Vie Building Water Street Manchester M3 4JU MAN/00BN/LDC/2019/0042
DECISION
Compliance with the consultation requirements of section 20 of the Landlord and Tenant Act 1985 is dispensed with in relation to works comprising the installation of a fire detection system at the Property; appropriate rewiring of the smoke vents; and compartmentation works in respect of fire breaks. A more detailed description of these works is given in paragraph 4 below.REASONS
[1]On 20 November 2019, an application was made to the First-tier Tribunal (Property Chamber) (“the Tribunal”) under section 20ZA of the Landlord and Tenant Act 1985 (“the Act”) for a determination to dispense with the consultation requirements of section 20 of the Act. Those requirements (“the consultation requirements”) are set out in the Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Regulations”).[2]The application was made by Vie (Manchester) Management Company Limited and relates to premises known as Vie Building, Water Street, Manchester M3 4JU (“the Property”). The Applicant is the management company under the long leases of the 207 residential apartments within the Property. The Respondents to the application are the long leaseholders of those apartments. A list of the Respondents is set out in the Annex hereto.[3]The only issue for the Tribunal to determine is whether or not it is reasonable to dispense with the consultation requirements.[4]The works in respect of which a dispensation is sought concern fire protection measures which the Applicant says are urgently required to safeguard the occupiers of the Property. In particular, the proposed works comprise the installation of a fire detection system within the individual apartments and linked with the common parts; rewiring of smoke vents to ensure that they are working correctly and for their intended purpose in directing smoke out of the Property (as opposed to potentially spreading smoke to other floors); and compartmentation works to the internal parts of the Property consisting of works to the firefighting shaft, dry riser inlets and the bin store to ensure the compartmentation to reduce the spread of fire is satisfactory.[5]On 3 December 2019, the Tribunal issued directions and informed the parties that, unless the Tribunal was notified that any party required an oral hearing to be arranged, the application would be determined upon consideration of written submissions and documentary evidence only. No such notification was received and the Tribunal therefore convened on the date of this decision to consider the application in the absence of the parties. Copies of the application (with supporting documentation) had been provided to each Respondent and three of them submitted written representations in response. The Applicant then provided a reply to those representations. We considered all of this material when determining the application.[6]The Tribunal did not inspect the Property but we understand it to comprise a major purpose-built development of two apartment blocks known as The Medlock Building and The Irwell Building which together contain 207 residential apartments. The Medlock Building also contains a ground floor commercial unit and an underground ventilated car park. In addition, there is an external open-air car park. Grounds for the application[7]The Applicant’s case is that, following testing of the external cladding system, deficiencies in the Property’s fire safety measures have been identified. Although the external cladding does not consist of Aluminium Composite Material, it has defects in respect of its fire stopping qualities and risk of extensive fire spread. In addition, the buildings’ compartmentation and smoke vents have been found to be insufficient and thus to pose a further health and safety risk to residents.[8]Following discussions with Greater Manchester Fire and Rescue Service, the Applicant has arranged for fire marshals to patrol the Property on a 24/7 basis pending the installation of a full-scale fire alarm system. The fire marshals would assist in the evacuation of the Property in the event of a fire. However, the Applicant wishes to carry out all the proposed works as soon as possible in order to comply with the guidance it has received, to remove the need for the fire marshals, and to return the Property to a “stay put” policy in the event of fire. Law[9]Section 18 of the Act defines what is meant by “service charge”. It also defines the expression “relevant costs” as: the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable.