Landlord Allowed to Skip Consultation for Urgent Flat Repairs

OUTCOME: Allowed

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Case Reference

: CAM/38UF/LDC/2024/0610

Property

: [ADDRESS], [POSTCODE]

Applicant: [redacted]

[NAME], Estate Surveyor

Respondents : [redacted] towards the cost of the relevant works

Type of Application : To dispense with the Consultation Requirements referred to in Section 20 of the Landlord and Tenant Act 1985 pursuant to Section 20ZA

Tribunal

: Judge JR Morris

Date of Application

: 23 September 2024 Date of Original Directions : 7 January 2025 Date of Amended Directions : 13 March 2025 Date of Decision

: 6 May 2025

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2025

Decision

1. The Tribunal is satisfied that it is reasonable to dispense with compliance with the consultation requirements of Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) in respect of the works carried out by [APPELLANT].

2. The Applicant shall serve a copy of the Tribunal’s decision on dispensation, together with the relevant appeal rights attached, to all [NAME].

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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Application

3. On 23 October 2024 the Applicant applied for retrospective dispensation from the statutory consultation requirements in respect of urgent works and consequential repairs to the interior of Flat 3. Flat 3 is at basement level and the water ingress was occurring around a skylight which was at ground level. The work was necessary and urgent because the living conditions within flat 3 were below an acceptable standard. Cherwell District Council summoned the Applicant requiring the works to be carried out (a copy of the summons was provided). Consultation had taken place but the landlord obtained a lower estimate from a contractor who was able to start without delay. The work was estimated to cost in the region of £30,000 plus professional fees.

4. Directions were issued on 27 January 2025 however the Applicant misread these Original Directions believing that the Tribunal would inform the Respondents of the Application. This was not the case. It was for the Applicant to inform the Respondents of the Application. The Directions for this Application were re- issued as Amended Directions with fresh dates which stated that the Application would be determined on or after 12 May 2025 based on written representations and without an inspection, unless either party made a request for an oral hearing by 7 April 2025. No request was received.

5. The Amended Directions required the Applicant by 28 March 2025 to: a) Send to each of the [NAME], by hand delivery or by first-class post, copies of the application form (excluding any list of respondents’ names and contact addresses) and these directions; b) Display a copy of both in a prominent position in the common parts of the Property; and c) to confirm to the Tribunal that this has been done and stating the date(s) on which this was done.

6. The Applicant complied with c) informing the Tribunal that a) was carried out on 17 March 2025 and that b) was carried out on 19 March 2025.

7. The Directions also required those Respondents who opposed the application by 11 April 2025 to: a) Complete the reply form attached to the Directions; and b) Send to the Applicant a statement in response to the Application together with any evidence and other documents upon which they wish to rely.

8. A response was received by the Applicant’s solicitors from the [NAME], which are in the same ownership and this is set out below under “Respondent’s Statement of case” No other replies or statements, have been received by the Applicant or the Tribunal from the Respondent [NAME].

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The Law

9. Section 20 of the Landlord and Tenant Act 1985 limits the relevant service charge contribution of tenants unless the prescribed consultation requirements have been complied with or dispensed with under section 20ZA. The requirements are set out in The Service Charges (Consultation Requirements) (England) Regulations 2003. Section 20 applies to qualifying works if the relevant costs incurred in carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.

10. The consultation provisions appropriate to the present case are set out in Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) (the 2003 Regulations). The Procedure of the Regulations are summarised in Annex 2 of this Decision and Reasons.

11. Section 20ZA allows a Landlord to seek dispensation from these requirements, as set out Annex 2 of this Decision and Reasons and this is an Application for such dispensation.

Submissions & Evidence

12. The bundle provided by the Applicant included: • A copy of the Lease; • The Application Form; • The Directions; • Applicant’s Statement of Case; • Respondent’s Statement of Case; • Report by [NAME] dated 1 June 2023; • Section 20 Notice of Intention dated 12 February 2024 and Statement of Estimates dated 13 September 2024; • Email dated 9 October 2024 • [COMPANY] • Site Visit Reports • Invoices and Certificates for Payment These together set out the Applicant’s case as follows:

The Lease

13. A sample copy of the Lease, which was understood to be common to all the Flats, was provided for Flat 3. Leases are for a term of 125 years from 1 September 2017. The relevant provisions of the Lease are:

a) Clause 1 Definitions

“Building” the land and buildings known as Atlantic house…

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“Retained parts” those parts of the estate as do not comprise the Apartments… including (a) the main structure of the Building including the roof and roof structures, the foundations, the external walls, and internal load bearing walls the structural timbers and other structural members, joists the guttering, and the structure of the balconies, patios, and terraces (including any walls or railings (b) All parts of the Building and estate lying below the floor surfaces or above the ceilings;

