Landlord Allowed to Proceed Without Tenant Consultation Due to Urgency

OUTCOME: Allowed

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Case Reference : MAN/00BY/LDC/2022/0064

Properties : 415 units at [NAME], [ADDRESS], [POSTCODE]

Applicant : [redacted] [APPELLANT] : Cullimore Dutton Solicitors

Respondents : [redacted]

Properties (see Annex)

Type of Application : Landlord and Tenant Act 1985

- section 20ZA

Tribunal Members : Judge J Holbrook

Date and venue of : Determined without a hearing Hearing

Date of Decision : 26 July 2023

DECISION

© CROWN COPYRIGHT 2023

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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DECISION

Compliance with the consultation requirements of section 20 of the Landlord and Tenant Act 1985 is dispensed with in relation to works comprising the construction of a building on site to provide a suitable and permanent base for contractors and/or employees of [NAME] which includes recreational space, a kitchen, washing facilities and storage.

REASONS

Background

1. On 22 December 2022, an application was made to the First-tier Tribunal (Property Chamber) (“the Tribunal”) under section 20ZA of the Landlord and Tenant Act 1985 (“the Act”) for a determination to dispense with the consultation requirements of section 20 of the Act. Those requirements (“the consultation requirements”) are set out in the Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Regulations”).

2. The application was made by [NAME] (2001) [COMPANY] and relates to premises known as [NAME], [ADDRESS], [POSTCODE] (“the Properties”). The Applicant is the management company for the [APPELLANT]. The Respondents to the application are the long [NAME] of the 415 units. A list of the Respondents is set out in the Annex hereto.

3. The only issue for the Tribunal to determine is whether or not it is reasonable to dispense with the consultation requirements.

4. The works in respect of which dispensation is sought concern the following works to construct a building to provide a suitable and permanent base for contractors and/or employees of [NAME] at the site of the [COMPANY]: a. Provision of site security/fencing. b. Carrying out of generic and dynamic risk assessments, provision of documents, insurance cover and health and safety documentation to [NAME]. c. Provision or installation and removal of scaffolding. d. Installation of new drains to meet existing drainage system. e. Excavation of site to prepare for f strip foundations and pour concrete foundations. f. Installation of an insulated concrete slab with a 70mm screed finish. g. Building of shell walls using internal block work and external brickwork to match existing surrounding buildings.

3 h. Provision of wooden roof trusses with flat plain concrete roof tile including all plastic soffits/fascia/rainwater goods. i. Provision of insulation within the roof space. j. Provision of Upvc Windows and doors. k. Provision of timber stud walls l. Completion of all plastering. m. Provision of all electrical wires, installations, plugs and sockets, plus associated connections. n. Carrying out of all plumbing requirements, including the provision of pipes, connections, new bathroom/toilets and shower. o. Carrying out of tiling to the shower cubicle and above the hand basin in the toilet using a plain white tile. p. Provision of the second fix joinery throughout the building, supplying and fitting kitchen units, architraves, skirting boards and doors. q. Carry out all panting throughout the new building. r. Provision of all flooring coverings, including provision and fitting of carpets and vinyl flooring.

5. Each of the Respondents have been given notice of the application and have been sent a copy of the Applicant’s supporting evidence. They have also been provided with a copy of the case management directions issued by the Tribunal on 28 April 2023. The directions required any Respondent who opposed the application to notify the Tribunal of their objection within 21 days of receipt of the Applicant’s bundle of documents. Ten Respondents have raised queries with the Applicant surrounding the works in response, however no objections to the application have been received.

6. I have determined this matter following a consideration of the Applicant’s case, but without holding a hearing. Rule 31 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 permits a case to be dealt with in this manner provided that the parties give their consent (or do not object when a paper determination is proposed). In this case, the Applicant has given its consent and the Respondents have not objected. Moreover, having reviewed the case papers, I am satisfied that this matter is indeed suitable to be determined without a hearing: although the Respondents are not legally represented, the application is unopposed and the issues to be decided are readily apparent.

6. The Tribunal did not inspect the site of the [COMPANY], but I understand there to be 13 separate purpose-built blocks with an average of 20-30 units save for CQ6 which contains 66 units.

