The Box Works, 4 Worsley Street, Manchester M15 4NU MAN/00BN/LDC/2024/0016
DECISION
The Tribunal determines that dispensation from consultation for the works as detailed in the application be granted pursuant to s20ZA Landlord and Tenant Act 1985. INTRODUCTION[1]An application was made by the Applicant Management Company for dispensation of the consultation requirements of s20 of the Landlord and Tenant Act 1985 and The Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Consultation Requirements”) relating to Qualifying Works to an external glazed window at the Box Works, 4 Worsley Street, Manchester M15 4NU ("the Property").[2]Directions were made by a Legal Officer of the Tribunal on the 25 November 2024. The Applicant was directed to send to the Tribunal, with a copy to each Respondent, a bundle of documents, consisting of a statement of case, correspondence sent to the leaseholders in relation to the works, detailed reasons for the urgency of the works and the consequences upon lessees of any delay; any quotes or estimates for the proposed works and relevant reports (including full details of attempts made by the Applicant to obtain quotes or estimates) and copies of any other documents the Applicant seeks to rely on in evidence.[3]Any Respondent who opposes the application was directed, within 14 days of receipt of the Applicant's bundle to send to the Applicant and to the Tribunal, any statement they wished to make in response to the Applicant’s case. THE PROPERTY[4]The Applicant described the Property as a 6 storey building comprising 82 apartments and 10 commercial units, constructed in or around 2005. The developer Urbansplash had converted an old warehouse (rear block) and added a new build extension (front block) at the time of conversion. The building is constructed from steel frame with glass and tile cladding. The internal structure is of steel beams in the front block and concrete/brick walls with large areas of glazing in the rear block. Fenestration consists of full height glazing with aluminium sliding doors and casements. Internally, the communal areas consist of plastered and painted ceilings and walls with concrete carpeted floors to corridor and ceramic tiled floors to the entrance lobby and ground floor corridor.[5]The Applicant stated that the east façade of the building extends to 6 levels; there are 4 apartments situated upon each level. Apartments at level 1 to 4 have a continuous structural glazing as external wall finish and have access onto a shared balcony area that is enclosed with sliding glass panels. At level 5, the apartments are set back with access onto a balcony area and have 3 glazed patio doors presented as external wall finish. At level 6, the arrangement is similar to level 5, but the balcony areas are open. The commercial properties occupy street level areas. THE MAJOR WORKS[6]The Applicant stated that the qualifying works relate to an external glazed wall to the east side of the building. That area of the building has suffered from water ingress, and it has appeared that the condition has deteriorated. It is noted that evidence of “flash band” and mastic repairs can be seen about this façade in numerous locations.[7]During April, the development was undergoing a cladding remediation with scaffolding erected along the full length of the building. The Applicant appointed Thomason to produce a comprehensive report on the damage and recommendations to remedy the area.[8]Recommended works included removal and replacement of the existing mastic seals, prime using Sika Aktivator- 205 and seal with Everbuild Tecnic Silicone 825 Mid Grey, removal of the existing “flash band” materials and replace with 100mm wide tape at a total cost of £33,192.13 including VAT. THE LEGISLATION The relevant legislation is contained in s20ZA Landlord and Tenant Act 1985 which reads as follows: s20 ZA Consultation requirements: supplementary(1) 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 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.(3) The Secretary of State may by regulations provide that an agreement is not a qualifying long term agreement— (a) if it is an agreement of a description prescribed by the regulations, or (b) in any circumstances so prescribed.(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.(6) Regulations under section 20 or this section— (a) may make provision generally or only in relation to specific cases, and (b) may make different provision for different purposes.(7) Regulations under section 20 or this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament THE APPLICATION[9]No Leaseholders opposed the works.[10]The Applicant estimated that scaffolding would amount in the region of £70,000 to £100,000. The cost of scaffolding would not be charged to the Leaseholders, except for adjustments in reaching the actual damaged area and this is reflected in the total sum of the works, given that it was in place for the cladding works.