“Service Charge” the Tenant’s Share of Total Expenditure incurred in respect of the provision of Services as determined from time to time

“Services” the services as set out in the Seventh Schedule

b) Clause 4. Tenant’s Covenants

4.4.1 To pay to the Landlord…. the Service Charge at the times and in the manner provided…

c) Clause 5. Landlord’s Covenants

5.1 The Landlord shall carry out or provide the |Services on the terms of this lease including the Seventh Schedule

d) Seventh Schedule

Service

2. Renewing repairing maintaining lighting decorating or otherwise treating rebuilding replacing and keeping free from and remedying all defects whatsoever and cleaning the main structure (including all Retained Parts and other concrete floors or other structural members within the Building or Estate other than surfaces which form part of the Property) roof foundations and exterior of the Building …

The Application Form

14. On the Application Form the Applicant described the Property as follows:

The Property had originally been built as an office/commercial building. In or around 2018 the Property was converted into 20 apartment dwellings, 17 of which are accessed via one of the two communal stairwells with the remaining 3

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being on the lower ground floor having their own independent entrances. The property has a car park finished with tarmacadam.

The building is of traditional cavity masonry construction with a mixture of facing brickwork and rendered blockwork elevations surmounted by a predominately pitched, plain tile clad roof. The lower ground floor level was a car park prior to conversion, the area was converted to a habitable space during its latest renovation. This area includes flat 3.

15. The Applicant also gave brief the reasons for the Application which are set out in more detail in the Statement of Case below.

Directions

16. The Amended Directions were complied with as stated above.

Applicant’s Statement of Case

17. The Applicant provided a:

18. Summary of Works

1. Attend site and erect temporary access scaffolding to roof height. Remove any slabs and set aside for re-use. Fully clean down roof covering and remove all existing lead flashing. Supply and install code 2 lead flashing with up-stand detail, and bond into existing brickwork. Clean out drainage outlet and apply roofing sealant to all other areas as required. Replace existing slabs previously set aside. Carry out water testing upon completion and leave working area clean and tidy.

2. Remove block paving and set aside for reuse. Fully clean area and instal new DMP and upstand to light well. Reconnect drainage outlet and reinstate paving on new substrate. Carry out water testing to new installation and drainage system prior to commencement of internal work (cost of internal works within flat 3 will he covered by the Applicant and do not form part of this dispensation application).

19. Reasons given for not following section 20 process

Cherwell District Council summoned the Applicant to Court regarding the works to mitigate leaks into Fat 3 which were below an acceptable standard and the leaks must be dealt with.

Flat 3 is predominantly subterranean and part of the issues were due to ineffective mechanical ventilation within the demise of Flat 3. Works to remedy this are not part of this Application. Other issues within flat 3 are in relation to

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leaks from the ground level paving and, issues with balcony, roof, and leaking rainwater goods.

The Applicant said that a section 20 consultation was undertaken in early 2024 regarding repair and redecoration works to all exterior areas of the Property. After this a revised section 20 consultation was undertaken specifically for repair works to remedy issues in Flat 3 only. [NAME], the managing agent served a Notice of Intention dated 12 February 2024 and a Statement at Estimates, dated 13 September 2024. The Statement of Estimates set out the costs obtained by [NAME] and [NAME] with the consultation ending on 21 October 2024.

Since this consultation was completed, it became apparent that the required works needed to be undertaken with urgently and the Applicant could not wait until [NAME] and [NAME] were available. The Applicant therefore obtained an additional estimate from [APPELLANT], who would be able to start the work without significant delay.

20. Reasons for appointing [COMPANY]

• Their estimate was lower than that of both [NAME] and [NAME]; • They are a firm known to [NAME], the surveyor who will be monitoring the works; and • They were able to undertake the works with a lead-time of approximately 2 weeks. The anticipated costs for the works were £29,218.40 inclusive of VAT and [NAME]’ fees

21. Justification for Dispensation

As [COMPANY] did not appear as a contractor in the Statement of Estimates the Applicant would ordinarily have reconsulted under section 20 however there was not time for a further consultation as the living conditions within Flat 3 had worsened and matters could not be delayed further.

The Applicant referred the Tribunal to the case of [NAME] v [NAME] and Another (2021) where [NAME] argued that the landlord should have reconsulted them after the contractor change. However, the Upper Tribunal ruled that the landlord was not required to do so, as the original consultation process had already established the scope and cost of the necessary works. reference was also made to Long Term Reversions ([APPELLANT] (2022) and Philips v Francis (2014). The Applicant submitted that further consultation would have been of no significant benefit because: • Flat 3 would have deteriorated further and the [NAME]’s health might have suffered.