Grounds for the application

7. The Tribunal is advised that the Applicant is required to build permanent facilities for full time contractors, employed by [NAME], to utilise as an office whilst managing and carrying out maintenance and work required at the site. Notably, works potentially required to the

4 building following a fire risk assessment. The Applicant’s case is that they have applied to the Tribunal for dispensation of the consultation requirements due to the risk of prejudice to the [NAME] if works did not progress urgently. The Applicant was unable to obtain a quote from more than one contractor who could undertake the necessary work in 2022 to ensure that they did not breach their obligations to the full-time staff. The Applicant highlights that the quote from the contractor [APPELLANT] was competitively priced, however it was only available to accept for a short window. According to the Applicant, the cost benefitted all [NAME] and would not cause any financial detriment to them, which are two factors that were considered at a board meeting when deciding to initiate the works without adhering to the consultation requirements. The works have therefore already commenced. The Applicant states that they intend to pay for the works using money from reserves, as agreed in the AGM in 2021, which is the most cost-effective way to proceed. Consequently, the [NAME] shall not be asked to financially contribute further to fund the works costing £114,000 plus VAT.

8. The Applicant submits that if a consultation was conducted, the contractors would not honour their original quote and therefore there could have been additional costs and potentially no contractor to carry out the urgent works.

Law

9. Section 18 of the Act defines what is meant by “service charge”. It also defines the expression “relevant costs” as:

the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable.

10. Section 19 of the Act limits the amount of any relevant costs which may be included in a service charge to costs which are reasonably incurred, and section 20(1) provides:

Where this section applies to any qualifying works … the relevant contributions of tenants are limited … unless the consultation requirements have been either– (a) complied with in relation to the works … or (b) dispensed with in relation to the works … by the appropriate tribunal.

11. “Qualifying works” for this purpose are works on a building or any other premises (section 20ZA(2) of the Act), and section 20 applies to qualifying works if relevant costs incurred on carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.00 (section 20(3) of the Act and regulation 6 of the Regulations).

5 12. Section 20ZA(1) of the Act provides:

Where an application is made to the appropriate tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works … the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.

13. Reference should be made to the Regulations themselves for full details of the applicable consultation requirements. In outline, however, they require a landlord (or management company) to:

• give written notice of its intention to carry out qualifying works, inviting [NAME] to make observations and to nominate contractors from whom an estimate for carrying out the works should be sought;

• obtain estimates for carrying out the works, and supply [NAME] with a statement setting out, as regards at least two of those estimates, the amount specified as the estimated cost of the proposed works, together with a summary of any initial observations made by [NAME];

• make all the estimates available for inspection; invite [NAME] to make observations about them; and then to have regard to those observations;

• give written notice to the [NAME] within 21 days of entering into a contract for the works explaining why the contract was awarded to the preferred bidder if that is not the person who submitted the lowest estimate.

Conclusions

14. The Tribunal must decide whether it was reasonable for the works to go ahead without the Applicant first complying with the consultation requirements. Those requirements are intended to ensure a degree of transparency and accountability when a landlord (or management company) decides to undertake qualifying works – the requirements ensure that [NAME] have the opportunity to know about, and to comment on, decisions about major works before those decisions are taken. They also ensure that [NAME] are protected from paying for inappropriate work, or from paying more than would be appropriate for necessary work. It is reasonable that the consultation requirements should be complied with unless there are good reasons for dispensing with all or any of them on the facts of a particular case.

15. It follows that, for it to be appropriate to retrospectively dispense with the consultation requirements, there needs to be a good reason why the works could not be delayed until the requirements had been complied

6 with. The Tribunal must weigh the balance of prejudice between, on the one hand, the need for swift action and, on the other hand, the legitimate interests of the [NAME] in being properly consulted before major works begin. It must consider whether this balance favours allowing the works to be undertaken immediately (without consultation), or whether it favours prior consultation in the usual way (with the inevitable delay in carrying out the works which that will require). The balance is likely to be tipped in favour of dispensation in a case in which there is an urgent need for remedial or preventative action, or where all the [NAME] consent to the grant of a dispensation.

