Management Company Allowed to Carry Out Urgent Roof Repairs Without Consulting Lessees

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/29UQ/LDC/2020/0033

Property

:

[APPELLANT], [ADDRESS] [POSTCODE]

Applicant: [redacted]

:

[COUNSEL]

Respondent: [redacted]

[COMPANY] lessees

Representative

:

Type of Application

:

To dispense with the requirement to consult lessees about major works

Tribunal Member(s)

:

Judge J Dobson

Date of Directions

:

9th July 2020

DECISION

2 Decision

1. The Applicant is granted dispensation under Section 20ZA of the Landlord and Tenant Act 1985 from the consultation requirements imposed on the landlord by Section 20 of the 1985 Act in respect of major works to the roof of the block of flats. The Tribunal has made no determination on whether the costs of the works are reasonable or payable.

The application and the history of the case

2. The Applicant applied for dispensation under Section 20ZA of the Landlord and Tenant Act 1985 from the consultation requirements imposed on the landlord by Section 20 of the 1985 Act in respect of the Respondent.

3. The Tribunal gave Directions on 15th May 2020, varied on 28th May 2020, explaining that the only issue for the Tribunal is whether or not it is reasonable to dispense with the statutory consultation requirements and is not the question of whether any service charge costs are reasonable or payable. The Directions Order listed the steps to be taken by the parties in preparation for the determination of the dispute, if any.

4. The Directions stated that the Tribunal would proceed by way of paper determination without a hearing pursuant to of the Tribunal Procedure Rules 2013, unless either party objected. Neither party has subsequently objected and requested an oral hearing. The Tribunal has accordingly proceeded by way of a paper determination.

5. This is the decision made following that paper determination.

The Law

6. Section 20 of the Landlord and Tenant Act 1985 (“the Act”) and the Regulations made pursuant to the Act provide that where the lessor undertakes qualifying works with a cost of more than £250 per lease the relevant contribution of each [NAME] (jointly where more than one under any given lease) will be limited to that sum unless the required consultations have been undertaken or the requirement has been dispensed with by the Tribunal. An application may be made in advance or retrospectively.

7. Section 20ZA provides that on an application for a determination to dispense with any or all of the consultation requirements, the Tribunal may make a determination granting such dispensation pursuant to section 20ZA of the Act “if satisfied that it is reasonable to dispense with the requirements”.

8. The appropriate approach to be taken by the Tribunal in the exercise of its discretion was considered by the Supreme Court in the case of [COMPANY] v [NAME] et al [2013] UKSC 14.

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9. The leading judgment of Lord [NAME] explained that a tribunal should focus on the question of whether the [NAME] will be or had been prejudiced in either paying where that was not appropriate or in paying more than appropriate because the failure of the lessor to comply with the regulations. The requirements were held to give practical effect to those two objectives and were “a means to an end, not an end in themselves”.

10. The factual burden of demonstrating prejudice falls on the [NAME]. The [NAME] must identify what would have been said if able to engage in a consultation process. If the [NAME] advances a credible case for having been prejudiced, the lessor must rebut it. The Tribunal should be sympathetic to the [NAME](s).

11. Where the extent, quality and cost of the works were in no way affected by the lessor’s failure to comply, Lord [NAME] said as follows:

“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.”

12. If dispensation is granted, that may be on terms.

13. The “main, indeed normally, the sole question”, as described by Lord [NAME], for the Tribunal to determine is therefore whether or not the [NAME] will be or has been caused relevant prejudice by a failure of the Applicant to undertake the consultation prior to the major works and so whether dispensation from consultation in respect of that should be granted.

14. The question is one of the reasonableness of dispensing with the process of consultation provided for in the Act, not one of the reasonableness of the charges of works arising or which have arisen.

15. The effect of [NAME] has very recently been considered by the Upper Tribunal in [NAME] v [NAME] and Others [2020] UKUT 177 (LC), a decision published only a few days ago, although that decision primarily dealt with the imposition of conditions when granting dispensation and that the ability of lessees to challenge the reasonableness of service charges claimed was not an answer to an argument of prejudice arising from a failure to consult.

Consideration

16. The Applicant explained in the application that it is the management company for the building and, the Tribunal notes, is a party to the tripartite leases of the flats within the building. The Applicant is responsible for repairs and the collection of service charges from the Respondents, both the lessees and, to the extent provided for, the lessor

4 pursuant to the provisions of the Lease. The relevant provisions are contained in clause 3 and in the Sixth and Seventh Schedules.

17. The Applicant states that the roof to the building is leaking and that damage is being caused to some of the flats. The Applicant considers that the roof requires work with urgency. The Applicant further explains that the installation of the roof is somewhat unusual and that the Applicant considers that instructing a particular contractor with previous experience of the roof is appropriate.

18. The Respondents who responded, all lessees, have stated that they do not wish to oppose the application. None of the Respondents assert any prejudice will be caused to them. The majority of the lessees have not responded at all. The Tribunal finds that nothing different would be done or achieved.

19. Accordingly, the Tribunal finds that the Respondents have not suffered any prejudice by the failure of the Applicant to follow the consultation process.

20. The Tribunal consequently finds that it is reasonable to dispense with all of the formal consultation requirements in respect of the major works to the roof of the building.

21. This decision is confined to determination of the issue of dispensation from the consultation requirements in respect of the qualifying long- term agreement. The Tribunal has made no determination on whether the costs are reasonable or payable. If a leaseholder wishes to challenge the reasonableness of those costs, then a separate application under section 27A of the Landlord and Tenant Act 1968 would have to be made.

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RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office which has been dealing with the case.

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

3. If the person wishing to appeal does not comply with the 28- day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28- day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.