Further Building Safety Success for JB Leitch

Success for JB Leitch at the First-tier Tribunal in a section 20ZA application in respect of cladding and fire protection works.

 JB Leitch’s dispute resolution and litigation team have further consolidated their position as leading legal experts in matters relating to building safety, with a recent high value case success at the First-tier Tribunal. In this article, Trainee Solicitor Lauren Walker reviews the details of the case, specifically in regard to the number of contributing factors as to why dispensation of the consultation requirements under section 20 was required in respect of major fire safety works.

 Background

The case concerned a property consisting of two similar blocks of residential apartments, each building comprising 12 storeys including the car park level and exceeding 30 metres in height. Our client, the Applicant, obtained reports on any fire risks present in the Property arising from its construction and/or cladding materials. Findings confirmed that there were aspects of the Property which presented a fire risk, and which required remediation according to guidance issued to freeholders under the government’s “Advice for Building Owners of Multi-storey Multi-occupied Residential Buildings” issued on 20 January 2020 (now withdrawn) and “The Building Safety Fund (BSF) for the remediation of non-ACM Cladding Systems - Fund Application Guidance” first issued in May 2020 and subsequently updated and the deadlines revised to allow more time enabling our client to obtain proposals from three potential contractors with a view to submitting its claim for funding as expeditiously as possible.

In respect of the works recommended within the reports (which are expected to cost over £9m), our client made an application to the Tribunal for dispensation from section 20 consultation requirements because (a) the works are required in order to safeguard the residents and the Premises against the risk of fire, (b) the Design & Build procurement method for the works is not compatible with the strict requirements of consultation under section 20 and (c) our client is progressing an application to the Building Safety Fund which it does not wish to prejudice in any way (which could occur in the event that our client was required to re-consult). Within the application, which was made in July 2021, reference was made to the time constraints imposed by the BSF Guidance, the nature of the first come first served availability of funding and that the costs of any Works which might be deemed by the BSF administrators to be ineligible, unless chargeable to a third party, would be payable by the leaseholders through the service charge.

Part of the Works, relating to rendering the walls of the buildings, was initially rejected by the BSF and an appeal was lodged.

Our client’s application was opposed by two leaseholders. The Respondent leaseholders contended that they did not consider that there was any increased fire safety risk, and submitted that there was no urgency which prevented the Applicant from following the full section 20 consultation procedure. Further, an application under section 20C of the Act was made seeking an order that our client would “bear the costs of the application and these would not be borne by the Leaseholders.”

 The Law

Section 20(C) states “(1) a tenant may make an application for an order that all or any of the costs incurred or to be incurred by the landlord in connection with proceedings before [the Tribunal] are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant....” The Tribunal may make such order on the application as it considers just and equitable in the circumstances.

Section 20(Z)a states that “Where an application is made to the appropriate Tribunal for a determination to dispense with all or any of the consultation requirements in relation not any qualifying works......the Tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.”

As the leading authority, the Daejan Investments Ltd v Benson and others (2013) UK SC14 case provides guidance as to the correct approach to the grant or refusal of dispensation, in that the consultation requirements are not an end in themselves: they are intended to protect tenants from paying for inappropriate work or from paying more than would be appropriate. If the tenants claim that they have suffered, or would suffer, some relevant prejudice as a result of the landlord’s failure to consult then they must identify such prejudice. Therefore, the Tribunal determined to focus on whether the tenants would be prejudiced if the consultation is not carried out.

 The Decision

Importantly, the Tribunal found that there was no evidence that the leaseholders would be prejudiced by an order dispensing with compliance with the consultation requirements set out at section 20 of the Act. To the contrary, the Tribunal commented that the actions of our client (which have rendered it impossible for them to follow the consultation procedure) are designed to make the building safe as soon as possible and to save the leaseholders from at least part of the contribution to the cost.

The Tribunal accepted that following the Grenfell disaster, a new awareness of flammable materials and fire risks has arisen and needs to be addressed to ensure so far as possible the safety of those living in high rise buildings. The Tribunal also accepted that the perceived urgency in addressing these issues, together with the BSF procedures for applying for funding, rendered it impossible for our client to consult in accordance with section 20 of the Act before proceeding on the basis of a successful tender.

The Respondents application under section 20C of the Act was refused meaning that the Tribunal was not satisfied that an order preventing the landlord from recovering its costs of the application via the service charge, would be just or equitable.

Although potentially subject to appeal the case also serves to highlight that issues of whether the Works will be properly undertaken by the landlord, and whether the costs and fees are reasonable and payable under the service charge, should be part of a separate application under section 27A of the Act and were outside the Tribunal’s scope in this matter.

If you would like to discuss this article, or have any questions relating to building safety matters, visit our Building Safety section here or contact us directly at: BuildingSafety@jbleitch.co.uk