16. In the present case, it is clear that the works concerned should have been undertaken as soon as possible, not only to provide suitable facilities on site for full time staff to allow them to complete maintenance and remedial works to the [COMPANY], but also to ensure that the most competitive price available at the time could be achieved. While the statutory consultation requirements have not been complied with, the Respondents have previously been informed about the proposed works and given the opportunity to raise questions. In reaching my decision, I have had regard to the fact that no objections were raised by the Respondents when provided with the opportunity to do so. There is no evidence that the Respondents have been, or would be, prejudiced by the lack of compliance with the consultation requirements.

I therefore conclude that unconditional retrospective dispensation should be granted.

17. Nevertheless, the fact that the Tribunal has granted retrospective dispensation from the consultation requirements should not be taken as an indication that I consider that the amount of money deducted from the reserve fund as a result of the works is likely to be reasonable or, indeed, that such charges should be payable by the Respondents. I make no findings in that regard.

Signed: J Holbrook Judge of the First-tier Tribunal Date: 26 July 2023

7 ANNEX (List of Respondents)

Mr [NAME] Mr [NAME] Ms [NAME] Mr & Ms [NAME] Mrs [NAME] Mrs [NAME] Mr [NAME] & [NAME] [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Ms [NAME] & Ms [NAME] Mr & Ms [NAME] & [NAME] & [NAME] Mr [NAME] Ms [NAME] [NAME] [NAME] [NAME] T [NAME] Ms [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Ms [NAME] Mrs [NAME] [NAME] Mr [NAME] Mr [NAME] Mr & Mrs [NAME] [NAME] [NAME] [NAME] Mr [NAME] J [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr & Mrs [NAME] & [NAME] Mrs [NAME] [NAME] [NAME] Ms [NAME] Mrs [NAME] Mr [NAME] Ms [NAME] [NAME] Mr [NAME] K [NAME] Mr [NAME] [NAME] S [NAME] Mr [NAME] Mr & [NAME] [NAME] & Kim Buckeridge & Booty Mr [NAME] Mrs [NAME] Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Ms [NAME] Ms [NAME] Mr [NAME] 2 Ltd Mr [NAME] Mr & Mrs [NAME] [NAME] Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] [NAME] & Mrs [NAME] Mr [NAME] Mr [NAME] Ms [NAME] Mr & Mrs [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] Mrs [NAME] Mr & Mrs [NAME] J [NAME] Mr [NAME] Ms [NAME] Mrs [NAME] Mr [NAME] D [NAME] [NAME] [NAME] Mr [NAME] R [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] Mr [NAME] J [NAME] Ms [NAME] Mr [NAME] [NAME] [NAME]

8 [NAME] Mr [NAME] [NAME] [COMPANY] Mr [NAME] [NAME] Mr [NAME] & Ms [NAME] Ms [NAME] Mr [NAME] [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] [COMPANY] Ms [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] Mr [NAME] Ms [NAME] Mr [NAME] Mr [NAME] Mr [NAME] La [NAME] [NAME] [NAME] Mr & Mrs [NAME] [NAME] [NAME] Mr [NAME] & Mr [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] Mr [NAME] [NAME] [NAME] [NAME] Ms [NAME] Ms [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] Mr W Judge Mr Douglas James Grimshaw Mr [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] & [NAME] [NAME] Ms [NAME] Mr [NAME] J [NAME] Mr [NAME] Mr [NAME] & [NAME] Ms [NAME] Mr [NAME] Mr [NAME] Mrs [NAME] Mr & Mrs [NAME] Ms [NAME] Ms [NAME] Mr [NAME] Mr [NAME] Ms [NAME] M [NAME] [NAME] [NAME] [NAME] Mr & [NAME] [NAME] and Charlotte Sands & Moran Mr [NAME] Mr & Mrs [NAME] Ms [NAME] J [NAME] Mr [NAME] [NAME] [NAME] [NAME] Mr M & [NAME] [NAME] Mr [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] Mr [NAME] [NAME] [NAME] K [NAME] Mr [NAME] [NAME] [NAME] [NAME] Mr [NAME] Mr & Mrs S Street Ms V [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Mrs [NAME] [NAME] Mr [NAME] Mr & Mrs [NAME] T [NAME] Mr [NAME] [NAME] Mr P Lad (Deceased) Mr [NAME] [NAME] Mrs & [NAME] [NAME]

