Landlord Granted Dispensation for Urgent Heating and Hot Water Repairs

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AN/LDC/2025/0720 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : [NAME_2], [COMPANY_15] Respondent : [redacted] Representative : [NAME_3] of application : An application for dispensation from the consultation requirements of s.20 Landlord and Tenant Act 1985 Tribunal members : Judge D [NAME_5] (Hons), MSc Venue : 10 [ADDRESS] [POSTCODE] Date of video hearing : 17 October 2o25 Date of decision : 20 October 2025

DECISION

2 Decisions of the tribunal 1. The Tribunal grants the Applicant retrospective dispensation from the statutory consultation requirements in respect of remedial heating and hot water works completed in [ADDRESS] [POSTCODE]

Background to the application 1. The applicant landlord seeks retrospective dispensation under section 20ZA of the Landlord and Tenant Act 1985 (“the 1985 Act”) from the consultation requirements imposed on the landlord by section 20 of the 1985 Act in respect of remedial works to remedy heating and hot water issues. Those works were completed in February 2024 at a cost of £23,221.22.

2. Further to reports of problems with heating and hot water in the building, the Applicant instructed the site repair contractor, [NAME_6], to inspect the heating and hot water systems. The inspection took place and the contractor advised it was a wider issue and a specialist BMS engineer was required.

3. On 06/10/2023 the Applicant instructed [NAME_7], BMS engineer, to investigate the issue. The contractor advised that an urgent overhaul of the heat system was required to restore the hot water. The works included boiler parts replacements and testing, safety valve replacement, dirt separator air functionality checks on the BMS system, gas leak checks, plant room cleaning and associated works inside each flat.

4. On 15/12/2023 the Applicant informed the leaseholders that there were no feasible temporary solutions and on 21/12/2023 the works commenced.

5. The application asserts that the works were urgent because the development had no heating or hot water in the middle of winter. Due to Health and safety concerns for the more vulnerable residents, the situation was deemed urgent and the Applicant appointed [NAME_7] to carry out the remedial works.

6. A Notice of Intention to carry out an “urgent overhaul of the heat system onsite and associated repairs” was sent to the respondent leaseholders on 09/11/2023 and two quotations were obtained. The Applicant chose the cheaper quotation provided by [NAME_7].

7. Mackenzie House (“the building”) is a 6 storey block (including ground and basement) comprising 30 residential apartments. The building is of recent construction, circa 10 years old.

3 8. The lease is a modern type with reference to recovery of cost for providing heat energy to the common parts only [Schedule 7][377].

9. It would seem the apartments are heated by Heat interface Units (“HIUs”) within each apartment. HIU’s are of similar size as gas fired combi boilers but do not need a gas supply or a flue to discharge combustion gasses. The HIU’s incorporate a plate heat exchanger to allow heat from the central boiler circuit to be conveyed to each apartment as and when required. The HIU’s generate heating for radiators or similar and domestic hot water for showers, sinks etc. The apartment HIU circuit and the central circuit are physically separate. Ie: there are two / multiple distinct water circuits.

10. The individual leaseholders are responsible for maintenance and servicing of the HIU’s. The only required Landlord access to the HIU’s would be to check and read the metering and to ensure the central distribution side of heat exchanger was not fouled or blocked.

11. The HIU’s are provided with a heat meter to record the energy consumed in kilo Watt hours (kWh). These are read monthly and then bills received on a per kWh use basis. The Tribunal have not seen anything to confirm this was the intended method of heating and associated billing charges etc. The Respondent representative confirmed that heating bills were at one time received from “[NAME_8]” but after a change to the new managing agent ”[NAME_9]”, the billing ceased some 2.5 years ago. A new heating provider was mentioned as “[NAME_10]” which the Applicant confirmed is a company that is part of the “[NAME_9]” group.

12. The Respondents’ concern is that this repair of central boilers could be duplicate cost if “[NAME_10]” company decide to issue backlog bills for heating. In normal arrangements like this the heating provider would include a standing charge to all connected consumers (30 apartments in this case) to cover the servicing etc of the main plant and equipment. The gas consumed in generating heat would also be off-set by the monthly metered charges. The Applicant could not provide information on this and could not provide information as to why the Respondents had not been billed gas for the heating and hot water for 2.5 years.

13. The tribunal notes that there are no costs incorporated into the service charge for gas or water consumption.

14. The Tribunal did not inspect the building as it considered the documentation and information provided was sufficient for the Tribunal.

15. The leaseholders oppose this dispensation application on the basis that the Applicants purchased the building at a time when there were already heating and hot water issues, that the Applicant should have had regard to these long standing problems and should have acted promptly upon

4 taking ownership of the building. It is submitted by the Respondents that the delay in dealing with the communal boiler exacerbated the problems and resulted in the works costing more than they should have.

16. The Respondents also submit that the Applicant admitted in correspondence to them that they would not be liable for the costs of the remedial works to the boiler, and further they complain that no details of the charges for the boiler were provided because the Applicant took £28,000 from the [NAME_11] without notifying the Leaseholders that they were going to do this, or providing a breakdown of what that £28,000 covered.

