Perpetual House, 10 Station Road, Henley-on Thames, RG9 1AF CAM/38UD/LDC/2025/0607
DECISION
[1]The Tribunal grants dispensation from the requirements on the applicant to consult all leaseholders under S.20ZA of the Landlord and Tenant Act 1985, in respect of the qualifying works referred to, only.[2]At the date of application it was stated that construction work had started. It was understood that the landlord’s agent was able to recharge costs under the service charge provisions to all leaseholders in the Property. Background[3]The management company, through its agent, applied to the Tribunal under S20ZA of the Landlord and Tenant Act 1985 (“the Act”) for the dispensation from all or any of the consultation requirements contained in S20 of the Act.[4]The application related to the commissioning of works at the Property which appeared to concern the communal hot water and heating system which provide heating and hot water into one or more of the flats and/or communal areas at the Property. Directions[5]In response to the application dated 24 January 2025, for dispensation from consultation of leaseholders, Directions dated 10 March 2025 were issued without an oral hearing. They identified that the respondents were the leaseholders of some 45No. flats at the Property. The Directions provided for the Tribunal to determine the application on or after 22 April 2025, unless a party applied on or before 31 March 2025 for a hearing.[6]The applicant was to send to each of the leaseholders of the dwellings at the Property documents including; a copy of the application form, brief description of the works, an estimate of the costs of the works including any professional fees and VAT and anything else relied upon, with a copy of the Directions.[7]The applicant was to file with the Tribunal a letter by 17 March 2025, confirming how and when it had been done.[8]Leaseholders who objected to the application were to send a reply form and statement to the Tribunal and applicant, by 31 March 2025. The applicant was to prepare a bundle of documents including the application form, Directions, sample lease and all other documents on which they wanted to rely; all responses from leaseholders, a certificate of compliance referred to above; with two copies to the Tribunal and one to each respondent leaseholder and do so by 7 April 2025.[9]In the event, the Tribunal did not receive any requests for a hearing, nor did it receive any forms in support of or objection to respondents either directly or indirectly via the bundle.[10]The Tribunal determined the case on the application form and of a sample lease of a flat at the Property, received from the applicant only, with copy documents sent to leaseholders. Applicant’s Case[11]The application, at box 4 confirms that: “Converted building of 45 apartments.”[12]The application at box 7 confirms that these are to be qualifying works, and had been started. They are not part of a long term contract.[13]At box 9 the applicant was content for paper determination and applied for it, at box 10, to be dealt with by Standard Track and did not indicate a ‘special reason’ for urgency in this case.[14]The application at ‘Grounds for seeking dispensation’, box 1. stated in addition: “1. Installation of x2 new strainers – Replaced in June 2024. 2. To supply and install a new side-stream filtration unit to the main heating pipework- installed July 2024. 3. Repairs/ replacements of all leaking valves / pipes of hot water system – carried out September 2024. 4. Flushed left hand side boilers in September 2024. 5. x2 boiler replacement (right hand side boiler) – installed November 2024.”[15]The application at box 2. below this, described the consultation carried out or is proposed to be carried out: “…The Applicant sent emailed update to residents and leaseholders on 29 May, 14 June, 21 June, 25 June, 28 June, 19 July, 2 August, 7 August and 9 September 2024…”[16]The application at box 3. below this stated: “Due to the urgent nature of the works, the applicant does not believe it was possible to wait the 60+ days required to consult under Section 20 as it would have left properties without heating and hot water. The applicant is therefore seeking dispensation from all consultation requirements of this qualifying work. The applicant does not believe the position of leaseholders has been prejudiced as two quotes were obtained for the x2 boiler replacements with the most competitive quote being instructed. Both contractors quoted against similar specifications, holding the relevant qualifications and accreditations considering the nature of the works. The additional works were required to be carried out as swiftly as possible to allow the new boilers to be installed and therefore obtaining second quotes for this work would have cause further delays in consistent hot water and heating being available to every property. The works were successfully complete and dispensation was applied for when the project was completed due to this being the only time all costs would have been reasonably known.”[17]In representations in bundle page 17, from the agent for the applicant they state at paragraph 3: “Multiple leaseholders and residents reported not having hot water in their properties and Advanced Maintenance attended on 29th May 2024 to investigate the communal hot water and heating system. It was identified that the two boilers on the right hand side were not working and due to their age and faults found the boilers needed to be replaced in order for provide consistent and reliable hot water heating to all properties.”[18]And below this statement: “Two quotes were obtained to replace the two boilers on the right hand side, one from UK Commercial Gas Limited at £38,500 + VAT and another from Advance Maintenance UK Ltd. at £26,227 +VAT…. From June 2024 the programme of works required to allow for the new boilers to be installed and the boilers were installed in November 2024 and the heating / hot water reinstated to properties.”[19]The applicant did not include a list of the names and addresses for service of all leaseholders of the flats at the Property.[20]The applicant provided the two quotes, in full. The work specified by each contractor appeared to the Tribunal to be essentially the same.[21]Firstly, reference No.3965 - PH, dated 11 October 2024, from Advanced Maintenance UK Ltd.. detailing the work summarized above for the total cost of £26,227 + VAT.[22]Secondly, reference No.E4087 – Gas Installation, dated 25 September 2024, from UK Commercial Gas Ltd.. detail the work summarized above for the total cost of £38,500 + VAT.[23]The applicant also provided the several invoices from the selected contractor (Advanced Maintenance UK Ltd) summarized in final Invoice No.72218 dated 5 December 2024 for £26,227.00 plus VAT.