First-tier Tribunal Grants Dispensation from Consultation Requirements

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference HMCTS Code : CAM/22UC/LDC/2021/0003 P:PAPERREMOTE Property : Various blocks, estates and street properties in or around Essex Applicant : [redacted] Respondents : [redacted] subject to communal electricity supplies

Type of [NAME] : For dispensation of the consultation requirements under section 20ZA Tribunal Member : Judge Wayte Date of Decision : 2 March 2021

DECISION

Covid-19 pandemic: description of hearing This has been a remote hearing on the papers. A face-to-face hearing was not held because all issues could be determined in a remote hearing on paper and no hearing was requested. The documents that I was referred to are in a bundle of 84 pages, the contents of which I have noted. The order made is described below. The Tribunal determines that an order for dispensation under section 20ZA of the 1985 Act shall be made dispensing with all of the consultation requirements as set out in Schedule 2 to the

2 Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Regulations”) in relation to the placing of energy supply contracts for communal electricity supplies to the relevant properties. The [NAME]

1. The applicant seeks an order pursuant to s.20ZA of the Landlord and Tenant Act 1985 (as amended) (“the 1985 Act”) for the dispensation of any or all of the consultation requirements in respect of a qualifying long-term agreement for the supply of electricity for landlords’ lighting, staircase lighting, lifts, estate lighting, boiler rooms and communal services such as door entry systems and fire alarms serving the residential leasehold properties listed in the [NAME].

2. The respondents are the [NAME] of those properties who will be responsible for part of the cost of those supplies as part of their service charge liability. This [NAME] has no relevance to individual electricity supply on a domestic basis: the [NAME] will be free to continue to obtain their personal electricity from the supplier of their choice.

3. The issue in this case is only whether the consultation requirements of section 20 of the 1985 Act and the Regulations should be dispensed with. If there is any issue as to the cost of the supply that may be the subject of a separate [NAME] under section 27A of the Landlord and Tenant Act 1985. The background 4. The [NAME] was received in January 2021 via our [NAME]. Directions were given on 12 January 2021. Those directions required the applicant to write to the respondents informing them of the [NAME] and the timetable for any objections. A website address was to be provided for a copy of the [NAME], directions and any other relevant documents. The applicant’s bundle contains a copy letter dated 29 January 2021 containing the required information, including confirmation of the process for taking part in the proceedings. The tribunal has not received any reply forms from [NAME]. A number of responses made to the applicant on its website were included in the hearing bundle as detailed below.

5. The directions provided that this matter would be considered by way of a paper determination unless a hearing was requested. A hearing was not requested and accordingly the [NAME] was considered on the papers on 2 March 2021.

3 6. The only issue before the Tribunal is whether it should grant dispensation from all or any of the consultation requirements contained in section 20 of the 1985 Act and the Regulations. The Applicant’s case 7. The statement of case explained that the applicant will carry out a process with its energy consultant, [NAME], to identify which [NAME]) will provide best value bulk electricity supplies to the landlord and then enter into an agreement with the provider(s) at the best price available at the time.

8. Before entering such an agreement, the applicant would ordinarily have to consult with the owners of its residential properties. An initial Notice of Intention has been served on lessees in respect of the new agreement but dispensation is sought from other consultation requirements including provision of the name of the provider, estimated cost of supply and length of the agreement as the applicant claims that the tender process for energy procurement is not compatible with the timetable for statutory consultation, particularly given that a new contract is being sought to start on 1 April 2021 (although the latest information indicates that the current contract expires in March 2022).

9. If the applicant is unable to proceed with the agreement they state that the cost of electricity, which is paid by the [NAME] as part of their service charge, will rise. In particular, the applicant states that the out- of-contract price of electricity is anywhere between 50% and 100% higher than the price that may be obtained through the use of agreements. For this reason, the applicant states that there is no prejudice to the [NAME]. The Respondents’ position 10. The directions provided for the respondents to complete the reply form attached to the directions and send it to the tribunal and the Applicant if they wished to object to the [NAME]. No forms have been received by the tribunal.

11. The bundle contained three responses received by the applicant on its website. Two of these queried whether the new contract would affect the lessee’s choice of domestic electricity and one asked a question about charges and the possibility of solar power. In the circumstances the tribunal concluded that the [NAME] for dispensation was unopposed. The Tribunal’s decision 12. The Tribunal determines that an order for dispensation under section 20ZA of the 1985 Act shall be made dispensing with all of the

4 consultation requirements in relation to the new contract for the supply of communal electricity outlined above. Reasons for the Tribunal’s decision 13. The tribunal has the jurisdiction to grant dispensation under section 20ZA of the 1985 Act “if satisfied that it is reasonable to dispense with the requirements”.

14. The [NAME] was not opposed by the [NAME]. The tribunal is further satisfied that there is no prejudice to them by enabling the applicant to work with its brokers to obtain the best market price and avoid any practical problems caused by the consultation requirements under the Regulations. [NAME] under s.20C Landlord and Tenant Act 1985 15. There was no [NAME] for any order under section 20C before the tribunal. Name: Judge Wayte Date: 2 March 2021

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. 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. 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]. 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. 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.

5 If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).