Mr Duncan Jagger MRICSDate 2 June 2025Property: London E2 7STType of application: S. 20ZA of the Landlord and Tenant Act 1985
DECISION
Decisions of the Tribunal(1) 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).(2) The reasons for the Tribunal’s decision are set out below. The background to the application[1]The property 39-40 Lion Mills, Hackney Road, London E2 7ST comprises 2 self-contained converted flats forming part of a Victorian building under a slate covered mansard roof with flat roof section.[2]The Tribunal did not inspect the property as it considered the documentation and information before it in the trial bundle enabled the tribunal to proceed with this determination.[3]The tribunal had before it a bundle of documents prepared by the applicant’s property managers, in accordance with directions dated 5 August 2024. The directions required the applicant to send each of the leaseholders a copy of the application form and the directions by email, hand delivery or by first class post.[4]The applicant’s representative sent the documents to the above-named leaseholders by email. Mr Sargent replied by email to say that he had sold his interest in the flat. He did not supply any contact information for the new leaseholder. The Tribunal were concerned that the new owner of Flat 39 had not been served with documents set out in the directions order.[5]On the 25 March 2025, the Tribunal issued further directions requesting the applicant to send to the current leaseholder of Flat 39 by first class post to that property addressed to the leaseholder of Flat 39 a copy of the application form and the two sets of directions.[6]On the 26 March 2025 the applicant’s managing agent confirmed the application and directions were sent first class to the leaseholder of Flat 39.[7]In an email to the Tribunal from Matt Goold of Barnard Cook dated 7 May 2025 the name of the new leaseholder of Flat 39 has been redacted. It also confirmed that no responses have been received from the two leaseholders. It was further confirmed, the works were undertaken and completed when Mr Sargent was the leaseholder and paid by the service charge demands in 2024. (A) The Applicant seeks dispensation under section 20ZA of the Landlord and Tenant Act 1985 (“the 1985 Act”) from all the consultation requirements imposed on the landlord by section 20 of the 1985 Act, (see the Service Charges (Consultation Requirements) (England) Regulations 2003 (SI2003/1987), Schedule 4.) The request for dispensation concerns urgent repair works to the flat roof covering in order to prevent further water ingress to the upper floor flat (40). This is a continuation of the defective roof covering for which dispensation was granted pursuant to a previous application (Ref: LON/00BG/LDC/2023/0281)[8]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.[9]In essence, the works mentioned above are required to ensure that the applicant provide a watertight building and to maintain the fabric of that building in order to make the building fit for habitation and to comply with the Landlords covenants in the lease. The decision[10]The Tribunal had before it a bundle of documents prepared by the applicant that contained the application, grounds for making the application, the list of leaseholders, a specimen copy lease a copy of the Tribunal directions, an Asbestos Report, specification of works from Dayco Maintenance and invoice £2,284.80 inclusive of VAT and an invoice from Hart Waste Asbestos Removal in the sum of £400 plus Vat. 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.[12]Having read the evidence and submissions from the Applicant and having considered all of the copy lease, documents and grounds for making the application provided by the Applicant, the Tribunal determines the dispensation issues as follows.[13]Section 20 of the Landlord and Tenant Act 1985 (as amended) 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.[14]Should a landlord not comply with the correct consultation procedure, it is possible to obtain dispensation from compliance with these requirements by such an application as is this one before the Tribunal. Essentially the Tribunal must be satisfied that it is reasonable to do so.[15]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.[16]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.[17]Accordingly, the Tribunal had to consider whether there was any prejudice that may have arisen out of the conduct of the lessor/applicant and whether it was reasonable for the Tribunal to grant dispensation following the guidance set out above.[18]The Tribunal is of the view that, in the absence of any significant written representations from any of the leaseholders, it could not find prejudice to any of the tenants of the properties by the granting of dispensation relating to the roofing works and removal of asbestos containing roof tiles as set out in detail in the documentation in the trial bundle submitted in support of the application.[19]The Tribunal was mindful of the fact that the works have been undertaken and invoices submitted to the managing agents.[20]The Applicant believes the remedial works to the flat roof covering were vital given the fact that if left untreated the upper floor flat would suffer continuing water ingress and internal damage. In effect the leaseholders of the properties have not suffered any prejudice by the failure to consult and that therefore dispensation is wholly appropriate.[21]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. It must be the case that the necessary works to the flat roof should be carried out as a matter of urgency to ensure the maintenance of the fabric of the building and hence the decision of the Tribunal.[22]Rights of appeal made available to parties to this dispute are set out in an Annex to this decision.[23]The Applicant shall be responsible for formally serving a copy of the Tribunal’s decision on the 2 leaseholders. Furthermore, the applicant’s property manager 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. Copies must also be placed in a prominent place in the common parts of the block. In this way, leaseholders who have not returned the reply form may view the tribunal’s eventual decision on dispensation and their appeal rights. ANNEX - RIGHTS OF APPEAL[1]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.[2]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.[3]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.[4]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.