9 [NAME] [NAME] Mr & Mrs [NAME] [NAME] Mr [NAME] [NAME] [NAME] [NAME] [NAME] [NAME] & Mrs [NAME] Mr [NAME] Mr [NAME] [COMPANY] Mr [NAME] Mr & Mrs [NAME] Mr & Mrs [NAME] [NAME] [NAME] [NAME] Mr & [NAME] & [NAME] & Edwards Mr N R Howard Mr & Mrs [NAME] Mr J [NAME] P & Y [NAME] [NAME] [NAME] Mrs [NAME] Ms N [NAME] Mrs [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] Mr & Mrs [NAME] Mr & Mrs [NAME] Mr [NAME] Mr & Mrs [NAME] & [NAME] & [NAME] P Mason Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] Ms [NAME] Mrs [NAME] Mr [NAME] Ms [NAME] Ms [NAME] Mr [NAME] & [NAME] [NAME] Ms [NAME] [NAME] [NAME] Mr & Mrs [NAME] Mr & Mrs [NAME] [COMPANY] Mr & Ms [NAME] & [NAME] & [NAME] [NAME] M [NAME] [NAME] Ms [NAME] (formerly Mitchell) Ms [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Ms [NAME] A [NAME] Ms [NAME] [NAME] [NAME] [NAME] Mr & Mrs [NAME] [NAME] Ms [NAME] P & M Johnson Treherne Mr [NAME] [NAME] [NAME] [NAME] Mr [NAME] [NAME] Mr & Mrs [NAME] Mrs [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] & [NAME] [NAME] Ms A [NAME] Business Centre Mr [NAME] Mr [NAME] [NAME] Mr & Mrs [NAME] [NAME] Mr [NAME] [NAME] Mr [NAME] [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] Mr [NAME] [COMPANY] Mr [NAME] [NAME] Mr [NAME] [NAME] [NAME] [NAME] Mr N [NAME] Mr [NAME] Ms [NAME] [NAME]

10 Mr [NAME] Mr V [NAME] [NAME] Ms [NAME] [NAME] Ms [NAME] Mr [NAME] [NAME] [NAME] [NAME] [NAME] Mr & Mrs [COMPANY] Mr [COMPANY] Mr & Mrs N Mitchell Mr [NAME] [NAME] Mr [NAME] Mr [NAME] [NAME] Mr & Mrs T Marshall Mr L Simpson Mr [NAME] G [NAME] Mr & Mrs [NAME] Ms [NAME] [COMPANY] Mrs [NAME] Ms [NAME] Mr [NAME] Mr [NAME] Mr [NAME] [NAME] Mr [NAME] Mrs [NAME] Mrs [NAME] Mr [NAME] D Riach & R Anderson-[NAME] [NAME] [NAME] [NAME] [NAME] & [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mrs [NAME] Ms [NAME] ([NAME]) Mr [NAME] Mrs & Mrs B & J Dimeck Ms [COMPANY] VP [COMPANY] Mr [NAME] Mr & Mrs [NAME] [NAME] [NAME] Mr [NAME] Ms [NAME] Ms [NAME] Ms [NAME] Mr & Mrs [NAME] & Jing Zhang & Ma Mrs [NAME] Mr & Mrs [NAME] Mr & Mrs [NAME] & Kajal Shah Mr [NAME] Mr B Savadia Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] Mr & Mrs [NAME] Mr [NAME] 2 Ltd Mr [NAME] [NAME] Mr & Mrs [NAME] & [NAME] Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] Mrs [NAME] Mr [NAME] [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mrs [NAME] Mr & Mrs [NAME] Mr & Mrs [NAME] Mr [NAME] [NAME] Mr [NAME] [NAME] Mr [NAME] Mr & Mrs [NAME] Mr [NAME] Mr [NAME] [NAME] Mr [NAME] [NAME] & [NAME]

11 Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] [NAME] [NAME] Mr [NAME] Ms [NAME] Mr [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] [NAME] [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] [NAME] [NAME] Mr [NAME] Mr [NAME] Mr [NAME] [NAME] I Mateides & [NAME]