Waterside Apartments, St James’ Court, West Accrington BB5 1NA MAN/30UG/LSC/2021/0044
DECISION
[1]32 The Tribunal has two questions to answer: Firstly, are the charges that are subject of these proceedings properly to be regarded as service charges and recoverable, in principle, under the terms of the lease, or do they fall outside those terms? Secondly, if that is decided in favour of the Applicant, are the charges that are indeed incurred, reasonably incurred at reasonable cost and work done to a reasonable standard? So far as that standard is concerned, there is no issue raised as to the quality of the AVO or alarm system and no suggestion raised that the waking watch was in any way substandard.[2]33 The Tribunal takes the view that the answer to the first question is straightforward. Recoverable charges are those relating to the Services (listed in the lease in Clause 1), or incurred in complying with all laws relating to the retained parts (again, Clause 1).[3]34 The waking watch falls within that second limb. The Regulatory Reform (Fire Safety) Order 2005 imposes a duty to take appropriate steps to protect occupiers and prevent fire or the spread of fire. The statement of case for the Respondents suggests that the Applicant did not need to impose the waking watch to comply with the law. In one sense that may be correct, but it had to do something. It had a choice. Compliance would involve either a waking watch or the closing of the building.[4]35 Furthermore, the Tribunal is satisfied that the waking watch falls within sub-clause (i) of the definition of services. It is clearly something that is a service or amenity provided by the landlord, in the interests of good estate management, for the benefit of tenants and occupiers of the building. The decision is not a capricious one. It has been carefully considered in the interests of good estate management as benefitting those tenants or occupiers. That is a reasonable decision when seen against the alternative and the inconvenience that would cause.[5]36 Insofar as the matters of the AOV and the alarm system are still to be considered within that same first question, it is the Tribunal’s view that they too satisfy the test as t0 being services provided that benefit tenants and occupiers of the building by providing fire security in what would otherwise be an unsafe building. The fact that the Respondents’ statement of case argues that they relate to improvements or to works other than the common parts is negated by the provision of these services as a comprehensive package to meet the obligations of the enforcement notice (where they are specified works in any event) and the Fire Safety Order.[6]37 Having answered that first question so as to determine the waking watch charges do constitute a service within the terms of the lease, are the charges for this reasonably incurred at reasonable cost?[7]38 Undoubtedly, to the Tribunal’s mind the principle of the waking watch is reasonable, and the way in which the Applicant chose to set it up as an immediate response to the enforcement notice was a reasonable one. The costs are also reasonable from the perspective of working hours required and the hourly rate therefore, At some point then does something, or series of things, take the costs over the Rubicon to unreasonableness? What are the individual, or collective effect of:• The apparent length of time needed to finalise the DFC report• The “pausing” of work from November 2019 to February 2020• The change-over in management from Urban Bubble to RMG• The increase in charges after the change of waking watch contractor• The 4-month delay from May to September 2020 to commission and certify a system that was almost completely installed?[8]39 On the strength of the evidence it heard the Tribunal is not at all convinced that work actually commenced and was then paused in November 2019. The Applicant’s statement of case suggests work started in February 2020. This would coincide with the views that funding needed to be put in place and might also reflect the reality of the management change over, particularly when the email chain from Megan Gibson, to which the Tribunal was referred, ramps up in January 2020.[9]40 Looking at the time taken to finalise the DFC report, with version 6 appearing in October 2019, the explanation given is that time needed to be taken to consider changing guidelines and engage in some reduced consultation exercise (paragraph 20, above). The Tribunal has some sympathy with that position and there appears to be no doubt that 5 earlier versions of the report have existed. The Respondents are put in a difficult position. They can point to a delay, but they cannot clearly identify a cause sufficient to evidence unreasonableness, or suggest what would be a reasonable alternative.[10]41 In the light of the Tribunal’s observations in paragraph 39, it assumes that possibly limited scoping work, and only that, may have taken place immediately after the report from DFC, but the issue of securing funding was no doubt a genuine one and to do that within the timescale of November to February is not unreasonable. The changeover in management is then a non-issue, particularly if the evidence the Tribunal heard as to co-operation between the agents is correct. Although questioned upon it, both witnesses were clear on that point and there is no evidence to suggest otherwise.[11]42 Conceivably, installation of the alarm between February and May 2020 matched or improved upon the view of DFC as to a 3-month timescale, but there is then the further period of 4 months to complete installation in individual flats, test the system, including a test emergency evacuation, and achieve certification.[12]43 The Tribunal notes an email from Ms Gibson to all leaseholders exhorting co-operation in enabling access to apartments and providing contact details to assist. The Applicant does what it can. It cannot secure access in the absence of speedy responses. Covid was mentioned in passing in the hearing. This is all happening at time of lockdown or the early escape from lockdown. Even in the absence of any further difficulties the pandemic might have provided, there is no evidence provided to suggest that the Applicants have brought the delay upon themselves at this point. No evidence is brought to the attention of the Tribunal that there has been unreasonable delay for which the Applicant is responsible.[13]44 Against that background the Tribunal is satisfied that the costs of the waking watch are reasonably incurred in principle when the decision is taken to impose it. Nothing that the Tribunal has seen suggests that those costs become unreasonable by virtue of what happens between June 2019 and September 2020 in the circumstances that are presented to it. Even the increase in costs caused by the change of contractor is explained by the fact that the first contractor does not work with RMG.[14]45 The Tribunal therefore determines that the costs in respect of the waking watch are reasonable and are reasonably incurred.[15]46 There remains outstanding the application under Section 20C Landlord and Tenant Act 1985. Within the definition of service costs in Clause 1 of the lease is paragraph (b):[16]The reasonably and properly incurred costs fees and disbursements of any manging agent or other person retained by the landlord to act on the landlord’s behalf in connection with the building or the provision of the services…[17]47 This would appear to encompass the managing agents’, solicitor’s and Counsel’s costs in these proceedings being part of future service charge costs in respect of which the Respondents are entitled to seek an order for the benefit of all those respondents that are party to the proceedings.[18]48 In relation to any administration charges that might be the subject of proceedings under Schedule 11, paragraph 5 Commonhold and Leasehold reform Act the Tribunal noted in the course of consideration of this matter that such charges might arise under Paragraph 7 of Schedule 4 to the lease, but that the charges mentioned do not encompass any arising within proceedings before this Tribunal.[19]49 The Tribunal therefore invites the Applicant to:• provide any statement it wishes to provide opposing the Respondents application under section 20C Landlord and Tenant Act 1985 and serve the same upon the Respondents by 5pm Friday 2oth October 2023, with a copy to the Tribunal, by electronic means.• Identify within the statement any provision within the lease by which any administration charge may be payable by the Respondents within these proceedings, in the absence of which the Tribunal will make a protective order under Schedule 5, paragraph 11.[20]50 The Respondents may provide any statement in response that the wish to make and serve the same on the Applicant’s solicitors, by 5pm 10th November 2023, with a copy to the Tribunal, by electronic means.[21]51 The Tribunal will then consider if any further direction is required, but then set down the matter down for consideration upon the papers: that being a suitable means which it considers appropriate for disposal of the matter.[22]52 If either party wishes to seek a hearing in respect of these applications, it must notify the Tribunal in writing by 5pm Friday 17th November 2023.