Landlord Allowed to Skip Consultation for Energy Contracts Until 2028

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00BY/LDC/2025/0628

Properties : Various Properties in Liverpool

Applicants : [redacted]

Respondents : [redacted] Leaseholders/Tenant

Type of Application : Landlord & Tenant Act 1985 – Section 20ZA – Dispensation of Consultation Requirements

Tribunal Members : Judge [NAME] Tribunal Member [NAME], MRICS

Date of Decision : 19th December 2025

DECISION

1. Pursuant to section 20ZA [NAME], the requirement to consult with the Respondents in accordance with the consultation requirements contained in section 20 of the [NAME] and Schedule 1 of the Service Charges (Consultation Requirements) (England) Regulations 2003 (SI 2003/1987) in respect of the qualifying long term agreements for the supply of gas and electricity to the landlord communal area meter supplies of the [RESPONDENT] is dispensed with until 19th December 2028.

REASONS

Preliminary Matters 1. This application is made by [COMPANY], [RESPONDENT], for dispensation from the consultation requirements imposed by Section 20 of the [NAME] (‘the Act’).

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

3. The Applicant in the application notice agreed to the appeal being considered on the papers without an oral hearing. There has been no response to the application from the Respondents. Having reviewed the written evidence and noted the Applicant’s consent, and the absence of any objection from the Respondents, the Tribunal concluded pursuant to Rule 31 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 that it is able to decide the matter without a hearing.

4. In accordance with the ‘Practice Direction from the Senior President of Tribunals: Reasons for decisions’, this decision refers only to the main issues and evidence in dispute, and how those issues essential to the Tribunal’s conclusions have been resolved. Background to the application 5. [COMPANY] have applied pursuant to section 20ZA of the [NAME] ([NAME] 1985), and by way of an application notice dated 4th April 2025, for dispensation of consultation requirements provided for by section 20 [NAME] 1985. The application is in respect of consultation relating to qualifying long-term agreement (QLTAs) for energy supplies to communal areas of the Property, and the service charges relating to these supplies. The communal area charges relate to matters such as lighting in shared areas, lifts, door entry systems, and communal heating.

6. The Respondents to the application are set in Schedule 2 to this decision.

7. A specimen tenancy agreement (in respect of the tenants) and a specimen shared ownership lease (in respect of leaseholders) have been submitted that sets out the parties’ respective obligations in respect of repairs and service charge liabilities.

8. The Applicant seeks dispensation on the following basis – “[COMPANY] have entered into 2 - 3 year contracts for the supply of gas and electricity to our landlord communal area meter supplies. Whilst the start date of the new contracts are staggered dependant on when existing contracts come to an end, for some landlord supplies these new contracts started on 01/10/2024. Meters will be transferred onto new contracts during the course of the next 7/8months, with the last meter transferring onto a new contract

on 14/05/2025.The new contracts entered into have end dates of either 30/09/2027 or 31/03/2028 for electricity supplies, with all gas contracts expiring on 31/12/2027… Given the volatility of the energy market and the increased prices being seen for gas and electricity, [COMPANY] have sought to mitigate the current [NAME] rises by entering into a longer-term contract, for the benefit of tenants and leaseholders. Dispensation allows us to act quickly and lock in the best possible deal before prices rise further, and ensures that as our current contracts come to an end, we move seamlessly in to new contracts avoiding the need for tenants and leaseholders to pay out of contract variable rates on their energy usage.” Issues 9. The following issues were identified for determination by the Tribunal: a. Should the Tribunal permit the statutory consultation requirements under section 20 [NAME] 1985 in relation to works to be dispensed with in accordance with section 20ZA [NAME] 1985? The Law 10. Extracts from sections 20 and 20ZA of the Act are reproduced in Schedule 1, below. Section 20ZA subsection (1) provides that the tribunal may make a determination to dispense with consultation requirements “if satisfied that it is reasonable to dispense with the requirements”.

11. The Tribunal has had regard to the guidance on dispensation given by the Supreme Court in [COMPANY] v [NAME] and Others [2013] UKSC 14 (‘Daejan’), in particular, that in deciding pursuant to section 20ZA whether it is reasonable to dispense with consultation requirements, a Tribunal should consider whether any relevant prejudice would be suffered by the leaseholders.

12. The Tribunal note that whilst the legal burden of proof rests throughout on the landlord, the factual burden of identifying some relevant prejudice that they would or might have suffered rested on the tenants, and that a Tribunal is permitted, subject to evidence, to grant dispensation on terms, including compensating tenants/leaseholders for any prejudice suffered by requiring a landlord to reduce the amount claimed as service charge, and including an order for costs. Evidence 13. The material/evidence submitted by the Applicant is [COMPANY] to the application for dispensation dated 4th April 2025, copy correspondence with the Respondents in relation to the contracts/dispensation application and the specimen tenancy agreements/leases. Those documents are contained in the Applicant’s 91-page electronic bundle.

14. The Tribunal has carefully considered all the available written evidence.

Relevant Evidence and the Tribunal’s Conclusions on the Issues 15. None of the Respondents has submitted a response to the application. On the Applicant’s evidence, correspondence in relation to the application has been sent to each individual Respondent, and the application, together with other documents in relation to the application, including the Tribunal directions, have been made available on the Applicant’s website. There is no evidence to indicate that any Respondent objects to the application, nor is there any evidence before the Tribunal that indicates that any Respondent consider themselves to be prejudiced in any way by the absence of a section 20 consultation exercise.

