Management Company Granted Dispensation for Dry Rot Works

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AY/LDC/2019/0202 Property : 6 [ADDRESS] [POSTCODE] Applicant : [redacted] : [NAME] Respondents : [redacted] application Type of application : To dispense with the requirement to consult [NAME] about major works Tribunal : Judge [NAME] of decision : 27th January 2020

DECISION

The Tribunal has determined that the Applicant shall be granted dispensation from the statutory consultation requirements for works to address dry rot.

Reasons

1. The Applicant is the management company for the subject property, the right to manage having been exercised about 2½ years ago. [NAME] are their managing agents. The Respondents are the [NAME] of the 7 flats, although 4 of them (the [NAME] of Flats 1, 2, 4 & 7) are also directors of the RTM company.

2. In November 2018 dry rot was discovered in the basement flat, Flat 1. All the [NAME] agreed in writing to waive the statutory consultation requirements of section 20 of the Landlord and Tenant Act 1985 and the Service Charges

2 (Consultation Requirements) (England) Regulations 2003 in order to allow the issue to be addressed urgently.

3. For reasons which are not apparent, the work did not actually start until August 2019, at which point it was found that the dry rot was more extensive than expected and the funds collected to date from the [NAME] were insufficient to cover the additional work. On this occasion, 2 of the [NAME] did not respond to the request to waive the consultation requirements and so the Applicant decided to seek dispensation from compliance under section 20ZA of the Act.

4. On or about 12th November 2019, the Applicant applied for dispensation. The Tribunal then made directions on 26th November 2019. The directions required the Applicant to provide all [NAME] with their application and the directions and they confirmed they had done so by email dated 3rd December 2019.

5. The directions further required any lessee who opposed the application to complete a reply form and send a statement of their case. No lessee responded.

6. The Tribunal was provided with the lease for one of the flats which, it is assumed, is standard. Under the lease, the Applicant is obliged to maintain the property and the [NAME] are obliged to pay a proportionate share of the costs incurred.

7. In accordance with the Supreme Court’s decision in [COMPANY] v Benson [2013] 1 WLR 854, the primary issue when considering dispensation is whether any lessee would suffer any financial prejudice as a result of the lack of compliance with the full consultation process.

8. There was clearly a significant issue which needed to be addressed. It is telling that none of the [NAME] have sought to respond to the Tribunal application. As pointed out in paragraph (2) of the directions order, whether the resulting service charges are reasonable or payable is a separate issue from that being considered in this decision.

9. The dry rot was identified over a year ago and its more extensive state over 4 months ago. On that timescale, it is somewhat surprising that [NAME] have not been able to comply with the statutory requirements by now. If any lessee had challenged the application, this apparent delay would have to have been considered. However, given the lack of objection or any proven prejudice, the Tribunal is satisfied that it is reasonable to dispense with the statutory consultation requirements.

Name: NK Nicol Date: 27th January 2020