A Matter of No Appeal: Dispensation from section 20 consultation requirements and the variation of multiple leases

JB Leitch acted for the Right to Manage (RTM) Company of a property, (comprised of two residential apartment blocks of seventeen storeys with 182 individual apartments), with our team securing two successful determinations at the First-tier Tribunal (FTT) for dispensation and the variation of multiple leases.

The Background

Specifically, the case focused on dispensation from all or some of the section 20 consultation requirements, in respect of qualifying works to install a fire alarm system at the property in order to reduce the extent of the waking watch in place and also to reduce the financial burden to Leaseholders by the operation of the waking watch. Secondly, we successfully argued for variation of all long residential underleases at the property, to allow inclusion of interim expenditure under the service charge clauses.

In December 2020, an application was made to the Upper Tribunal challenging the earlier outcome and seeking to appeal under S.11 of The Tribunals Courts and Enforcement Act 2007.

The application argued that there had been insufficient notice of the FTT hearing and that directions were confusing because of the consolidation of the variation application with the dispensation application, adding that the hearing was a case management hearing and that it was surprising when the substantive application was dealt with.

Outcomes & Advice

Upon review of the application for appeal, the Judge took the view that the arrangements made by the FTT were within the range of reasonable decision open to it in the management of this case and permission to appeal was refused on procedural grounds.

Key points included that the FTT had set out its reasons for taking the view that the applicant had adequate time to prepare for the hearing and it was clear that directions were being given for a determination of the matter, not for a case management hearing, in view of its urgency.

Furthermore, the substantive grounds of appeal were found to be without substance. The applicant stated that the higher insurance premium was the result of a failure in proper administration by the RTM company and that the higher premium arose from the discovery of fire safety issues at the property which was not the case. The applicant’s argument that the RTM company could have raised interim funding by way of voluntary contributions from some leaseholders was also found to be an unsatisfactory and unfair arrangement and would not remedy the omission in the lease.

Associate Katie Edwards comments: “The decision to refuse the appeal is predicated on the original need to vary the lease which arose from the need to insure the property and also to protect the leaseholders from the risk of fire. It did not give rise to any higher service charges overall and it is noteworthy, as the decision states, that the additional funds would have been payable at the end of the year in any event. It is good to see that this refusal reaffirms the rationale and reasonableness of our approach with regard to this matter.”