16. The Applicant’s evidence is that [COMPANY] to that contained in the application (which is supported by a Statement of Truth). The Tribunal would ordinarily expect to have seen more extensive evidence in support of the application, for example, a witness statement of an identified officer of the Applicant, or of a person advising the Applicant on its energy contracts. There is also no evidence as to why this application post-dates the relevant contracts.

17. However, on the basis of the (somewhat [COMPANY]) evidence by way of the application and in the absence of any response from the Respondents objecting to the application, the Tribunal is satisfied that by reason of fluctuations in gas and electricity prices there is likely to be a benefit for tenants and leaseholders (lower prices and therefore service charge liabilities) in the Applicant being able to enter into longer-term energy supply contracts, and to be able to do so quickly.

18. The Tribunal finds that there is no relevant prejudice to any of the Respondents as a consequence of the Applicant entering into the contracts or proposed contracts without first carrying out the section 20 consultation.

19. The Tribunal further notes the evidence of the Applicant that “It is proposed that [COMPANY] would send letters to all tenants and leaseholders affected by the S20 dispensation process, providing details of the application:

1. Details of the consultation procedure is available on our website, including when S20 dispensation may be required.

2. A copy of the S20 application is available on our website.

3. Copies of any documents (e.g. hard copies or electronic broker quotes) can be provided on request.

4. Directions, when made available by the tribunal will be available on our website.”

20. The Respondents have made no representation as to any condition the Tribunal might impose in granting dispensation, however, given the very [COMPANY] evidence supporting the application, the Tribunal consider that the dispensation should be on condition that it is for a defined period (3 years), and that a further application is therefore required (potentially supported by more detailed evidence) on the expiry of that period.

21. There is no evidence of any cost being incurred by the Respondents that should appropriately be met by the Applicant.

22. In these circumstances, the Tribunal considers it reasonable to dispense with consultation requirements for a period of 3 years from the date of the decision, that is, until 19th December 2025.

23. The Tribunal makes no findings, and expresses no view, as to whether any costs associated with the QLTAs for which dispensation has been granted are reasonable in amount, or whether the costs intended to be recovered by way of service charge are contractually payable under the tenancy agreements or are within the meaning of ‘relevant costs reasonably incurred’ in sections 19 and 27A of the Act. No such applications are currently before this Tribunal and the Tribunal’s decision does not include or imply any determination of such matters.

[NAME] Tribunal Judge

19th December 2025

Schedule 1

Extracts from legislation

[NAME] 20

(Subsections (1) and (2):)

(1) Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are [COMPANY] in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either - (a) complied with in relation to the works or agreement, or (b) dispensed with in relation to the works or agreement by (or on appeal from) a tribunal.

(2) In this section 'relevant contribution', in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his lease to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works under the agreement.

Section 20ZA

(Subsection (1))

(1) Where an application is made to a 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.

Schedule 2 Schedule of Respondents - MAN/00BY/LDC/2025/0628 - [COMPANY] (various properties in Liverpool) [ADDRESS], [POSTCODE] Mrs J Murphy

FLAT [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] 27 [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] 32 [NAME] [ADDRESS] [NAME] 34 [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] 40 [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] N [NAME] [ADDRESS] [NAME] [ADDRESS] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mrs [NAME] [ADDRESS] [NAME] 59 [ADDRESS], [POSTCODE] [NAME] [ADDRESS] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] H Ireland

FLAT [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [NAME] [ADDRESS] [NAME] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] 64 [ADDRESS], [POSTCODE]

[NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] T [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mrs [NAME] [ADDRESS] [NAME] 28 [ADDRESS], [POSTCODE]

[NAME] & Mr [NAME] [ADDRESS] [NAME] 19 [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] & Mr [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] [ADDRESS] K [NAME] [ADDRESS] J [NAME] [ADDRESS] [NAME] [ADDRESS] [NAME] 29 [ADDRESS], [POSTCODE]

000Ms P Crawford

[ADDRESS] [NAME] 2 [ADDRESS] [NAME] 3 [ADDRESS] [NAME] 4 [ADDRESS] [NAME] 5 161 [NAME] 7 [ADDRESS] [NAME] 8 [ADDRESS] [NAME] [NAME] 9 [ADDRESS] [NAME] [NAME] 10 [ADDRESS] [NAME] 11 161 [NAME] 12 161 [NAME] 14 [ADDRESS] [NAME] 15 [ADDRESS] [NAME] & Mrs [NAME] 16 161 [NAME] 17 161 [ADDRESS], [POSTCODE]

[NAME] 1 [ADDRESS] [NAME] & T Cummings

[ADDRESS] [NAME] [NAME] 3 [ADDRESS] [NAME] [NAME] 4 [ADDRESS] [NAME] [NAME] 5 [ADDRESS] [NAME] 6 [ADDRESS] JA Smith

[ADDRESS] [NAME] [NAME] 8 18 [NAME] 9 [ADDRESS] [NAME] 10 [ADDRESS] [NAME] [NAME] 11 18 [NAME] 12 18 [NAME] 14 18 [NAME] 15 18 [NAME] 16 [ADDRESS] [NAME] 17 [ADDRESS] [NAME] [NAME] 18 [ADDRESS] [NAME] & [NAME] 19 [ADDRESS] [NAME] 20 [ADDRESS] [NAME] [NAME] 21 [ADDRESS] [NAME] 22 [ADDRESS] [NAME] 23 [ADDRESS]