Major Works Consultation Dispensation

Dispensation from Section 20 consultation requirements

The background

In Pemberstone Reversions (5) Limited v Various Lessees at Cartier House [2018], the landlord of a large block of flats in Leeds made an application for retrospective dispensation of consultation requirements in respect of a block of over 120 flats in Leeds. The respondents were the owners of apartments at the block.

S.20 of the Landlord and Tenant Act 1985 applies where a landlord carries out works to a development and the contribution, paid through the service charge, of one or more residential tenants to the cost of the works exceeds £250.00.

Under s.20, the landlord must follow a consultation process with leaseholders, involving the service of various notices containing details of the proposed works. Alternatively, the landlord must obtain dispensation of the s.20 requirements from the First-Tier Tribunal (Property Chamber). Where the landlord has neither followed the consultation process nor obtained dispensation, the landlord may recover no more than £250.00 in respect of the cost of the works from any leaseholder via the service charge.

In this case, the works in question were cladding repairs costing in excess of £300,000. The landlord did not follow the consultation process due to the urgency of the repairs.

The decision

Referring to the case of Daejan investments v Benson [2013], the Tribunal considered the prejudice presented to the leaseholders by the lack of consultation. The respondents were unable to demonstrate that the works would have been completed to a better standard, or for less money, if the consultation requirements had been met, and could not state what they would have done differently. The tender process had been run independently, and the contract awarded to the lowest-priced contractor.

The Tribunal therefore granted dispensation from the requirement to conduct a consultation exercise to the landlord, observing that there was no prejudice to the respondents.

Advice and action for landlords

J B Leitch is pleased to have achieved this positive outcome for our landlord client. The independent and thorough tendering process undertaken and the urgency of the works required weighed heavily in favour of dispensation.

Landlords must remain mindful of their statutory obligations, but this case provides reassurance that, when leaseholders are unable demonstrate loss or prejudice as a result of the landlord’s failure to comply, the Tribunal will most likely be minded to grant dispensation.