Southwark Council Granted Unconditional Dispensation for Fire Safety Works

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : LON/OOBE/LSD/2021/0197 Property : [NAME]

Applicant : [redacted]

Respondents : [redacted] requirements pursuant to section 20ZA Landlord & Tenant Act 1985

Tribunal Members : Judge Shepherd and [NAME] of Decision : March 2022

Decision The Applicants are given unconditional dispensation from the consultation requirements contained in s.20 Landlord and Tenant Act 1985.

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Reasons

1. In this case the Applicant, The London Borough of [NAME] (“the Applicant”) seeks dispensation from the consultation requirements contained in section 20 of the Landlord and Tenant Act 1985 (“ The Act”). The application is brought pursuant to section 20ZA of the Act. The application was opposed by a number of [NAME] at the [NAME] (hereafter referred to as [NAME]). At the hearing the applicants were represented by [NAME] and the [NAME] were represented by [NAME] (“[NAME]”).

2. [NAME] consists of an estate where 176 [NAME] reside. There are five residential mansion blocks situated along the south side of Tooley St in Bermondsey.

3. The application included qualifying works under a long - term agreement. The works included the design installation and commissioning of an automatic fire alarm and detection system to all communal areas and rooms greater than one square metre leading onto fire exits, main fire exits and hallways of each individual dwelling and all associated works in accordance with the requirements for the fire detection and alarm systems.

4. The works began on the 15th of September 2020. Although notice of intention was sent the consultation was not completed because the Applicants said that the work was urgent.

5. The Applicants say that following fire risk assessments of the blocks in [NAME] it became clear that the “stay put” policy was not suitable for the blocks as there was no appropriate fire resistant construction between the flats vertically. A fire alarm system was required in order to give residents an early

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warning should a fire occur in a neighbouring flat or a landlord related area in order that residents, visitors and all those working within the buildings could escape in a timely and safe manner.

6. Pausing here, in the application the following statement was made:

The whole of section 20 was repealed in the Commonhold and Leasehold Reform Act 2002 and replicated by the requirements of section 151 of that act. There is nothing within section 151 which states that work cannot begin prior to this statutory consultation being completed. This is a technical point, and under challenge from [NAME] we are seeking dispensation for this point.

7. The Tribunal has seen this statement on other dispensation applications made by the London Borough of [NAME]. The statement is fundamentally defective and should be removed from future applications made by the borough. Mr. [NAME] accepted this point and told the Tribunal that he would revert back to the borough to inform them that the statement was wrong. There has been no change in the consultation requirements which must be carried out before qualifying work is carried out unless dispensation is obtained.

8. As well as challenging the dispensation the [NAME] challenged the quality of the work carried out. The Tribunal did not carry out an inspection of the fire safety works but the photographs provided gave compelling evidence which suggested that the quality of the work was at best poor. It appears that the fire safety equipment has been installed in areas where the plaster and internal structure of the building is in fundamental disrepair. The Tribunal is not however deciding any issues in relation to payment as regards section 27A of the Act and [NAME] are still entitled to challenge the quality of the work within that jurisdiction. In the present case the sole question was whether dispensation should be granted

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The law

9. Landlord and Tenant Act 1985,s.20ZA

20ZA Consultation requirements: supplementary

(1)   Where an application is made to [the appropriate 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 superior landlord, 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—

(a)  if it is an agreement of a description prescribed by the regulations, or

(b)  in any circumstances so prescribed.

(4)  In section 20 and this section “the consultation requirements”  means requirements prescribed by regulations made by the Secretary of State.

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(5)  Regulations under subsection (4) may in particular include provision requiring the landlord—

(a)  to provide details of proposed works or agreements to tenants or the recognised tenants' association representing them,

(b)  to obtain estimates for proposed works or agreements,

(c)  to invite tenants or the recognised tenants' association to propose the names of persons from whom the landlord should try to obtain other estimates,

(d)  to have regard to observations made by tenants or the recognised tenants' association in relation to proposed works or agreements and estimates, and

(e)  to give reasons in prescribed circumstances for carrying out works or entering into agreements.

