VAT. It was agreed that the Church Commissioners would instruct UKPN directly to avoid the contractors mark up of 15% and save costs for the leaseholders.” 10. “The applicant was unable to comply with the formal consultation process under section 20 Landlord and Tenant Act 1985. To protect the stability and structure of the Building, prevent any further substantial damage from occurring and ensure no serious harm came to the Respondents and occupiers for each stage of the consultation procedure as prescribed by the Service Charges (Consultation Requirements) (England) (Regulations) 2003 would have resulted in an unacceptable delay to the works being carried out to the detriment of the Respondents.” 11. The Directions dated 11th January 2023 provided for the tenants to be given copies of the [NAME] form, a brief statement to explain the reasons for the [NAME] and display a copy of the directions in a prominent place in the common parts of the property, by 25th January 2023.Additionally sending an e mail to the tribunal by 30 January 2023 confirming and stating when done.

11. The Directions also note that any leaseholder who opposes the [NAME] should by the 8th February 2023 complete the reply form and return it to the tribunal.

12. The only issue for the tribunal is whether or not it is reasonable to dispense with the statutory consultation requirements of section 20 of the 1985 Act. This [NAME] does not concern the issue of whether any service charge costs will be reasonable or payable. Documents Applicants 13. The Bundle contained The Statement of Case of the Applicant. This noted at 2.13 that the Church Commissioners believe it was necessary to instruct UKPN directly in order to Avoid the contractors mark up of 15% and save costs for leaseholders Ensure no further delay in the project Carry out the obligations set out in the lease to maintain the building The bundle also contains a specimen lease. Additionally, a separate e mail dated 30 Th January 2023 from [NAME] of [NAME] confirms a copy of the [NAME] form, directors and statement of account was sent to all leaseholders that they had an email address for including the [COMPANY]. Those not e mailed were contacted on 30th January 2023 by post. Respondents 14. The tribunal is not in receipt of any Reply Forms of other communication from any leaseholders nor the [COMPANY]. The tribunal’s decision 15.

Accordingly, we find that unconditional dispensation should be granted. 16.The tribunal grants dispensation under section 20 ZA of the Landlord and Tenant Act 1985 and the Service Charges (Consultation) (England) 2003 for the works set out in the [NAME].

17. We are, aware of the judgment in [COMPANY] v Benson and others [2013] UKSC 14. The [NAME] for dispensation is not challenged.

18. The Supreme Court (Lord [NAME] at para 50) accepted that there must be real prejudice to the tenants. Indeed, the Respondents do not oppose the [NAME]. It is accepted that we have the power to grant dispensation on such terms as we think fit. However, the Landlord is entitled to decide the identity of the contractors who carry out the work, when they are done, by whom and the amount. The safety net for the Respondents is to be found in sections 19 and 27A of the Landlord and Tenant Act 1985.

19.

Accordingly, we find that unconditional dispensation should be granted. In [NAME] our decision we have borne in mind the quotes which we were referred, which in our finding clearly indicate that works are required at the Property.

20. Our decision is in respect of the dispensation from the provisions of s20 of the Act only. Any concern that a Respondent, that has as to the standard of works, the need for them and costs will need to be considered separately, following an [NAME] to do so should one be made, and their position is not affected by our decision on this [NAME].

[NAME]: [NAME] 7th March 2023.

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 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].

3. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request to 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 (ie 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