Borland House, Bere Farm Lane, North Boarhunt, Fareham PO17 6DT CHI/24UE/LDC/2021/0086
DECISION
The Tribunal grants dispensation from the consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of the works listed in the estimate dated 31 August 2021 from JPD Construction Ltd. In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable. The Applicant is to send a copy of this determination to the Lessees. 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.[2]The Applicant explained that in the course of current major roof works seriously decayed timbers have been identified which require replacement.[3]The Tribunal made Directions on 2 November 2021 indicating that the Tribunal considered that the application was suitable to be determined on the papers without a hearing in accordance with rule 6A of the Tribunal Procedure Rules 2013 as amended by The Tribunal Procedure (Coronavirus) Amendment Rules 2020 SI 2020 No 406 L11.[4]The Tribunal required the Applicant to send to the Respondents the Building Surveyor’s report referred to in the application.[5]The Tribunal sent a copy of the application and these directions to each Respondent using the email addresses provided.[6]It was indicated that those lessees who agreed to the application or failed to respond would be removed as Respondents.[7]Five of the six lessees responded, all agreeing to the application and as indicated above the lessees have been removed as respondents.[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 parties’ positions were clear and provide sufficient information for the Tribunal to make its determination.[9]The only issue for the Tribunal is whether it is reasonable to dispense with any statutory consultation requirements. This decision does not concern the issue of whether any service charge costs will be reasonable or payable. The Law[10]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.[11]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 i. 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. ii. 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. iii. Dispensation should not be refused solely because the landlord seriously breached, or departed from, the consultation requirements. iv. The Tribunal has power to grant a dispensation as it thinks fit, provided that any terms are appropriate. v. 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). vi. 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. vii. 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. viii. 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. ix. Once the tenants had shown a credible case for prejudice, the Tribunal should look to the landlord to rebut it. Evidence[12]The reason for the application is set out in paragraph 2 above. The Tribunal has examined the report of Gordon Colbourne MRICS ACABE CertCII dated 20 August 2021 and is satisfied that the works are urgent and that it is not an option to seek competitive tenders.[13]The work for which dispensation is sought is set out in the estimate from JPD Construction Ltd dated 31 August 2021. Determination[14]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.[15]No objections have been received from the lessees and no prejudice as referred to in the Daejan case above has been identified.[16]The Tribunal is therefore prepared to grant the dispensation required.[17]In view of the above the Tribunal grants dispensation from the consultation requirements of S.20 Landlord and Tenant Act 1985 in respect of the works listed in the estimate dated 31 August 2021 from JPD Construction Ltd.[18]In granting dispensation, the Tribunal makes no determination as to whether any service charge costs are reasonable or payable.[19]The Applicant is to send a copy of this determination to the Lessees. D Banfield FRICS 17 November 2021 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.