(6)  Regulations under section 20 or this section—

(a)  may make provision generally or only in relation to specific cases, and

(b)  may make different provision for different purposes.

(7)  Regulations under section 20 or this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Daejan 10. In Daejan Investments v Benson [2013] UKSC 14, the landlord was the freehold owner of a building comprised of shops and seven flats, five of which were held by the tenants under long leases which provided for the payment of service charges. The landlord gave the tenants notice of its intention to carry

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out major works to the building. It obtained four priced tenders for the work, each in excess of £400,000, but then proceeded to award the work to one of the tenderers without having given tenants a summary of the observations it had received in relation to the proposed works or having made the estimates available for inspection. The tenants applied to a leasehold valuation tribunal under section 27A of the Landlord and Tenant Act 1985  , as inserted, for a determination as to the amount of service charge which was payable, contending inter alia that the failure of the landlord to provide a summary of the observations or to make the estimates available for inspection was in breach of the statutory consultation requirements in paragraph 4(5) of Schedule 4 to the Service Charges (Consultation Requirements) (England) Regulations 2003 so as to limit recovery from the tenants to £250 per tenant, as specified in section 20 of the 1985 Act and regulation 6 of the 2003 Regulations in cases where a landlord had neither met, nor been exempted from, the statutory consultation requirements. The landlord applied to the tribunal under section 20(1) of the Act for an order that the paragraph 4(5) consultation requirements be dispensed with, and proposed a deduction of £50,000 from the cost of the works as compensation for any prejudice suffered by the tenants, which offer they refused. The tribunal held that the breach of the consultation requirements had caused significant prejudice to the tenants, that the proposed deduction did not alter the existence of that prejudice, and that it was not reasonable within section 20ZA(1) of the Act, as inserted, to dispense with the consultation requirements. The Upper Tribunal (Lands Chamber) dismissed the landlord's appeal and the Court of Appeal upheld the Upper Tribunal's decision.

11. The Supreme Court , allowing the appeal (Lord [NAME] of Craighead DPSC and [NAME] dissenting), held that the purpose of a landlord's obligation to consult tenants in advance of qualifying works, set out in the Landlord and Tenant Act 1985 (as amended) and the Service Charges (Consultation Requirements) (England) Regulations 2003 , was to ensure that tenants were protected from paying for inappropriate works or from paying more than would be appropriate; that adherence to those requirements was not an end in itself, nor was the dispensing jurisdiction under section 20ZA(1) of the 1985 Act a punitive or exemplary exercise; that, therefore, on a landlord's application for

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dispensation under section 20ZA(1) the question for the leasehold valuation tribunal was the extent, if any, to which the tenants had been prejudiced in either of those respects by the landlord's failure to comply; that neither the gravity of the landlord's failure to comply nor the degree of its culpability nor its nature nor the financial consequences for the landlord of failure to obtain dispensation was a relevant consideration for the tribunal; that the tribunal could grant a dispensation on such terms as it thought fit, provided that they were appropriate in their nature and effect, including terms as to costs; that the factual burden lay on the tenants to identify any prejudice which they claimed they would not have suffered had the consultation requirements been fully complied with but would suffer if an unconditional dispensation were granted; that once a credible case for prejudice had been shown the tribunal would look to the landlord to rebut it, failing which it should, in the absence of good reason to the contrary, require the landlord to reduce the amount claimed as service charges to compensate the tenants fully for that prejudice; and that, accordingly, since the landlord's offer had exceeded any possible prejudice which, on such evidence as had been before the tribunal, the tenants would have suffered were an unqualified dispensation to have been granted, the tribunal should have granted a dispensation on terms that the cost of the works be reduced by the amount of the offer and that the landlord pay the tenants' reasonable costs, and dispensation would now be granted on such terms. Per Lord [NAME] of Abbotsbury PSC, [NAME] of [NAME] and Lord [NAME]. (i) Where the extent, quality and cost of the works were unaffected by the landlord's failure to comply with the consultation requirements an unconditional dispensation should normally be granted (post, para 45). (ii) Any concern that a landlord could buy its way out of having failed to comply with the consultation requirements is answered by the significant disadvantages which it would face if it fails to comply with the requirements. The landlord would have to pay its own costs of an application to the leasehold valuation tribunal for a dispensation, to pay the tenants' reasonable costs in connection of investigating and challenging that application, and to accord the tenants a reduction to compensate fully for any relevant prejudice, knowing that the tribunal would adopt a sympathetic (albeit not unrealistically sympathetic) attitude to the tenants on that issue (post, para 73).

