1 Mews Road, St Leonards On Sea, East Sussex, TN38 0EA HAV/21UD/LDC/2024/0523

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case No HAV/21UD/LDC/2024/0523

Between

One Mews Road Freehold LimitedApplicant

Nicholas Dargan (Flat A) Kristina Terry (Flat B) Mandy Watson (Flat C) Ian Rabbett (Flat D) Theresa Caruana (Flat E) John Standaloft & Vivienne Collins (Flat F)Respondent

Before

Regional Judge D Whitney

Oakfield P M Ltd for the Applicant

Date 9 October 2024

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 received by email on 10 September 2024.

[2]The property is described as a, LATE 19TH CENTURY 3 STOREY BUILDING WITH A BASEMENT/ CELLAR UNDER PART AND WHICH HAS BEEN EXTENDED AND CONVERTED TO PROVIDE 6 SELF - CONTAINED FLATS.

[3]The Applicant explains that: THE WORKS ARE URGENTLY REQUIRED TO THE ROOF TO RECTIFY SEVERE WATER INGRESS INTO FLAT C. THIS IS TO BE COMPLETED AS THIS IS CAUSING WATER DAMAGE TO THE PROPERTY STRUCTURE AND FLAT C, THE PROPERTY IS PARTIALLY UNINHABITABLE. WATER INGRESS IS ENTERING THE PROPERTY COMING FROM A GULLEY LOCATED ABOVE, BETWEEN 1 MEWS AND THE NEIGHBOURING PROPERTY. THIS HAS DETERIORATED BEYOND SHORT TERM/ SMALL REPAIRS. THE LEASEHOLDER HAS DISCUSSED AND RECEIVED QUOTATIONS FOR THE WORKS REQUIRED TO THE GULLEYS. WE HAVE COMMENCED SECTION 20 CONSULTATION TO ALL LEASEHOLDERS DUE TO THE URGENCY OF THE WORKS. WE ARE IN THE PROCESS OF OBTAINING 3 QUOTATIONS FOR THE WORKS REQUIRED. FAILING THAT THE DISPENSATION APPLICATION IS UNSUCCESSFUL, WE WANT TO ENSURE THAT THIS PROCESS HAS BEGUN TO ENSURE THERE ARE NO DELAYS THEREFORE, IT IS LIKELY TO BE COMPLETED PRIOR TO COMPLETION OF DISPENSATION DUE TO URGENCY. DUE TO THE ISSUE OF THE GULLEY ON THE ROOF WHICH IS NOT FIT FOR PURPOSE AND RESULTED IN A SIGNAFICANT LEAK IN FLAT 5 AND IS NOW A THREAT TO THE BUILDING STRUCTURE, THE WORKS NEED TO BE CARRIED OUT URGENTLY.

[4]The Applicant has submitted two estimates for these works.

[5]The Tribunal issued Directions on 23 September 2024 which were sent to the Lessees together with a form for them to indicate to the Tribunal whether they agreed with or opposed the application and whether they requested an oral hearing. If the Leaseholders agreed with the application or failed to return the form, they would be removed as a Respondent although they would remain bound by the Tribunal’s Decision.

[6]The Tribunal received no objections to the application from the leaseholders and on 7 October 2024 the Applicant also confirmed that they had not received any responses either. Further, there were no requests for an oral hearing. The matter is therefore determined on the papers in accordance with Rule 31 of the Tribunal’s Procedural Rules.

[7]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.

[8]The only issue for the Tribunal is whether or not it is reasonable to dispense with the statutory consultation requirements. This application is not about the proposed costs of the works, and whether they are recoverable from the leaseholders as service charges or the possible application or effect of the Building Safety Act 2022. The leaseholders have the right to make a separate application to the Tribunal under section 27A of the Landlord and Tenant Act 1985 to determine the reasonableness of the costs, and the contribution payable through the service charges. The Law

[1]Section 20 of the Landlord and Tenant Act 1985 (“the Act”) and the related Regulations provide that where the lessor intends to undertake major works with a cost of more than £250 per lease in any one service charge year the relevant contribution of each lessee (jointly where more than one under any given lease) will be limited to that sum unless the required consultations have been undertaken or the requirement has been dispensed with by the Tribunal. An application may be made retrospectively.

[2]Section 20ZA provides that on an application to dispense with any or all of the consultation requirements, the Tribunal may make a determination granting such dispensation “if satisfied that it is reasonable to dispense with the requirements”.

[3]The appropriate approach to be taken by the Tribunal in the exercise of its discretion was considered by the Supreme Court in the case of Daejan Investment Limited v Benson et al

[2013] UKSC 14

[4]The leading judgment of Lord Neuberger explained that a tribunal should focus on the question of whether the lessee will be or had been prejudiced in either paying where that was not appropriate or in paying more than appropriate because the failure of the lessor to comply with the regulations. The requirements were held to give practical effect to those two objectives and were “a means to an end, not an end in themselves”.

[5]The factual burden of demonstrating prejudice falls on the lessee. The lessee must identify what would have been said if it was able to engage in a consultation process. If the lessee advances a credible case for having been prejudiced, the lessor must rebut it. The Tribunal should be sympathetic to the lessee(s).

[6]Where the extent, quality and cost of the works were in no way affected by the lessor’s failure to comply, Lord Neuberger said as follows: “I find it hard to see why the dispensation should not be granted (at least in the absence of some very good reason): in such a case the tenants would be in precisely the position that the legislation intended them to be- i.e. as if the requirements had been complied with.”

[7]The “main, indeed normally, the sole question”, as described by Lord Neuberger, for the Tribunal to determine is therefore whether, or not, the Lessee will be or has been caused relevant prejudice by a failure of the Applicant to undertake the consultation prior to the major works and so whether dispensation in respect of that should be granted.

[8]The question is one of the reasonableness of dispensing with the process of consultation provided for in the Act, not one of the reasonableness of the charges of works arising or which have arisen.

[9]If dispensation is granted, that may be on terms.

[10]The effect of Daejan has been considered by the Upper Tribunal in Aster Communities v Kerry Chapman and Others

[2020] UKUT 177 (LC)

, although that decision primarily dealt with the imposition of conditions when granting dispensation and that the ability of lessees to challenge the reasonableness of service charges claimed was not an answer to an argument of prejudice arising from a failure to consult. Evidence

[11]The Applicant’s case is set out in paragraphs 2 and 3 above. Decision

[12]No objections have been received from the leaseholders.

[13]I have considered the application form dated 10 September 2024 and the additional documentation served with it and accept the facts set out within it. I am satisfied that these facts prima facie are sufficient to justify making an application for dispensation from consultation requirements given the time such consultation will take.

[14]In reaching my decision I have taken account of the fact that the leaseholders have had opportunity to raise any objection and they have not done so. They have not asserted that any prejudice has been caused to them.

[15]The Tribunal finds that the Respondents have not suffered any prejudice and that nothing different would be done or achieved in the event of a full consultation with them, except for potential delays and problems.

[16]I therefore grant dispensation from consultation requirements of S.20 Landlord and Tenant Act 1985, subject to a condition that a copy of this decision shall be served by the Applicant upon all leaseholders at the Property.

[17]For completeness, I confirm in making this determination, I make no findings as to the liability to pay or the reasonableness of the estimated costs of the works. If a Lessee wishes to challenge the payability or reasonableness of those costs, then a separate application under section 27A of the Landlord and Tenant Act 1985 would have to be made. 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

[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.