[11]The Applicant appointed the same contractor remedying the cladding elements, 2nd Generation Facades. The works were overseen by Thomasons. That decision was evaluated against time and money.[12]The Applicant averred that they had acted within a reasonable scope for the avoidance of financial burden.[13]Several letters were sent to the leaseholders, (24 April, 23 May, 15 June and 21 July 2023) which alongside updates on the cladding works (funding for which was provided from the Government Building Remediation Fund), advised leaseholders of the need for the water penetration works, the costs of the works and the intention to apply for dispensation, and generally keeping them informed. The leaseholders were supplied with a copy of this Application.[14]The Applicant stated that their understanding of prejudice is that this would occur if the works resulted in an unreasonable financial cost to the leaseholder because the works: (c) were unnecessary or inappropriate (c) were carried out to an inappropriate standard (c) resulted in an unreasonable amount of costs[15]The Applicant stated that the works were necessary and urgent, as recommended by Thomasons. They submitted that they conducted an equitable approach in appointing a contractor that was already on site, and that the leaseholders have not been prejudiced by the lack of consultation process.[16]It is held that there was not any prejudice.[17]The Applicant confirmed to the Tribunal on 19th December 2024 that no replies had been received in response to their bundle, which had been sent on the 18th November 2024. THE DETERMINATION[18]The Tribunal has jurisdiction to dispense with consultation under Section 20ZA (1) which provides the Tribunal may do so “if satisfied that it is reasonable to dispense with the requirements”.[19]The only issue for the Tribunal to consider under section 20ZA is whether or not it is reasonable to dispense with the consultation requirements. The application does not concern the issue of whether any service charge costs resulting from the contracts are reasonable or indeed payable and it will be open to lessees to challenge any such costs charged by the Applicant under section 19 of the Act, if, for example they did not believe the Applicant was entitled to charge for utilities under the terms of their occupancy agreement.[20]This was confirmed by HHJ Huskinson in the Upper Tribunal who considered the jurisdiction for prospective dispensation under s20ZA in the case of Auger v Camden LBC [2008]. The Upper Tribunal confirmed that the Tribunal has broad judgment akin to a discretion in such cases. The dispensation should not however be vague and open ended. The exercise of discretion to grant dispensation requires the clearest of reasons explaining its exercise[21]Dispensation was considered in depth by the Supreme Court in Daejan v Benson [2013] UKSC14 which concerned a retrospective application for dispensation. Lord Neuberger confirmed that the Tribunal has power to grant a dispensation on such terms as it thinks fit, providing that the terms are appropriate in their nature and effect.[22]At paragraph 56 Lord Neuberger said it was “clear” that a landlord may ask for dispensation in advance for example where works were urgent, or where it only becomes apparent that it was necessary to carry out some works whilst contractors were already on site carrying out other work. In such cases it would be “odd” if the (LVT) could not dispense with the Requirements on terms which required the Landlord, for instance(i) to convene a meeting of the tenants at short notice to explain and discuss the necessary works, or(ii) to comply with stage 1 and/or stage 3, but with (for example 5 days instead of 30 days for the tenant to reply.[23]Lord Neuberger also confirmed that conditions could be imposed as to costs, aside from the Tribunal’s general powers to award costs, (which at that time were limited), drawing a parallel to the Court’s practice to making the payment of costs a condition of relief from forfeiture.[24]The correct approach to prejudice to the tenants is to consider the extent that tenants would “relevantly” suffer if an unconditional dispensation was accorded. The Tribunal needs to construct what might happen if the consultation proceeded as required - for instance whether the works would have cost less, been carried out in a different way or indeed not been carried out at all, if the tenants (after all the payers) had the opportunity to make their points.[25]The Tribunal is satisfied that the works were urgent given the potential for damage to the Property, and were carried out expeditiously for the benefit of all leaseholders, and making use of scaffolding that was already erected for cladding works, resulting in savings estimated by the Applicant to be between£70,000 and £100,000.