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The hearing

12. Mr. [NAME] made submissions on behalf of the Applicants. He brought the Tribunal’s attention to the fire risk assessments that had been carried out at [NAME] on 3rd September 2020. The summary for one of the blocks stated the following

This premises is currently undergoing emergency fire safety works needed to properly support the change in emergency strategy from stay put to full evacuation. The reason for the strategy change is owing to the construction type which is not capable of supporting a defend in place strategy typically associated with masonry concrete buildings. Following the FRA it was noted that a full fire alarm system to grade a 1D 4 had at some stage been installed in the communal areas of the stairways. The system however had been decommissioned and removed and a stay put policy communicated via fire action notices. Without question, the current strategy was and is not appropriate for [NAME]. The change to full evacuation in the event of fire has been made and this information communicated to the residents, TMO, fire service and [NAME] senior management. In order to facilitate this change it has been necessary to install a full fire alarm system in the communal areas with interlinked aspect in all flats (where possible). The system will be to BS 5839- Grade A: LD2 with interlinked heat detection in each flat that opens onto the communal escape route. The system will include a control and indicator panel at the main entrance for use by the fire service.

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In addition to the fire alarm system will be emergency lighting upgrades where needed (active fire safety) and additional elements such as a fire door on the hall landing to floors one and two (to mirror the existing door at Level 3 and 4) and the structural enhancement of the roof void escape. This is the passive fire safety measures needed to augment the fire alarm and to provide a safe escape route for all residents from their flats to a place of ultimate safety.

13. This summary was repeated virtually verbatim for each of the Fire Risk Assessments carried out in the various blocks at [NAME].

14. Mr [NAME] contention was that the [NAME] had not suffered prejudice in the sense identified in [NAME]. Observations had been invited and responded to. Any objections were outweighed by the fire risk assessment and accordingly dispensation should be given.

15. In response [NAME] made a number of clear arguments opposing the dispensation application.

16. Firstly, she challenged the section 20 compliance on the basis that the Applicants had delayed making an application for dispensation until some 10 months after the work had started. In addition she bemoaned the fact that the Applicants had not replied to clear questions from her about the works such that she was forced to make Freedom of Information requests in order to obtain any information at all. Pausing here, this is regrettable on any account. It is not in any way acceptable that a landlord has to be forced to provide information in this way by a Freedom of Information request. [NAME] need to realise that as a landlord they have duties to comply with requests for information from their [NAME]. The evidence in this case suggests that they have failed on many occasions in this regard. It was also extremely regrettable that [NAME] delayed applying for dispensation for such a long time. On one occasion [NAME] was

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told that dispensation was not required. This is patently incorrect as indicated earlier. Indeed, it appeared that it was only the threat of a forthcoming press article that forced [NAME] to make this application for dispensation.

17. The second point that [NAME] made was in relation to the question of emergency. The Applicants claimed that the work needed to be carried out urgently and this was why they started the work without carrying out consultation. [NAME] said that fire surveys had been carried out since 2013 and issues raised about the internal structure of the building. She took the tribunal to a number of documents confirming this. In 2017 the estate was described as safe. This was a short time after the Grenfell Tower fire. In essence [NAME] argued that between 2013 and 2020 nothing had changed. Contact with the fire brigade confirmed that they had not declared that the building was unsafe. [NAME] had already had effectively 10 years to consult with [NAME] but had failed to do so. Again, this is a regrettable state of affairs however the Tribunal considers that heightened concern following the Grenfell Fire and the aftermath caused [NAME] rightly to reassess the situation and this was the reason why they carried out the fire risk assessments and followed those assessments. The fact that the assessments post - dated the works being started did not negate their importance.

