Judge Tildesley OBEHobdens Property Management Ltd for the ApplicantDate 23 November 2022Property: 13-14 Kings Gardens, Hove, East Sussex BN3 2PGType of application: To dispense with the requirement to consult lessees about major works section 20ZA of the Landlord and Tenant Act 1985
DECISION
[1]The Applicant seeks 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. The application was made on 3 August 2022.[2]The Applicant described the property as a period (grade II) listed building on Hove seafront. It was converted in to 17 apartments of varying sizes and service charge apportionments. All leaseholders were also shareholders in the freehold company.[3]The Applicant explained that there was significant water penetration in one of the top flats which required urgent attention. The Applicant had secured one quotation from Pinnacle Roofing Limited to carry out the necessary repairs in the sum of £6,235 plus VAT with a contingency of £1,000 to £2,000 for unforseen slating and leadworks to the front elevation. Unfortunately the Applicant was unable to obtain quotations from other contractors because of the current climate. The Applicant considered that Pinnacle Roofing Limited would undertake the work to a good standard. The Applicant had written to all leaseholders explaining the situation and no leaseholder had objected to Pinnacle Roofing Limited carrying out the works .[4]The Applicant asked for dispensation from the requirement to consult with the leaseholders because of the urgency of the works and the need to undertake the repairs whilst the selected contractor was able to do so.[5]On 7 September 2022 the Tribunal directed the Applicant to serve the application and directions on the Respondents, which the Applicant confirmed that it had done so on 12 September 2022.[6]The Tribunal required the Respondents to return a pro-forma to the Tribunal and to the Applicant by 28 September indicating whether they agreed or disagreed with the Application. None of the Respondents returned the pro-forma. . Determination[7]The 1985 Act provides leaseholders with safeguards in respect of the recovery of the landlord’s costs in connection with qualifying works. Section 19 ensures that the landlord can only recover those costs that are reasonably incurred on works that are carried out to a reasonable standard. Section 20 requires the landlord to consult with leaseholders in a prescribed manner about the qualifying works. If the landlord fails to do this, a leaseholder’s contribution is limited to £250, unless the Tribunal dispenses with the requirement to consult.[8]In this case the Tribunal’s decision is confined to the dispensation from the consultation requirements in respect of the works under section 20ZA of the 1985 Act. The Tribunal is not making a determination on whether the costs of those works 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 1985 would have to be made.[9]Section 20ZA does not elaborate on the circumstances in which it might be reasonable to dispense with the consultation requirements. On the face of the wording, the Tribunal is given a broad discretion on whether to grant or refuse dispensation. The discretion, however, must be exercised in the context of the legal safeguards given to the Applicant under sections 19 and 20 of the 1985 Act. This was the conclusion of the Supreme Court in Daejan Investments Ltd v Benson and Others [2013] UKSC 14 & 54 which decided that the Tribunal should focus on the issue of prejudice to the tenant in respect of the statutory safeguards.[10]Lord Neuberger in Daejan said at paragraph 44 “Given that the purpose of the Requirements is to ensure that the tenants are protected from(i) paying for inappropriate works or(ii) paying more than would be appropriate, it seems to me that the issue on which the LVT should focus when entertaining an application by a landlord under s 20ZA(1) must be the extent, if any, to which the tenants were prejudiced in either respect by the failure of the landlord to comply with the Requirements”.[11]Thus, the correct approach to an application for dispensation is for the Tribunal to decide whether and if so to what extent the leaseholders would suffer relevant prejudice if unconditional dispensation was granted. The factual burden is on the leaseholders to identify any relevant prejudice which they claim they might have suffered. If the leaseholders show a creditable case for prejudice, the Tribunal should 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 leaseholders fully for that prejudice.[12]The Tribunal now turns to the facts. The Tribunal is satisfied that it is necessary to carry out the works as an urgent measure to stop the water penetration to the dormer above Flat 12. The Tribunal accepts the Applicant’s explanation that it was unable to obtain quotations from other contractors. On the face of it the quotation was from a recognised roofing contractor and did not appear excessive for the works proposed. Given those circumstances the Tribunal finds that Applicant could not wait to undertake a full consultation exercise before it carried out the works. The Tribunal observes that no leaseholders have objected to the Application.[13]The Tribunal , therefore, decides that the leaseholders would suffer no relevant prejudice if dispensation from consultation was granted. Decision[14]The Tribunal grants an order dispensing with the consultation requirements in respect of the works to the roof pursuant to section 20ZA of the 1985 Act.[15]The Tribunal directs the Applicant to supply a copy of the decision to the leaseholders and confirm that it has served the decision on them. 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 by email to rpsouthern@justice.gov.uk 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.