7A Laurel Grove, Ashton-in-Makerfield, Wigan, WN4 8LJ MAN/00BW/LDC/2023/0080
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 replacement of the boiler.REASONS
[1]On 1 December 2023, 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 Jigsaw Homes Group and relates to premises known as 7A Laurel Grove, Ashton-in-Makerfield, Wigan, WN4 8LJ (“the Property”). The Applicant is the landlord for the Property. The Respondents to the application are the long leaseholders of the property. Wigan Council act for both Respondents in the capacity of the appointed Deputy for Property and Affairs.[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 dispensation is sought concern the replacement of the boiler at the Property.[5]The Respondents have been given notice of the application and have been afforded the opportunity to view the Applicant’s supporting evidence. They have also been provided with a copy of the case management directions issued by the Tribunal on 6 June 2024. The directions invited the Respondents to provide any statement they wished to make in response to the Applicant’s statement of case, within 14 days of receipt of the Applicant’s bundle of documents.[6]I have determined this matter following a consideration of the Applicant’s case, but without holding a hearing. Rule 31 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 permits a case to be dealt with in this manner provided that the parties give their consent (or do not object when a paper determination is proposed). In this case, the Applicant has given its consent and the Respondents have not objected. Moreover, having reviewed the case papers, I am satisfied that this matter is indeed suitable to be determined without a hearing: the application is unopposed and the issues to be decided are readily apparent.[7]The Tribunal did not inspect the site of the Property, but I understand it to be a three-bedroom semi-detached bungalow. Grounds for the application[8]The Tribunal is advised that between July 2023 and September 2023 the Applicant attended the property on four occasions, due to reports of no heating and no hot water. It is submitted that a gas engineer attended the property on 14 September, who reported that due to the parts required and the age of the boiler a replacement was recommended.[9]It is the Applicant’s case that due to the customers vulnerabilities, medical requirements and a lack of heating and hot water, a boiler replacement was required urgently so the consultation requirements could not be satisfied. The Applicant states that they contacted the shared owners and their Deputy at Wigan Council and explained that the Applicant could apply for dispensation rather than conducting a section 20 consultation to enable them to complete the replacement urgently. According to the Applicant, Sam Radcliffe of Wigan Council confirmed the case was urgent and agreed that Jigsaw Homes should apply for dispensation rather than follow the section 20 consultation process. The Applicant states that there were adequate funds in the sinking fund to cover the cost of the replacement and installation of the boiler. Law[10]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.[11]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.[12]“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).[13]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.[14]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[15]The Tribunal must decide whether it was 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. They also ensure that leaseholders are protected from paying for inappropriate work, or from paying more than would be appropriate for necessary work. 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.[16]It follows that, for it to be appropriate to retrospectively dispense with the consultation requirements, there needs to be a good reason why the works could not be delayed until the requirements had been complied with. The Tribunal must weigh the balance of prejudice between, on the one hand, the need for swift action 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.[17]In reaching my decision I have had regard to the fact that Wigan Council, on behalf of the Respondents, confirmed they have no objections to the application for dispensation. While the statutory consultation requirements have not been complied with, the Respondents and Wigan Council were informed of the Applicant’s intention to make an application to the Tribunal instead of following the section 20 process and they appear to support this decision. I accept from the details provided that the works have been completed and were clearly urgent, to ensure the Respondents had access to basic facilities such as heating and hot water. There is no evidence that the Respondents have been, or would be, prejudiced by the lack of compliance with the consultation requirements. I therefore conclude that unconditional retrospective dispensation should be granted.[18]Nevertheless, the fact that the Tribunal has granted retrospective dispensation from the consultation requirements should not be taken as an indication that I consider that the amount of the service charges resulting from the works is likely to be reasonable or, indeed, that such charges should be payable by the Respondents. I make no findings in that regard. Signed: J Holbrook Judge of the First-tier Tribunal Date: 10 December 2024