George Lloyd LimitedApplicantMs A. M. Corbridge and Mr C. G. Fischer Ground Floor Flat Mrs Maria Ludovica Orlando 1st Floor Flat Mr Anthony Olonode Coker 2nd & 3rd Floor Flat 3Respondent
Before
Judge Hugh LumbyMs Jane Mann MCIEHCrown Management (UK) Limited for the ApplicantVenue Paper determinationDate 9 January 2024Property: 3JEType of application: S.20ZA of the Landlord and Tenant Act 1985 Judge Hugh Lumby
DECISION
Decision of the Tribunal The Tribunal grants the application for the dispensation of all or any of the consultation requirements provided for by section 20 of the Landlord and Tenant Act 1985 (Section 20ZA of the same Act). The background to the application[1]The Property is a four storey Victorian townhouse and is divided into 3 flats, one on the ground floor, one on the first floor and the third on the second and third floors.[2]The Applicant has applied for dispensation from the statutory consultation requirements in respect of urgent works to repair the roof, mineral coverings and supporting boards to prevent water ingress into light fittings in the top floor flat.[3]There was water ingress into the top floor flat and its light fittings on 21 August 2023 and an inspection on 25 August 2023 revealed serious cracking to the felt and timber boards of the flat roof. AS Roofing (a roofing company) advised renewing the roof which would be backed with a 10 year guarantee and could be completed within ten days. A quotation for a temporary repair was obtained but this could not be guaranteed.[4]The works have been carried out. An invoice for the works has been received from the roofing company of £7,425. They also issued an invoice for a deposit of £1,800. The contractor provided photographs of the roof before and after the works were carried out and it is clear that the roof was in poor condition prior to the works.[5]The Applicant contends that the works needed to be carried out immediately to prevent further water ingress. It argues that full replacement is in the interests of all the leaseholders as it will provide a complete one time solution. This approach will negate the need for further visits by contractors, avoid additional scaffolding and other costs and minimise further instances of water ingress and resultant insurance claims and premium rises.[6]The managing agent for the Property emailed each of the leaseholders comprising the Respondent on 28 August 2023 advising them of the need for repairs and their proposed action. Mr Fischer, one of joint leaseholders of the ground floor flat, responded on 30 August 2023 telling the managing agents to “Proceed as necessary.” Mrs Orlando, the leaseholder of the first floor flat, responded on 29 August 2023 asking if there was sufficient money in the sinking fund to cover the costs as she was selling the flat. The leaseholder of the second floor flat (Mr Coker) who suffered the water ingress, does not appear to have responded to the email.[7]Whilst no consultation has been carried out, each of the leaseholders comprising the Respondent have been made aware of the application to seek dispensation. No objections or other responses were received.[8]By Directions of the Tribunal dated 25 September 2023 it was decided that the application be determined without a hearing, by way of a paper case. No parties have objected to this decision.[9]The Tribunal did not inspect the Property as it considered the documentation and information before it in the set of documents prepared by the Applicant enabled the Tribunal to proceed with this determination.[10]This has been a paper determination which has been consented to by the parties. The documents that were referred to are in a bundle consisting of 64 pages, comprising the Applicant’s application, the specimen lease provided with it, plus the Tribunal’s Directions dated 25 September 2023, a statement on behalf of the Applicant, invoices for the works and correspondence with the leaseholders, the contents of which has been recorded. The issues[11]The only issue for the Tribunal to decide is whether or not it is reasonable to dispense with the statutory consultation requirements. This application does not concern the issue of whether or not service charges will be reasonable or payable. Law[12]Section 20 of the Landlord and Tenant Act 1985 (as amended) (“the 1985 Act”) and the Service Charges (Consultation Requirements) (England) Regulations 2003 require a landlord planning to undertake major works, where a leaseholder will be required to contribute over £250 towards those works, to consult the leaseholders in a specified form.[13]Should a landlord not comply with the correct consultation procedure, it is possible to obtain dispensation from compliance with these requirements by an application such as this one before the Tribunal. Essentially the Tribunal must be satisfied that it is reasonable to do so.[14]The Applicant seeks dispensation under section 20ZA of the 1985 Act from all the consultation requirements imposed on the landlord by section 20 of the 1985 Act.[15]Section 20ZA relates to consultation requirements and provides as follows: “(1) 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. (2) In section 20 and this section— “qualifying works” means works on a building or any other premises, and “qualifying long term agreement” means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months. …. (4) In section 20 and this section “the consultation requirements” means requirements prescribed by regulations made by the Secretary of State. (5) Regulations under subsection (4) may in particular include provision requiring the landlord—(a) to provide details of proposed works or agreements to tenants or the recognised tenants’ association representing them,(b) to obtain estimates for proposed works or agreements,(c) to invite tenants or the recognised tenants’ association to propose the names of persons from whom the landlord should try to obtain other estimates,(d) to have regard to observations made by tenants or the recognised tenants’ association in relation to proposed works or agreements and estimates, and(e) to give reasons in prescribed circumstances for carrying out works or entering into agreements.[16]In the case of Daejan Investments Limited v Benson [2013] UKSC 14, by a majority decision (3-2), the Supreme Court considered the dispensation provisions and set out guidelines as to how they should be applied.[17]The Supreme Court came to the following conclusions:a. The correct legal test on an application to the Tribunal for dispensation is: “Would the flat owners suffer any relevant prejudice, and if so, what relevant prejudice, as a result of the landlord’s failure to comply with the requirements?”b. The purpose of the consultation procedure is to ensure leaseholders are protected from paying for inappropriate works or paying more than would be appropriate.c. In considering applications for dispensation the Tribunal should focus on whether the leaseholders were prejudiced in either respect by the landlord’s failure to comply.d. The Tribunal has the power to grant dispensation on appropriate terms and can impose conditions.e. The factual burden of identifying some relevant prejudice is on the leaseholders. Once they have shown a credible case for prejudice, the Tribunal should look to the landlord to rebut it.f. The onus is on the leaseholders to establish: i. what steps they would have taken had the breach not happened and ii. in what way their rights under (b) above have been prejudiced as a consequence.[16]Accordingly, the Tribunal had to consider whether there was any prejudice that may have arisen out of the conduct of the applicant and whether it was reasonable for the Tribunal to grant dispensation following the guidance set out above. Consideration[17]Having read the evidence and submissions from the Applicant and having considered all of the documents and grounds for making the application provided by the applicants, the Tribunal determines the dispensation issues as follows.[18]The Tribunal is of the view that, taking into account that there have been no objections from the leaseholders, it could not find prejudice to any of the leaseholders of the Property by the granting of dispensation relating to the repair the roof, mineral coverings and supporting boards to prevent water ingress into light fittings in the top floor flat and as set out in the application.[19]The Applicant believes that the works were urgent to address the ingress of water. On the evidence before it, the Tribunal agrees with this conclusion and believes that it is reasonable to allow dispensation in relation to the subject matter of the application.[20]The Applicant shall be responsible for formally serving a copy of the Tribunal’s decision on the leaseholders. Furthermore, the Applicant shall place a copy of the Tribunal’s decision on dispensation together with an explanation of the leaseholders’ appeal rights on its website (if any) within 7 days of receipt and shall maintain it there for at least 3 months, with a sufficiently prominent link to both on its home page. It should also be posted in a prominent position in the communal areas. Name: Tribunal Judge Lumby Date: 9 January 2024 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 a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. 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).