[24]It was not clear from the representations from the applicant when if at all, the applicant’s agent notified all leaseholders on that they would be seeking dispensation from the requirements of the Consultation process. On 14 March 2025 the applicant’s agent confirmed to the Tribunal that they had applied for dispensation from the Consultation and copied them in with the documents as Directed. Respondent’s Case[25]The applicant had identified 45No. leaseholders but there is no evidence that they provided their identities or contact addresses, to the Tribunal from whom the service charge would eventually be recovered and had been identified as the potential respondents.[26]The Tribunal did not receive any objections or other representations from the leaseholders, either through the applicant, or directly. The Law[27]S.18 (1) of the Act provides that a service charge is an amount payable by a tenant of a dwelling as part of or in addition to the rent, which is payable for services, repairs, maintenance, improvements or insurance or landlord’s costs of management, and the whole or part of which varies or may vary according to the costs incurred by the landlord. S.20 provides for the limitation of service charges in the event that the statutory consultation requirements are not met. The consultation requirements apply where the works are qualifying works (as in this case) and only £250 can be recovered from a tenant in respect of such works unless the consultation requirements have either been complied with or dispensed with.[28]Dispensation is dealt with by S.20 ZA of the Act which provides:- “Where an application is made to a leasehold valuation 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.”[29]The consultation requirements for qualifying works under qualifying long term agreements are set out in Schedule 3 of the Service Charges (Consultation Requirements) (England) Regulations 2003 as follows:- 1(1) The landlord shall give notice in writing of his intention to carry out qualifying works –(a) to each tenant; and(b) where a recognised tenants’ association represents some or all of the tenants, to the association. (2) The notice shall – (a) describe, in general terms, the works proposed to be carried out or specify the place and hours at which a description of the proposed works may be inspected; (b) state the landlord’s reasons for considering it necessary to carry out the proposed works;(c) contain a statement of the total amount of the expenditure estimated by the landlord as likely to be incurred by him on and in connection with the proposed works;(d) invite the making, in writing, of observations in relation to the proposed works or the landlord’s estimated expenditure(e) specify- (i) the address to which such observations may be sent; (ii) that they must be delivered within the relevant period; and (iii) the period on which the relevant period ends. 2(1) where a notice under paragraph 1 specifies a place and hours for inspection- (a) the place and hours so specified must be reasonable; and (b) a description of the proposed works must be available for inspection, free of charge, at that place and during those hours. (2) If facilities to enable copies to be taken are not made available at the times at which the description may be inspected, the landlord shall provide to any tenant, on request and free of charge, a copy of the description.[3]Where, within the relevant period, observations are made in relation to the proposed works or the landlord’s estimated expenditure by any tenant or the recognised tenants’ association, the landlord shall have regard to those observations.[4]Where the landlord receives observations to which (in accordance with paragraph 3) he is required to have regard, he shall, within 21 days of their receipt, by notice in writing to the person by whom the observations were made state his response to the observations. Tribunal’s Decision[30]The scheme of the provisions is designed to protect the interests of leaseholders and whether it is reasonable to dispense with any particular requirements in an individual case must be considered in relation to the scheme of the provisions and its purpose.[31]The Tribunal must have a cogent reason for dispensing with the consultation requirements, the purpose of which is that leaseholders who may ultimately pay the bill are fully aware of what works are being proposed, the cost thereof and have the opportunity to nominate contractors where there is no public procurement. The correspondence showed that the applicant complied generally with Directions.[32]The Tribunal saw no evidence that the applicant had notified the leaseholders of their impending application to the Tribunal prior to the issue of Directions, but did confirm that they had subsequently complied with those Directions once issued.[33]The terms of this Dispensation from the requirements of Section 20, are:[34]That this only covers the work set out in the application form. No other documents detailing the extent, quality, or price of the works being carried out and/or to be undertaken in respect of the works to remedy the hot water and space heating systems’ defects at the Property other than the form and two estimates from the two contractors named to the Tribunal.[35]No dispensation for any prior report, nor ancillary work before or after whichever quote or estimate was accepted by the applicant, is included in this dispensation. The cost quoted, accepted and since paid by the applicant to the contractor appointed, still remains subject to potential subsequent challenge by any respondent leaseholder, both of the item itself and/or the amount reasonably payable, in the usual way. Other than this no other items are included given dispensation because they were not specifically sought. Those other costs including any professional fees associated with the work will be subject to the annual cap of £250 per leaseholder for a contract for works rechargeable under a service charge or to a further application for dispensation if required. This is because they do not form part of this application for dispensation.[36]The applicant will meet all of its costs arising from the making and determination of this application. However these costs may be recovered from any leaseholder as service charge and/ or as an administrative charge if the lease of each unit allows for it, subject to the usual scope for leaseholder challenge to its reasonableness and payability.[37]In making its determination of this application, it does not concern the issue of whether any service charge costs are reasonable or indeed payable by the leaseholders. The Tribunal’s determination is limited to this application for dispensation of consultation requirements under S20ZA of the Act; in this case, on terms. N Martindale FRICS 22 April 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 either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on any point of law arising from this Decision. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision to the person making the application (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013). 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).