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• The [NAME] have been fully consulted on the proposed works which remained unchanged. • The consultation requirement applied to a “set of works" (Phillips v Francis [2014] EWCA Civ 1395), and if a contractor engaged to carry out a set of works is unable to complete it there is no requirement for a fresh consultation about the same set of works. • The estimated costs in using [COMPANY] were lower than that of any other contractor who provided an estimate, as such the [NAME] are not financially prejudiced. • Reconsulting would not result in the work being done more efficiently or more quickly or more economically. • The Applicant acted reasonably, and showed no disregard or prejudice to [NAME].

22. Costs Charged to the Service Charge: [NAME] £794.78 including [NAME] £28,110.64 including [NAME] £8,040.99 including [NAME] £2,009.98 including VAT Total

£38,956.98 including VAT

23. Supporting Documents for Statement of Case

The Applicant provided the following documents in support of its Statement of Case:

[NAME], [NAME], dated 1 June 2023

24. The [NAME] only related to Flat 3. Reference was made to an earlier main report which [NAME] had carried out, which dealt with dampness affecting a number of properties, however, the water ingress affecting Flat 3 was considered too complex to be included in that report and so was separately analysed. Photographs were provided showing damage to a large area of plasterwork in the ceiling of the bedroom of Flat 3 beneath an area of block paving around a roof light.

25. The Flat 3 Report concluded that water ingress into the bedroom of the Flat is the result of failed or insufficient water proofing to the surface above and around the roof light. This is a latent defect associated with the alterations made to the building at the time of conversion and it was not possible to confirm the points of failure without first removing the block paving and exposing the substrate beneath. Once done a new water proof membrane should be provided to the entire area currently covered by block paving and raised light well. Localised repairs were not recommended and it was recommended that remedial action be taken immediately.

26. The remedial action recommended was:

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1. Remove block paving and any loose matter beneath to the entire area above flat 3 including paving on the opposite side of' the bay window;

2. Clean surface to expose waterproof layer/concrete substrate and setting of light well upstands;

3. Provide new waterproof membrane to newly exposed surface, continuing through height of light well upstand;

4. Re-connect downpipe to original path;

5. Re-lay block paving;

6. Remove all affected internal plaster finishes, clean concealed areas to remove moisture and mould growth;

7. Wet test downpipe through internal portion whilst exposed to ascertain if leaks are present. seal if necessary;

8. Install new plasterwork and joinery, floor coverings, etc. to reinstate habitable room.

Notices of Intention

27. A copy of a Notice of Intention dated 12 February 2024 served on the [NAME] by [NAME] which set out works regarding Flat 3 as follows:

“Complete all relevant - external and internal repairs to Flat 3 due to severe water ingress via the external skylight situated above the main bedroom. The [NAME]’ actual recommendations are set out below but actual requirement of works may differ once contractor assessment and actual works commence.

External Complete full removal of block paving and any loose matter around the areas above Flat 3. Including all on the opposite side of the bay window. Clean surface to expose water proof layer/concrete substrate concreted setting of light well upstands. Provide new waterproof membrane to the newly exposed surface continuing through the height of the light well upstand. Reconnect downpipe to the correct path. Relay the block paving.

Internal Remove all affected internal plaster finishes. Clean concealed areas to remove any moisture and mould growth. Wet test downpipe through internal portion whilst exposed to ascertain if leaks are present and seal if necessary. Instal new plaster work joinery floor covering and reinstate room.”

The Notice also refers to other works to be carried out.

Statement of Estimates

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28. A copy of a Statement at Estimates, dated 13 September 2024 relating to the Flat 3 works served by [NAME], the managing agent, were provided. Estimated costs were as follows:

[NAME] [NAME]

£20,450.00

£21,150.00 Contingency @ 10%

£2,045.00

£2,115.00 Project Management Fee @ 10% £2,045.00

£2,115.00 Sub-total

£24,540.00

£25,380.00 VAT @ 20%

£4,908.00

£5,06.00. Total

£29,448.00

£30,455.00

Email dated 9 October 2024 from the Applicant to the Project Surveyor and the Managing Agent re Works to Flat 3