[10]Section 19 of the Act limits the amount of any relevant costs which may be included in a service charge to costs which are reasonably incurred, and section 20(1) provides: Where this section applies to any qualifying works … the relevant contributions of tenants are limited … unless the consultation requirements have been either–(a) complied with in relation to the works … or(b) dispensed with in relation to the works … by the appropriate tribunal.[11]“Qualifying works” for this purpose are works on a building or any other premises (section 20ZA(2) of the Act), and section 20 applies to qualifying works if relevant costs incurred on carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.00 (section 20(3) of the Act and regulation 6 of the Regulations).[12]Section 20ZA(1) of the Act provides: Where an application is made to the appropriate tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works … the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.[13]Reference should be made to the Regulations themselves for full details of the applicable consultation requirements. In outline, however, they require a landlord (or management company) to:• give written notice of its intention to carry out qualifying works, inviting leaseholders to make observations and to nominate contractors from whom an estimate for carrying out the works should be sought;• obtain estimates for carrying out the works, and supply leaseholders with a statement setting out, as regards at least two of those estimates, the amount specified as the estimated cost of the proposed works, together with a summary of any initial observations made by leaseholders;• make all the estimates available for inspection; invite leaseholders to make observations about them; and then to have regard to those observations;• give written notice to the leaseholders within 21 days of entering into a contract for the works explaining why the contract was awarded to the preferred bidder if that is not the person who submitted the lowest estimate. Conclusions[14]The Tribunal must decide whether it is reasonable for the works to go ahead without the Applicant first complying with the consultation requirements. Those requirements are intended to ensure a degree of transparency and accountability when a landlord (or management company) decides to undertake qualifying works – the requirements ensure that leaseholders have the opportunity to know about, and to comment on, decisions about major works before those decisions are taken. It is reasonable that the consultation requirements should be complied with unless there are good reasons for dispensing with all or any of them on the facts of a particular case.[15]It follows that, for it to be appropriate to dispense with the consultation requirements, there needs to be a good reason why the works cannot be delayed until the requirements have been complied with. The Tribunal must weigh the balance of prejudice between, on the one hand, the need for swift remedial action to ensure that occupiers of the Property are not placed at undue risk and, on the other hand, the legitimate interests of the leaseholders in being properly consulted before major works begin. It must consider whether this balance favours allowing the works to be undertaken immediately (without consultation), or whether it favours prior consultation in the usual way (with the inevitable delay in carrying out the works which that will require). The balance is likely to be tipped in favour of dispensation in a case in which there is an urgent need for remedial or preventative action, or where all the leaseholders consent to the grant of a dispensation.[16]In the present case, it is obvious that essential works to ensure that the Property has adequate fire safety measures should be undertaken as soon as possible: this is appropriate not only to minimise risk to the health and safety of the occupiers of the Property, but also to minimise the cost of stop-gap protection in the form of on-site fire marshals. We have no hesitation in finding that the balance of prejudice favours permitting such works to proceed without delay.[17]In reaching this conclusion, we note that the Applicant has not yet completed the task of selecting contractors to carry out the works and that the anticipated overall costs of the works are as yet unknown. Neither of these factors detract from the fact that the proposed works are of an urgent nature, and we note also that the developer of the Property, Redrow Group Services, has provided the Applicant with a “without prejudice loan” to begin the works. The Applicant is currently proceeding on the basis that this loan will have to be repaid and that the cost of the works will ultimately be borne by the respondents as service charge payers.