17. The Respondents accept that the works were necessary because they needed heating and hot water, but feel they have been prejudiced financially by the increased cost of these works having been caused by the lack of adequate maintenance by the Applicant. The hearing 18. Directions were issued on 06/06/2025. On 23/07/2025 the Applicant applied for the matter to be determined at a video hearing and the Directions were amended on 25/07/2025 accordingly.

19. On 11/08/2025 the Applicant’s provided an amended bundle in accordance with further amended Directions.

20. On 14/10/2025 the Applicant submitted to the Tribunal late evidence in the form of four witness statements from [NAME_2], [NAME_12], [NAME_13] and [NAME_14]. The contents of these 4 statements are almost identical and contain 4 paragraphs stating that they are employed by [COMPANY_15] (“[NAME_9]”); that they make the statement from their personal knowledge, from information in their records and from information provided by colleagues; that they believe the facts stated in the Applicant’s statement of case of 28/07/2024 are true, and that they believe the facts and documents included in the Applicant’s case are true.

21. On 17/10/2025 the Tribunal received a document purporting to be a statement from [NAME_16] dated 15/08/2025 on behalf of the Respondents. Mr [NAME_16] reported that he was a qualified engineer who had at some time worked on the communal boiler in the building.

22. At the hearing today the Applicant was represented by [NAME_2], Senior Property Services Advisor from [NAME_9] and was accompanied by [NAME_12], Property Services Advisor, [NAME_13], Associate Direction (Property), [NAME_17] and [NAME_14], Property Manager for the building. The Respondent leaseholders were represented by [NAME_3], one of the

5 Respondent leaseholders. None of the other leaseholders attended the hearing. Preliminary issues The late witness evidence from the Applicant 23. It was unclear why witness statements with no evidence had been submitted late and why there was no application for relief from sanctions. [NAME_2] apologised and explained that they had submitted these generic statements so that the witnesses would be permitted to provide additional unspecified oral evidence.

24. Given that there is no substantive evidence in the late witness statements to rely upon, and given that there is no application for relief from sanction, permission to rely on these statements at the hearing is denied. The late witness evidence from the Respondent 25. Although the document purporting to be a witness statement from [NAME_16] states that he is an engineer, it does not provide his qualifications, the company he works for, the company who instructed him to carry out works, is not on headed paper and with no statement of truth, it is not a proper witness statement. Nor is there an application for relief from sanctions. Mr [NAME_16] was not present at the hearing. For all those reasons, permission to rely on this document at the hearing is denied. The evidence 26. At the beginning of the hearing the Tribunal confirmed that they were relying on a bundle provided by the Applicant of 343 documents. No objection was made. However, after several short adjournments for [NAME_2] for technical issues with his computer, it transpired that the Applicant was relying on a different bundle which they had submitted on 11/08/2025. Unfortunately, that alternative bundle was not before the Tribunal, and there was therefore a further adjournment for that bundle to be submitted. The bundle relied upon by the Applicant is 402 pages. Any reference to a document will appear in this decision with the page number in square brackets.

27. In his representations to the Tribunal, [NAME_2] explained that the although Schedule 7 of the lease permits the Applicants only to recharge expenses relating to the retained areas, they have a separate agreement between the applicant and the respondent leaseholders to recover the cost of hearing. That agreement was not before the Tribunal. It is submitted that the terms of the lease require the Applicant to maintain the communal boilers and to recharge the cost to the leaseholder

6 respondents. In response [NAME_3] explained that the provider of the heating is supposed to bill the leaseholders but that they have not had a bill for some 2.5 years. 28. [NAME_2] confirmed that until they took over the management of the building an energy company, [NAME_8], provided the billing for heating and hot water to the individual leaseholders. When [NAME_9] took over as managing agents the agreement with Welcome was terminated, and the gas supply and billing was assigned to a company called [NAME_10]. [NAME_2] confirmed that [NAME_10] is a company which is part of the [COMPANY_15]. He could not explain why there had been no billing to leaseholders for 2.5 years.

29. The Tribunal were particularly interested in this aspect of billing because if the supplier of energy was responsible for the cost of the heating and hot water repairs, that may be relevant to the leaseholders. That issue could not be resolved as [NAME_2] was unable to explain why there had been no billing to the leaseholders for 2.5 years. His view was that this was not relevant to this dispensation application. However, the lack of clarification leaves a doubt as to whether there could be a duplicate cost if [NAME_10] decide to issue backlog bills for heating. The heating provider would normally include a standing charge to all connected consumers (30 apartments in this case) to cover the servicing etc of the main plant and equipment. The gas consumed in generating heat may also be off-set by monthly metered charges.

