Cherrett Court, 557 Ringwood Road, Ferndown, Dorset BH22 9FE CHI/19UD/LDC/2023/0021
DECISION
The Tribunal grants dispensation from the remaining consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of works to replace the flooring. In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable. The Applicant will send a copy of this decision to each lessee. Background[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. This retrospective application was received on 14 February 2023.[2]The property is described as a: “Purpose built block of flats comprising of one and two bedroom apartments, age-restricted community for the over Sixties.”[3]The Applicant explains that: The qualifying works are part of a planned renewal programme at McCarthy Stone development Cherrett Court. These works included the replacement of the flooring in communal areas around the development and this is what the dispensation application is in reference to. Consultation had been carried out at Cherrett Court to Notice 1, quotations had then been procured for the works. Observations at Notice 1 stage seem to demonstrate that homeowners were in support of the replacement of the flooring. Out of Section 20 process, the Cherret Court homeowners had been shown two quotes for the works and had agreed on which contractor to select although this decision sits with McCarthy Stone. At this point the House Manager instructed the works to begin without proceeding to Notice 2 and Notice 3 if required.[4]Dispensation is sought: “…. due to the fact that the Section 20 process was not correctly followed and therefore the consultation with all homeowners did not happen in line with legislation. However, we do not believe there has been any predudice [sic] shown towards homeowners on this occasion and we believe is a case of miscommunication and failure to follow procedure fully.”[5]The Tribunal made Directions on 1 March 2023 setting out a timetable for the disposal. The Tribunal required the Applicant to send them to the parties together with a form for the Leaseholders to indicate to the Tribunal whether they agreed with or opposed the application and whether they requested an oral hearing. Those Leaseholders who agreed with the application or failed to return the form would be removed as Respondents although they would remain bound by the Tribunal’s Decision.[6]On 9 March 2023 the Applicant confirmed that the Tribunal’s directions had been sent to the Lessees. The Tribunal received 10 responses all of which were in favour of the application and on 21 April 2023 the Applicant also confirmed that no objections had been received.[7]No requests for an oral hearing were made and the matter is therefore determined on the papers in accordance with Rule 31 of the Tribunal’s Procedural Rules.[8]Before making this determination, the papers received were examined to determine whether the issues remained capable of determination without an oral hearing and it was decided that they were, given that the application remained unchallenged. The Law[9]The relevant section of the Act reads as follows: S.20 ZA Consultation requirements: 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.[10]The matter was examined in some detail by the Supreme Court in the case of Daejan Investments Ltd v Benson. In summary the Supreme Court noted the following.a. The main question for the Tribunal when considering how to exercise its jurisdiction in accordance with section 20ZA is the real prejudice to the tenants flowing from the landlord’s breach of the consultation requirements.b. The financial consequence to the landlord of not granting a dispensation is not a relevant factor. The nature of the landlord is not a relevant factor.c. Dispensation should not be refused solely because the landlord seriously breached, or departed from, the consultation requirements.d. The Tribunal has power to grant a dispensation as it thinks fit, provided that any terms are appropriate.e. The Tribunal has power to impose a condition that the landlord pays the tenants’ reasonable costs (including surveyor and/or legal fees) incurred in connection with the landlord’s application under section 20ZA (1).f. The legal burden of proof in relation to dispensation applications is on the landlord. The factual burden of identifying some “relevant” prejudice that they would or might have suffered is on the tenants.g. The court considered that “relevant” prejudice should be given a narrow definition; it means whether non-compliance with the consultation requirements has led the landlord to incur costs in an unreasonable amount or to incur them in the provision of services, or in the carrying out of works, which fell below a reasonable standard, in other words whether the non-compliance has in that sense caused prejudice to the tenant.h. The more serious and/or deliberate the landlord's failure, the more readily a Tribunal would be likely to accept that the tenants had suffered prejudice.i. Once the tenants had shown a credible case for prejudice, the Tribunal should look to the landlord to rebut it. Evidence[11]The Applicant’s case is set out in paragraphs 3 and 4 above. Determination[12]Dispensation from the consultation requirements of S.20 of the Act may be given where the Tribunal is satisfied that it is reasonable to dispense with those requirements. Guidance on how such power may be exercised is provided by the leading case of Daejan v Benson referred to above.[13]In this case the Lessees received the Notice of Intention and were aware of the proposed works which were then subject to competitive tender. Ten Lessees have indicated their support for the application and no objections have been received. No prejudice has been identified by the Lessees and as such the Tribunal is prepared to grant the dispensation required.[14]The Tribunal therefore grants dispensation from the remaining consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of works to replace the flooring.[15]In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable.[16]The Applicant will send a copy of this decision to each lessee. D Banfield FRICS 2 May 2023 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.