29. The email dated 9 October 2024 from [APPELLANT] the Applicant’s Estate Surveyor set out notes from a meeting with [NAME], the project [NAME] and [NAME], the managing agents, concerning remediation for a range of works relating to the Property including Flat 3. Regarding Flat 3 it was noted that: • The warranty provider had gone into liquidation. • Section 20 Notices regarding Flat 3 were to expire in a few weeks and the costs were high. • The leak in Flat 3 was prevalent and that mitigatory actions were being put in place. The email also refers to work to be carried out on 2 balconies which are leaking and may be a contributing factor to the ingress of water into Flat 3. • Quotes were being obtained from RPS (who was not a contractor in the original consultation) who are more local and have affected similar repairs elsewhere at a better cost. It was said that if these costs were cheaper, then they will be proceeded with, there being no financial prejudice in using a contractor that was not in the original consultation. If they are not cheaper, then the cheapest consultation contractor will be used to complete the Flat 3 works.

[COMPANY]

30. Two quotations dated 17 October 2024 from [COMPANY] were provided:

Quotation 1 Appears to refer to roof work

£5,380.42 VAT

£1,076.50 Total

£6,456.92

Quotation 2 Flat 3 External works to Sky Light

£10,469.35 Flat 3 Internal Remediation

£8,498.90

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Sub Total

£18,968.25 VAT

£3,793.65 Total

£22,761.90

Site Visit Reports and Invoices

31. Two Site Visit interim inspection reports were provided with photographs for 1) 19 November 2024, 2) 11 December 2024 together with invoices and certificates of payment dated 7 November 2024 for £28,110.64 including VAT and 21 December 2024 £8,040.99 including VAT to contractors and £2,009.98 including VAT to the [NAME] as follows: [NAME] £794.78 including [NAME] £28,110.64 including [NAME] £8,040.99 including [NAME] £2,009.98 including VAT Total

£38,956.98 including VAT

Respondent’s Statement of Case

32. The Applicant stated that a response was received from the [NAME] which are in the same ownership. The Applicant’s solicitors, [APPELLANT] served a copy of the Bundle in compliance with the Directions on 17 March 2025. In response the [NAME] stated:

"…with regards to the section 20, please can you clarify the position surrounding the warranty provider AHCI? As far as we know, they are still trading and have not gone into liquidation?”

In response [NAME] referred the [NAME] to the New Homes warranty and the need to make a claim on this as stated in their letter of 9 October 2024.The Applicant said that no statement of case or other representations was received.

Findings

33. The Tribunal found from the evidence adduced that the ingress of water was causing damage to the Property and that remediation was urgent.

34. The Tribunal examined the information provided.

35. The Tribunal noted that the Applicant had undertaken a section 20 consultation process in respect of qualifying works which related to the building as a whole and then carried out a further consultation in respect of works relating to Flat 3. The Tribunal found that these consultations meant the [NAME] were fully informed of the qualifying works to be carried out and their likely cost and had been given an opportunity to nominate contractors and make observations.

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36. The Tribunal accepted the court proceedings showed the necessity and urgency to carry out the works to the light well of Flat 3 and remediate the damage to the interior. The photographs provided from the various reports further supported the urgent need to carry out remedial works. Given this, following [NAME] v [NAME] and Another (2021) and Phillips v Francis [2014] EWCA Civ 1395 the Tribunal found that it was justified to engage an alternative contractor to carry out some of the qualifying works already consulted upon if the contractors who were the subject of the consultation were not available within a reasonable timeframe.

37. The Tribunal found that part 2 of the Summary of Works in the Application Form and Quotation 2 of [COMPANY] dated 17 October 2023 in respect of Flat 3’s light well and interior were in accordance with those recommended by the [NAME], in their report dated 1 June 2023, those described in the Notice of Intention dated 12 February 2024 served by [NAME], the Applicant’s Managing Agent, and those that were undertaken from the evidence of the Interim Site Inspection Reports of 19 November 2024 and 11 December 2024.

38. The Tribunal was not clear to what part 1 of the Summary of Works in the Application Form and Quotation 1 of [COMPANY] related. There is a mention in both to erecting scaffolding to roof height, which did not appear necessary to remedy the leak in Flat 3. In the Notice of Intention dated 12 February 2024 other works are described which are at roof level and there is a reference in the email of 9 October 2024 to 2 balconies which are leaking and may be a contributing factor to the ingress of water into Flat 3. Notwithstanding this lack of evidential clarity, the Tribunal found that all the work that was carried out was part of a set of works which had been the subject of a section 20 consultation procedure to which the [NAME] had been invited to make nominations for contractors and observations.

