First-tier Tribunal Grants Landlord Dispensation From Consulting Leaseholders About Major Works

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/21UC/LDC/2020/0061

Property

:

16 [APPELLANT], Eastbourne, East Sussex, [POSTCODE]

Applicant: [redacted]

:

[COUNSEL]

Respondent: [redacted]

:

Type of Application

:

To dispense with the requirement to consult lessees about major works

Tribunal Member(s)

:

Judge J. [NAME] of Decision

:

8th October 2020

DECISION

2 Decision

1. The Applicant is granted 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 in respect of major works to the roof and chimney required to address water ingress. The Tribunal has made no determination on whether the costs of the works are reasonable or payable.

The application and the history of the case

2. The Applicant applied for 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.

3. The Tribunal gave Directions on 24th August 2020, explaining that the only issue for the Tribunal is whether, or not, it is reasonable to dispense with the statutory consultation requirements and is not the question of whether any service charge costs are reasonable or payable. The Directions Order listed the steps to be taken by the parties in preparation for the determination of the dispute, if any.

4. The Directions stated that the Tribunal would proceed by way of paper determination during week commencing 14th September 2020, following provision of a bundle by 11th September, noting the urgency with which the work appeared to require undertaking. Unfortunately, the Applicant’s representative has, her email 17th September 2020 advised, been absent with illness. The case officer subsequently replied explaining the need for a bundle, which was provided on Monday 5th October 2020. This matter has been dealt with urgently thereafter.

5. This is the decision made following the paper determination.

The Law

6. Section 20 of the Landlord and Tenant Act 1985 (“the Act”) and the related Regulations provide that where [NAME] undertakes qualifying works with a cost of more than £250 per lease the relevant contribution of [NAME] (jointly where more than one under any given lease) will be limited to that sum unless the required consultations have been undertaken or the requirement has been dispensed with by the Tribunal. An application may be made retrospectively.

7. Section 20ZA provides that on an application to dispense with any or all of the consultation requirements, the Tribunal may make a determination granting such dispensation “if satisfied that it is reasonable to dispense with the requirements”.

8. The appropriate approach to be taken by the Tribunal in the exercise of its discretion was considered by the Supreme Court in the case of [COMPANY] v [NAME] et al [2013] UKSC 14.

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9. The leading judgment of Lord [NAME] explained that a tribunal should focus on the question of whether [NAME] will be or had been prejudiced in either paying where that was not appropriate or in paying more than appropriate because the failure of [NAME] to comply with the regulations. The requirements were held to give practical effect to those two objectives and were “a means to an end, not an end in themselves”.

10. The factual burden of demonstrating prejudice falls on [NAME]. [NAME] must identify what would have been said if able to engage in a consultation process. If [NAME] advances a credible case for having been prejudiced, [NAME] must rebut it. The Tribunal should be sympathetic to [NAME](s).

11. Where the extent, quality and cost of the works were in no way affected by [NAME]’s failure to comply, Lord [NAME] said as follows:

“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- i.e. as if the requirements had been complied with.”

12. The “main, indeed normally, the sole question”, as described by Lord [NAME], for the Tribunal to determine is therefore whether, or not, [NAME] will be or has been caused relevant prejudice by a failure of the Applicant to undertake the consultation prior to the major works and so whether dispensation in respect of that should be granted.

13. The question is one of the reasonableness of dispensing with the process of consultation provided for in the Act, not one of the reasonableness of the charges of works arising or which have arisen.

14. If dispensation is granted, that may be on terms.

15. The effect of [NAME] has very recently been considered by the Upper Tribunal in [NAME] v [NAME] and Others [2020] UKUT 177 (LC), a decision published only several days ago, although that decision primarily dealt with the imposition of conditions when granting dispensation and that the ability of lessees to challenge the reasonableness of service charges claimed was not an answer to an argument of prejudice arising from a failure to consult.

Consideration

16. The Applicant explained that the building is a 4 storey Edwardian building, including a basement, converted into 7 flats. A sample lease, of Flat 7, was provided with the application (“the Lease”). The Tribunal understands that the leases of the other properties are in the same or substantively the same terms.

4 17. The Applicant explained in the application that problem which has arisen is substantial water ingress through roof felting. The major works relate to addressing the issue with the joint, re-doing the valley and lead work around the chimney. The works to actually rectify the issue have not yet been started. Cost of £1850 + VAT is anticipated. The major works are said to be emergency works where the water ingress is causing the condition of flat 7 to worsen.

20. The Applicant is responsible for repairs and other services and the [RESPONDENT] for contributing. The relevant provisions are contained in, amongst others, clauses 4.(2), 5.(3)- although a portion of relevant clause is omitted from the sample lease as copied- and additionally the Fourth Schedule.

21. There has been only one response from any of the [RESPONDENT] and that one agrees to the application. It necessarily follows that none of the [RESPONDENT] have opposed the application.

22. None of the Respondents have therefore asserted that any prejudice has been caused to them. The Tribunal finds that nothing different would be done or achieved in the event of a full consultation, except for the potential delay and potential problems.

23. Accordingly, the Tribunal finds that the Respondents have not suffered any prejudice by the failure of the Applicant to follow the full consultation process.

24. The Tribunal consequently finds that it is reasonable to dispense with all of the formal consultation requirements in respect of the major works to the roof of the building and not to impose any conditions.

25. This decision is confined to determination of the issue of dispensation from the consultation requirements in respect of the qualifying long- term agreement. The Tribunal has made no determination on whether the costs are reasonable or payable. If a [NAME] wishes to challenge the reasonableness of those costs, then a separate application under section 27A of the Landlord and Tenant Act 1985 would have to be made.

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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 Regional office which has been dealing with the case.

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.