[26]The request for dispensation was made sometime after the works were completed. No leaseholders submitted any reply form to the Tribunal, or sought to have any involvement in this application.[27]In all the circumstances, dispensation from consultation is granted.[28]This judgement does not address whether the costs are either payable, under the terms of the lease, or reasonable in terms of amount and quality of works, and any leaseholder who has concerns in any of those respects has a right to apply to the Tribunal pursuant to s27A Landlord and Tenant Act 1985. Tribunal Judge J Murray LLB 14 February 2025 Annex A - Leaseholders Apartment 101, The Box Works Ms Kathryn Gates & Mr Thomas Stamp Apartment 102, The Box Works Mr Robert Morris Apartment 103, The Box Works Mr Harrison Chidlow & Miss Hannah Stedman Apartment 104, The Box Works Mr Matthew Oakes Apartment 105, The Box Works Mr Daniel & Mr David Johnson-Burrows Apartment 106, The Box Works Mrs G Jayaram Apartment 107, The Box Works Mr David Clough & Ms Isabella Todd Apartment 108, The Box Works Mr Paul Normandale Apartment 109, The Box Works Mr T Bloxham Apartment 201, The Box Works Mr James Parker Apartment 202, The Box Works Rajiv Darryl Sethi Apartment 203, The Box Works Mr Ben Wolstenholme Apartment 204, The Box Works Ms Maeve Hanley Apartment 205, The Box Works Mr P Langslow Apartment 206, The Box Works Mr A Constable Apartment 207, The Box Works Mr Samuel Turnock & Ms Emma Welsh Apartment 208, The Box Works Mr Anand Patel & Ms Lisa Mistry Apartment 209, The Box Works Mr Adam Falk & Ms Zosia Bredow Apartment 210, The Box Works Mr R Devlin Apartment 211, The Box Works Mr N Cornish Apartment 212, The Box Works Ms J Bobbett Apartment 213, The Box Works Mr Simon Lewis & Ms Sarah Jarvis Apartment 214, The Box Works Kevin Bolton Solicitors Ltd. Apartment 215, The Box Works Timber Wharf Mgmt Ltd. Apartment 216, The Box Works DHH Boxworks Manchester Ltd. Apartment 217, The Box Works Mr Anish Nambiar & Ms Margaret Jones Apartment 301, The Box Works Mr M Fitzgibbon Apartment 302, The Box Works Mrs J Dronsfield Apartment 303, The Box Works Edge Worldwide Logistics Ltd. Apartment 304, The Box Works Mr R Harrison Apartment 305, The Box Works Mr Matthew O'Driscoll Apartment 306, The Box Works Mr B Rustage Apartment 307, The Box Works Ms Phillipa Rustage Apartment 308, The Box Works Mr Stephen & Mrs Serena Fylan Apartment 309, The Box Works Mr J Godfrey Apartment 310, The Box Works Ms W Wright Apartment 311, The Box Works Mr Graham Allanson Apartment 312, The Box Works Mr Benjamin & Mrs Laura Schofield Apartment 313, The Box Works Mr P Taylor Apartment 314, The Box Works Mr S Norbury & Mr B Norbury Apartment 315, The Box Works Mr S Norbury & Mr B Norbury Apartment 316, The Box Works Mr Gary Ingley Apartment 317, The Box Works Mr O Gardner Apartment 401, The Box Works Fermi Ying Ngai Hon Apartment 402, The Box Works Mr Sehar Anwar Apartment 403, The Box Works Miss Clara Borg Apartment 404, The Box Works A Dickinson & A Ferguson Apartment 405, The Box Works Mr T Bloxham Apartment 406, The Box Works Mr Marc Withington Apartment 407, The Box Works Mr Georgie Mathers Apartment 408, The Box Works Mrs N Illing Apartment 409, The Box Works Sadiye Allsop & Birsel Kaplan Apartment 410, The Box Works Mr Matthew Hayes & Mr Robert Glover Apartment 411, The Box Works Mr S Ashurst & Miss L Ashurst Apartment 412, The Box Works Mr William Butterwick Apartment 413, The Box Works Dr Madeline Dodds Apartment 414, The Box Works Dr Emma Johnson Apartment 415, The Box Works Mr G Perkins Apartment 416, The Box Works Ms K Hutson Apartment 417, The Box Works Mika Kowalewicz Apartment 501, The Box Works Mr Robin Portner Apartment 502, The Box Works Mr Martin Nutter & Ms Anu Kumaresan Apartment 503, The Box Works Ms Zoe Bolton Apartment 600, The Box Works Mr T Bloxham Apartment 506, The Box Works Mr Daniel Wordsworth & Ms Carys Stockton Apartment 507, The Box Works Mr Craig Lucas Apartment 508, The Box Works Mr Patrick Doyle Apartment 509, The Box Works Mr Savlatore Plano Apartment 510, The Box Works Mr Marc Cox Apartment 511, The Box Works Ms Candice Heaney Apartment 512, The Box Works ANE Properties Ltd. Apartment 601, The Box Works Mr J & Mrs R Ruparelia Apartment 602, The Box Works Mr Simon Ng Apartment 603, The Box Works Mr T Bayne Apartment 604, The Box Works Mr Lee Connolly Apartment 605, The Box Works Mr M Wilson Apartment 606, The Box Works Mr Simon Jack & Ms Harriet Atkin Apartment 607, The Box Works Mr Gareth Friday Apartment 608, The Box Works Ms Lisa Ashurst Apartment 609, The Box Works Mr Earley & Miss Price-Salisbury Apartment 610, The Box Works Mr D Murphy Apartment 611, The Box Works Mr Brent Norbury