39. In addition, the cost of the works carried out by [COMPANY] for which dispensation is sought is £38,956.98 including VAT. This was submitted as being cheaper than the costs estimated by [NAME] and [NAME]. However, the Statement of Estimates dated 13 September 2024 linked to the Notice of Intention dated 12 February 2024, which specified other works apart from those for Flat 3, stated costs of £29,448.00 and £30,455.00 respectively. The Tribunal is only concerned with dispensation and not with the reasonableness of the costs and the point is only mentioned because one of the reasons submitted by the Applicant for granting dispensation was that [APPELLANT] was cheaper than [NAME] and [NAME]. Whatever the breakdown of costs, the [NAME] have an opportunity to seek clarification and if dissatisfied may challenge them under section 27A of the Landlord and Tenant Act 1985.

40. Having taken into account the necessity and urgency of the work and the section 20 consultation procedure that had been undertaken and the opportunity for making representations under the dispensation procedure the Tribunal found

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that the [NAME] had not be prejudiced by the failure to re-consult on the works undertaken by [COMPANY].

Determination

41. In making its decision the Tribunal had regard to the decision of the Supreme Court in [COMPANY] v [NAME] and others [2013] UKSC 14. In summary, the Supreme Court noted the following:

1) The main question for the Tribunal is whether the landlord’s breach of the section 20 consultation requirements resulted in the [NAME] suffering real prejudice.

2) The financial consequence to the landlord of not granting a dispensation is not a relevant factor.

3) The nature of the landlord is not a relevant factor.

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

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

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

7) 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.

8) The Supreme 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 unreasonable costs for work or services or which fell below a reasonable standard, in other words whether the non—compliance has in that sense caused prejudice to the tenant.

9) 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.

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

42. The Tribunal is satisfied that it is reasonable to dispense with compliance with the consultation requirements of Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) in respect of the works carried out by [COMPANY].

43. The [NAME] should note that this is not an application to determine the reasonableness of the works or their cost. If, when the service charge demands in respect of these works are sent out, any [NAME] objects to the cost or the reasonableness of the work or the way it was undertaken, an application can be made to this Tribunal under section 27A of the Act. A landlord can also seek a determination as to the reasonableness of the cost of the work.

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44. The Applicant shall serve a copy of the Tribunal’s decision on dispensation, together with the relevant appeal rights attached, to all [NAME].

Judge JR Morris

Annex 1 – Right of Appeal

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.

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

3. If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed despite not being within the time limit.

4. The application 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 making the application is seeking.

Annex 2 – The Law

1. Section 20 of the Landlord and Tenant Act 1985 limits the relevant service charge contribution of tenants unless the prescribed consultation requirements have been complied with or dispensed with under section 20ZA. The requirements are set out in The Service Charges (Consultation Requirements) (England) Regulations 2003. Section 20 applies to qualifying works if the relevant costs incurred in carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.

2. The consultation provisions appropriate to the present case are set out in Schedule 4 Part 2 to the Service Charges (Consultation etc) (England) Regulations 2003 (SI 2003/1987) (the 2003 Regulations). The Procedure of the Regulations and are summarised as being in 4 stages as follows:

A Notice of Intention to carry out qualifying works must be served on all the tenants. The Notice must describe the works and give an opportunity for tenants to view the schedule of works to be carried out and invite observations to be made and the nomination of contractors with a time limit for responding of no less than

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30 days. (Referred to in the 2003 Regulations as the “relevant period” and defined in Regulation 2.)

Estimates must be obtained from contractors identified by the landlord (if these have not already been obtained) and any contractors nominated by the Tenants.

A Notice of the Landlord’s Proposals must be served on all tenants to whom an opportunity is given to view the estimates for the works to be carried out. At least two estimates must be set out in the Proposal and an invitation must be made to the tenants to make observations with a time limit of no less than 30 days. (Also referred to as the “relevant period” and defined in Regulation 2.) This is for tenants to check that the works to be carried out are permitted under the Lease, conform to the schedule of works, are appropriately guaranteed, are likely to be best value (not necessarily the cheapest) and so on.

A Notice of Works must be given if the contractor to be employed is not a nominated contractor or is not the lowest estimate submitted. The Landlord must within 21 days of entering into the contract give notice in writing to each tenant giving the reasons for awarding the contract and, where the tenants made observations, to summarise those observations and set out the Landlord’s response to them.

3. Section 20ZA allows a Landlord to seek dispensation from these requirements, as follows –

(1) 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.

(2) In section 20 and this section— "qualifying works" means works on a building or any other premises, and "qualifying long term agreement" means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a [NAME], for a term of more than twelve months.

(3) The Secretary of State may by regulations provide that an agreement is not a qualifying long-term agreement— if it is an agreement of a description prescribed by the regulations, or in any circumstances so prescribed.