30. None of the attendees to the hearing from [NAME_9] were experts on the heating and could not clarify these issues. 31. [NAME_2] took the Tribunal to various pages in the bundle which confirmed that there had been difficulties with the provision of heating and hot water, that there had been no alternative but to instruct contractors to carry out remedial works without proper s.20 consultation. That would have caused delay leaving the leaseholders without heating and hot water. [NAME_3] for the leaseholders accepted that the repairs had been necessary and urgent because the occupants of the building could not manage without heating and hot water. However, he submits that it was the lack of maintenance by the Applicant and the delay in dealing with the problems that had caused the severity of the problem and consequently the increased costs to remedy the problem. 32. [NAME_3] explained that when the Applicant purchased the freehold, the previous freeholder was already aware of heating and hot water issues. The Respondents position is that the Applicant was on notice of the problems at the time of purchase around 2021 and they did nothing at that time.

33. Both parties agree that there had been 1150 records of faults to the system prior to the repair works having been carried out.

7 34. [NAME_3] further referred the Tribunal to an email dated 16/08/2021 from [NAME_9] in which it states “I completely agree with you, irrespective if the cracks are small, they need to be dealt with to ensure a larger issue doesn’t occur in the Future. Along with the other issues where costs should be covered by the developer and not Leaseholders via the service charge” [Annex V of the 343 page bundle]. 35. [NAME_2] states that that email does not reflect an accurate position, and that email was written without all the relevant facts. Indeed, [NAME_2] sought to suggest that the leaseholders contributed to the problems with the communal boiler because not one of the 30 flats had correctly serviced the HIU in their individual flats. There was no evidence to support this suggestion.

36. In relation to prejudice, the Respondents have not provided any evidence in this regard, other than their claim of financial prejudice due to increased cost of works due to alleged neglected maintenance by the Applicant. They confirm they do not know whether the cost of £23,221.22 was good value or not as they had not carried out any investigations, and make no submissions as to what they would have done had the s.20 Consultation process had been correctly carried out. Reasons for the tribunal’s decision 37. The only issue for the Tribunal to decide is whether or not it is reasonable to dispense with the statutory consultation requirements. This application does not concern the issue of whether or not service charges will be reasonable or payable.

38. Having considered all the evidence and noted that no evidence has been provided as to the prejudice suffered by the leaseholders due to lack of proper s.20 consultation, the Tribunal determines the dispensation issues as follows.

39. Section 20 of the Landlord and Tenant Act 1985 (as amended) and the Service Charges (Consultation Requirements) (England) Regulations 2003 require a landlord planning to undertake major works, where a leaseholder will be required to contribute over £250 towards those works, to consult the leaseholders in a specified form.

40. Should a landlord not comply with the correct consultation procedure, it is possible to obtain dispensation from compliance with these requirements by such an application as is this one before the Tribunal. Essentially the Tribunal must be satisfied that it is reasonable to do so.

41. The leading authority in relation to s.20ZA dispensation requests is Daejan Investments Ltd v Benson [2013] 1 WLR 854 (“Benson”) in which the Supreme Court set out guidance as to the approach to be taken

8 by a tribunal when considering such applications. This was to focus on the extent, if any, to which the lessees were prejudiced in either paying for inappropriate works or paying more than would be appropriate, because of the failure of the landlord to comply with the consultation requirements. In his judgment, Lord Neuberger said as follows;

44. Given that the purpose of the Requirements is to ensure that the tenants are protected from (i) paying for inappropriate works or (ii) paying more than would be appropriate, it seems to me that the issue on which the LVT should focus when entertaining an application by a landlord under section 20ZA(1) must be the extent, if any, to which the tenants were prejudiced in either respect by the failure of the landlord to comply with the Requirements.

45. Thus, in a case where it was common ground that the extent, quality and cost of the works were in no way affected by the landlord’s failure to comply with the Requirements, 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 – ie as if the Requirements had been complied with.

42.

Accordingly, the Tribunal had to consider whether there was any prejudice that may have arisen out of the conduct of the Applicant and whether it was reasonable for the Tribunal to grant dispensation following the guidance set out above.

43. The Tribunal is of the view that the issue of whether the works were more expensive because of lack of proper maintenance by the Applicant is not an issue for this dispensation application but an argument in relation to reasonableness and payability under s.27A Landlord and Tenant Act 1985. There are further questions over the billing arrangement that has failed or stopped for unknown reasons and what those billing arrangements are in relation to repairs. However, as stated above, the issue of payability or reasonableness for the works is not the subject of this application.

44. The Tribunal found that the urgent repairs to the heating and hot water were required, and could not find prejudice to Respondents who had provided no evidence as to prejudice due to the failure to properly consult under s.20.

45. As stated above, the only issue for the Tribunal to decide is whether or not it is reasonable to dispense with the statutory consultation

9 requirements. This application does not concern the issue of whether or not service charges will be reasonable or payable.

46. The Tribunal grants the Applicant retrospective dispensation from the statutory consultation requirements in respect of remedial works to the heating and hot water system at [ADDRESS] [POSTCODE].

47. The Applicant is directed to serve this decision on all the leaseholders of the flats in the building. Name: Judge D Brandler Date: 20 October 2025

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. 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. 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. 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. 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. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).