18. The Third Point raised by [NAME] was the quality of the installation. Previous fire alarms had been decommissioned not withstanding the fact that there were vulnerable people in situ. [NAME] raised the fact that there had been a change in specification of the installation being installed. She also challenged the positioning of the installation where there is a heat sensor in front of the door and one outside the door of the flat when the heat sensor should be in the kitchen nearest to the possible source of fire. The Tribunal repeats that the quality of the work is really the content of a section 27A application rather than a dispensation application and the [NAME] are at liberty to challenge the quality of the work when the landlord seeks to recover the costs.

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19. The fourth point raised by [NAME] was the question of disrepair she said that the walls in the blocks were in a poor state. There had been cracks in the walls for over 20 years and there had been no cyclical works since 1998. She said that [NAME] had reserves which they had sat on instead of carrying out essential works. The Tribunal was shown compelling photographs and a video of water flooding into one of the blocks through the heat sensors. Previous defunct alarms had not been removed. These matters regrettably fell outside the application being made by [NAME]. It is hoped however that some note is taken of the complaints by the [NAME] in relation to the disrepair within the premises. The Tribunal considers that the complaints are well founded and judging by the photographs of the blocks the work carried out appears to be of a poor quality.

20. In relation to prejudice [NAME] said that if a consultation had been carried out the [NAME] would have employed a specialist surveyor to carry out an inspection of the work. In essence she said that if a consultation exercise had been carried out it would have been a different outcome with different contractors and this may have led up to a 40% reduction in the cost of the work. Unfortunately she did not provide any expert evidence to support this argument in contrast to the case of [NAME] v Chapman [2021]HLR 38 where one survey report had been commissioned by [NAME] and another was planned to challenge the need for particular asphalting works. In the present case the works are complete albeit in the [NAME]’s view of a poor standard.

Determination

21. Reluctantly the tribunal has decided that dispensation must be given unconditionally. No real prejudice was demonstrated by the [NAME] in this case although they were clearly unhappy with the work carried out at [NAME] and this concern appeared to the Tribunal to be justified this does not affect the fact that the works appeared necessary particularly in light of the fire risk assessments. Local authorities are acutely aware of the need for fire

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safety following the Grenfell Tower fire and it is entirely right that they carry out risk assessments. It is regrettable however that [NAME] adopted a stance apparently under which they denied the need for consultation and delayed any attempt at consultation or making a dispensation application. It is also regrettable that that disrepair at [NAME] was not addressed at the same time as the fire safety works. This would clearly have been a sensible course but for whatever reason it was not adopted. As indicated [NAME] need to consider carefully the way in which they treat dispensation applications in the future. It is not a given that they will get dispensation. Neither has the need for consultation been watered down by legislation.

22. The Tribunal is grateful to Mr. [NAME] and [NAME] for their assistance. In particular, the Tribunal would like to congratulate [NAME] for the clarity of her arguments both in writing and orally. Whilst dispensation is given unconditionally the Tribunal allows an application under section 20C of the Act. The consequence of this is that the Applicants are not entitled to recover the costs of making their application from the service charge.

Judge Shepherd 31st March 2022

ANNEX - RIGHTS OF APPEAL Appealing against the tribunal’s decisions

1. A written application for permission must be made to the First-tier Tribunal at the Regional tribunal office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional tribunal office within 28 days after the date this decision is sent to the parties.

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 state the grounds of appeal, and state the result the party making the application is seeking. All applications for permission to appeal will be considered on the papers 5. Any application to stay the effect of the decision must be made at the same time as the application for permission to appeal.

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