[18]We also note that, whilst the Applicant has not fully complied with the statutory consultation requirements, it has provided each Respondent with an initial notice of its intention to carry out the works. Moreover, although three individual Respondents have made representations in response to the present application to the Tribunal, none have expressed opposition to the grant of dispensation (indeed, two of them indicated their support). The common theme in the representations received was concern about where ultimate liability for the cost of the works should fall: should the cost be borne by the leaseholders or should it be met by the developer? Although it is quite understandable that leaseholders should be concerned about this, it is not a matter for the Tribunal to rule on in these proceedings. Nor does it go to the question whether we should grant the application for dispensation.[19]Nevertheless, the fact that the Tribunal has granted dispensation from the consultation requirements should not be taken as an indication that we consider that the amount of the anticipated service charges resulting from the works is likely to be reasonable; or, indeed, that such charges will be payable by the Respondents. We make no findings in that regard. Judge J Holbrook 6 February 2020 ANNEX (List of Respondents) Mr Bagnall Mr Jones Joseph Archer Mr & Mrs Sandiford Mr Channa Dr D J Kaminski Dr D J Kaminski Declan O'Hara Rehab 95 Limited Messers Johnson & Jackson Mr Lissen Mr D Bentley and Mrs K Bentley Mr Dunning Ms Quin & Ms Samson Dr Wasim Ahmed Dr Sawal & Dr Hussain Mr P Flood Mr Neil Michael Murray Ms Alice Smith Mr Luke Halliwell Mrs Gray Mr Blair and Ms Taverna Mr K Morley Dr Rohaj Kent Mehta Mr Walker Kinza Iqbal Jaffri Ms Mooney Ms Abhi Kandola Mr Silver Ms Edgar & Mr Black Stewart Marsh Miss Mary L Bason Mr C Morally Peter Elliot Fry Heather Aspinall Mr Dunning Mr Stephen Gold Mr Christopher A Gold Mr Absolom P&CE Joyner Mr C Lamb Deklon Lowe Mr Rawson & Mr Mercer Oystercatcher Properties Mrs Chapman Mrs Matin Mr A Stillhard Mr Dunning Christopher Andrew Bauer Karan and Raghav Bhatia Gopinder Lalia Mr & Mrs James Dr A M Ismail Ms Kirstie Wilson Messers Ming Y Pan Mr Parry & Mr Harris Mr S Alam Masud Shirin Mr & Mrs Whalley Mr Ahmed Din Mrs Dasu Mr Yusuf Mr C & Mr R Kershaw AWM Property Investment Limited Foremost Estate Limited Mrs Fatona Mr Haigh Mr Jones Rahul Sharma & Panna Sharma Mrs Gray Rehab 95 Limited Rehab 95 Limited Mrs Blair & Mr Taverna Mr and Mrs Lee Mr Thompson & Ms Hughes Mr Bagnall Ms Freya Elizabeth Hoyle Mr & Mrs Hall Mr Roach Gabriel Feldman Messers Morris Mr John Roscoe & Hsien-Min Hsieh Mr James Cunningham Mr & Mrs Saini Mr Jonathan Wilmot & Miss Leoni McLachlan Mr & Mrs Sinclair Mr & Mrs Hussain Jiva & Hussain Properties Mr Bowie Stuart James Parkinson Shaun Gelsthorpe Mr Ajmal Nasir Jiva & Hussain Properties Mr and Mrs Bonacina Mr L Athie & Ms H Athie Zulfikar Mustafa Karimjee Zhe Song & Ms Rong Zheng AWM Property Investment Limited Mr Junyong Mei Mr and Mrs D Henderson Mr D Probyn Mr Edwards Ms Sabita Ballack Ms Marian Cole Pradeep Chopra & Anurandha Chopra Mr S Canning Ashley Singh Naresh Chopra and Tina Chopra Mr J Clarke Mr B R Kitchin Mr N A Luck Mr Quinn & Ms Carolan Mr & Mrs K Chopra Mr & Mrs D Keep Mr P Kitchin Fiona Wise Mr Phillip Eckersley Mr and Mrs Stephen Eyre Ms J Lawson Mr B Kitchin Timothy Daniel Clarke & Holly Amanda Smith Mr B K Raven Constance Adoley Annan Parth Consultants Mr Craig Mr & Mrs Price Martin Copeland Mrs Yuk Ching Lee Mr Grunsell Malcolm Gibson Mr and Mrs Briggs Mr M Hamer & Mrs V Hamer Mr Hayhurst Katharina Rebecca Ausborn Mr & Mrs Smith Mr Fellows Mr William Rowlands & Ms Tarciana Peel Mr Matt Wilden Mr & Mrs Igoe Mr Russell Croker Holly Jones Mark Jones Mr & Mrs Houghton & Mr & Mrs Price Conor Clafferty Mr Kumar Mr & Mrs Igoe Mr & Mrs Igoe Mr Guest Mr Andrew Mark Jepson Mr Swindells Susannah Warrington Mr Parker Mrs Pauline Bamber Mr & Mrs Southam Mr & Mrs Southam Mr & Mrs Southam Mr I P Jones and Mrs K C Jones Mr Milne Toby Taylor Osborne Lindsay Ms Gerrard The ASIS Partnership Mr Brock & Mr Neary Nicholas John Simons Mr Roberts & Mr Gillespie Mr Robertshaw & Ms Hawitt Mr and Mrs Chatterjee James Morris Mr Yip Robin A V Higson Mr T Harris & Ms H Armstrong Mr Shahad Zafar Katherine Norton Matthew Robert Morrison Mr Stephen Dawson & Miss Cheryl Ballance Mr and Mrs Mak Mr Andrew Morris Mr Sean McCleary Nicola Murphy Mr Ruben Wolff Joanna Hall Mr Chambers and Miss Rothwell Mr and Mrs Mak Mr and Mrs Carrington Mr Dearden Mr McGlynn AWM Property Investment Limited Mr Smith Francesca Kate See Mr & Mrs I Lasplace Mr & Mrs Broadley Mr Andrew Morris Hassina Begum Mr Liam Anthony McDaid Ms Antonia Oxley Mr & Mrs Saini Mr Terry Jackson Mr Newell John Mr Martin Hugh Lafferty Mr & Mrs Redmond Mark Christian Kirschstein Miss Elaine Man Chuan Wong Mr Ahmed Din C/O Lloyds Banking Group Mr Adrian Pak Wai Hung Mr & Mrs Ip Dr Chakrabarti Mr and Mrs Briggs Mr & Mrs Ratcliffe Ridley Thaw LLP