First-tier Tribunal Grants Dispensation from Consultation Requirements

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/29UH/LDC/2021/0002

Property

:

[ADDRESS] and [ADDRESS] [POSTCODE]

Applicant

:

[redacted]

Representative

:

[COMPANY]

Respondents

:

[redacted]

:

Type of Application

:

To dispense with the requirement to consult [NAME] about major works section 20ZA of the Landlord and Tenant Act 1985

Tribunal Member

:

[NAME] of Decision

:

11 February 2021

DECISION

The Tribunal grants dispensation from the consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of rectifying defective cladding including replacement of the combustible insulation and installation of fire breaks.

In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable.

A copy of this decision shall be sent to [NAME]

2 Background

1. The Applicant seeks dispensation under Section 20ZA of the Landlord and Tenant Act 1985 from the consultation requirements imposed on the landlord by Section 20 of the 1985 Act.

2. The Applicant has submitted a detailed statement of grounds which may be briefly summarised as seeking dispensation from consultation for works to rectify defective cladding including replacement of the combustible insulation and installation of fire breaks.

3. It is proposed that the work is undertaken by the contractor who undertook the original construction and for this reason it is not possible to undertake the competitive tendering required by S.20.

4. The Respondents are both providers of affordable housing let by way of [NAME] and Starter Tenancies at affordable rents. Both Respondents have been kept informed throughout.

5. Both Respondents have confirmed that they will not seek to pass on the cost of the works to their own tenants and as such there is therefore no purpose in serving directions on these sub-tenants.

6. The Applicant has indicated that the work has been started or carried out and that there is no special reason for an urgent determination.

7. The Tribunal made Directions on 12 January 2021 indicating that the application was to be determined on the papers without a hearing in accordance with Rule 31 of the Tribunal Procedure Rules 2013 unless a party objected.

8. The Tribunal sent its Directions to the Respondents together with a copy of the Application and a form to indicate whether they agreed with or objected to the application and if they objected to send their reasons to the Applicant.

9. It was indicated that if the application was agreed to or no response was received [NAME] would be removed as Respondents.

10. [NAME] responded indicating that they agreed with the application and have therefore been removed as Respondents in accordance with paragraph 9 above.

11. No requests for an oral hearing have been received and on receipt of the hearing bundle the issues were examined to determine whether the application could be satisfactorily determined on the papers. The Tribunal is so satisfied and the application is therefore determined in accordance with Rule 31.

12. The only issue for the Tribunal is whether it is reasonable to dispense with any statutory consultation requirements. This decision does not

3 concern the issue of whether any service charge costs will be reasonable or payable.

The Law

13. The relevant section of the Act reads as follows:

S.20 ZA Consultation requirements:

Where an application is made to a Leasehold Valuation Tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long- term agreement, the Tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.

14. The matter was examined in some detail by the Supreme Court in the case of [COMPANY] v [NAME]. In summary the Supreme Court noted the following i. The main question for the Tribunal when considering how to exercise its jurisdiction in accordance with section 20ZA is the real prejudice to the tenants flowing from the landlord’s breach of the consultation requirements.

ii. The financial consequence to the landlord of not granting a dispensation is not a relevant factor. The nature of the landlord is not a relevant factor.

iii. Dispensation should not be refused solely because the landlord seriously breached, or departed from, the consultation requirements.

iv. The Tribunal has power to grant a dispensation as it thinks fit, provided that any terms are appropriate.

v. The Tribunal has power to impose a condition that the landlord pays the tenants’ reasonable costs (including [NAME] and/or legal fees) incurred in connection with the landlord’s application under section 20ZA (1).

vi. The legal burden of proof in relation to dispensation applications is on the landlord. The factual burden of identifying some “relevant” prejudice that they would or might have suffered is on the tenants.

vii. The court considered that “relevant” prejudice should be given a narrow definition; it means whether non-compliance with the consultation requirements has led the landlord to incur costs in an unreasonable amount or to incur them in the provision of services, or in the carrying out of works, which fell below a reasonable standard, in other words whether the non- compliance has in that sense caused prejudice to the tenant.

4

viii. The more serious and/or deliberate the landlord's failure, the more readily a Tribunal would be likely to accept that the tenants had suffered prejudice.

ix. Once the tenants had shown a credible case for prejudice, the Tribunal should look to the landlord to rebut it.

Evidence

15. As referred to in paragraphs 2 and 3 above.

Determination

16. Dispensation from the consultation requirements of S.20 of the Act may be given where the Tribunal is satisfied that it is reasonable to dispense with those requirements.

17. It is accepted that the most appropriate course of action was to engage the original contractor to carry out this work and as such the requirement to obtain competitive tenders and consult with [NAME] could not be met.

18. No objections were received from [NAME] and therefore there has been no indication that they had incurred prejudice as referred to in the [NAME] case referred to above.

19. In view of the above the Tribunal grants dispensation from the consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of rectifying defective cladding including replacement of the combustible insulation and installation of fire breaks.

20. In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable.

21. A copy of this decision shall be sent to [NAME].

[NAME] 11 February 2021

5 RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the [NAME] office which has been dealing with the case. The application must be sent by email to [EMAIL]

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

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking