Leeds City Council Granted Dispensation from Consultation Requirements

OUTCOME: Allowed

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : MAN/00DA/LDC/2023/0022

Property : Approx. 2557 properties in the City of Leeds

Applicants : [redacted]

Respondent: [redacted] section 20ZA Landlord & Tenant Act 1985

Tribunal Members : (Judge) [NAME]

[NAME] (Valuer Member)

Date : 09 February 2024

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DECISION AND REASONS

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Decision 1. The Tribunal grants dispensation from the consultation requirements of section 20 of the Landlord and Tenant Act 1985 under section 20ZA of that Act in respect to the qualifying long-term agreement for the provision of buildings insurance entered into with [NAME] ([NAME]) on the 01 April 2023. The Application 2. The Applicant is a local authority charged with the management and insurance of some 2557 flats within the region. The application relates to a qualifying long-term agreement for the purpose of insuring those premises from the 01 April 2023.

3. On the 11 August 2022, the Applicant gave a notice of intention, pursuant to paragraph 1 to schedule 2 of the Service Charges (Consultation etc)(England) Regulations 2003 to all [RESPONDENT] that it intended to enter into a 5 year agreement for buildings insurance for each of the leasehold properties the subject of this application. That schedule is applicable in circumstances where public notice as defined in regulation 2 of the Regulations is required but subsequently the Applicant utilised what is known as the [NAME] [NAME] ([NAME] [NAME]) which was set up under regulation 34 of the Public Contracts Regulations 2015. The application informs the Tribunal that this approach “required the publication of a call for competition to make known the [NAME]’s intention to establish this [NAME] for all classes of insurance products, and to give all potential insurers time to respond. Every insurer who met the (self-certified) selection criteria and were not excluded, were entitled to be admitted to each of the insurance classes on the [NAME] [NAME] they sought admission to. The [NAME] was not permitted to impose any limits on the number of insurers that could join, in addition (As in any [NAME]) it was open to any other insurer to apply to join the [NAME] [NAME] at any later time.” 4. The Applicant contends that this approach performs a similar function as that of putting together a list of contractors and fulfils what it describes as an open and transparent call for competition. The Applicant further contends that it chose to make use of the [NAME] through its insurance brokers, [COMPANY] and that insurers were thereafter invited to bid for the proposed long-term contract for buildings insurance to the leasehold housing stock. The tender closed on the 16 December 2022 with two bids, one from the existing long- term provider, [COMPANY] and the other was from [NAME]. Avid later withdrew from the process leaving only [NAME].

5. The Applicant submits to the Tribunal that the lack of any other bid reflects the current state of the insurance market post Grenfell and the subsequent withdrawal of large providers from the social housing

sector and further contends that any other possible contender for the contract would already be part of the [NAME] [NAME] and accordingly there was no other pool from which insurance provision might be secured outside of the [NAME].

6. On the 27 February 2023, the Applicant gave a Notice of Intention under Schedule 1 to the 2003 Regulations, to all Respondents, that a single proposal had been received and that it was intended to enter into an agreement with [NAME] for the provision of buildings insurance.

7. The Applicant seeks dispensation from the requirement under schedule 1 paragraph 1, (a) to give [RESPONDENT] the opportunity to propose the name of a person from whom the Applicant should seek an estimate in respect of the buildings insurance; and (b) the requirement in schedule 1 paragraph 5 to prepare at least two proposals in respect of the relevant matter. Reasons 8. A copy of the application was sent to each respondent and the Tribunal received 4 responses none of which raise any material objection to the proposal. The liability for insurance costs as part of their lease terms for each of these respondents ranges from £86.66 through to £144.36. Whilst the Tribunal considered each of these 4 responses, none of them amounted to any material reason why dispensation ought not to be granted.

9. Neither the Applicant nor any of the Respondents asked for a hearing of this application and having considered rule 31 of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013, we decided that we could and should make a decision without holding a hearing.

10. In its submissions to the Tribunal, the Applicant rightly draws our attention to the approach we must take to considering whether to grant dispensation under section 20ZA(1) of the Landlord and Tenant Act 1985 and our attention is specifically drawn to the decision of the Supreme Court in [COMPANY] v Benson and others [2013] UKSC 14 and the important question of prejudice when assessing the reasonableness of making such a determination.

11.

In all the circumstances of this application we are satisfied that it is reasonable to grant dispensation and that there has been no prejudice to any of the Applicants by reason of the failure by the Applicant to comply with the consultation requirements set out in section 20 of the Landlord and Tenant Act 1985 and the Regulations referred to above.

12. This is ostensibly for the same reasons as set out by the Applicant in its application and in the submissions to the Tribunal dated 17 October 2023. We are satisfied that the notice under paragraph 1 schedule 2 was sufficient to alert the Respondents to the intention to enter into a

qualifying long-term agreement and although it did not invite the Respondents to provide alternative persons for obtaining a quote, we are satisfied that this would have been of little benefit to the Respondents as there is in reality no alternative providers for the reasons set out by the Applicant. Secondly, the fact that there was only one quote is in effect indicative of the matters mentioned above that the current market for [NAME] is significantly limited. The Applicant tried to obtain more than one quote from the [NAME] but failed to do so. We accept also that any alternative provider would already be part of the [NAME].

13. It seems to us that as a result, there has been no prejudice to any of the respondents in the Applicant’s failure to secure proposals from the [RESPONDENT] and no prejudice in the Applicant’s inability to secure more than one quote.

14. In those circumstances dispensation is granted. [NAME] (Tribunal Judge)