Case Success for JB Leitch: Dispensation from Section 20 Consultation Procedure

JB Leitch acted for the applicant landlord in its successful application to the First-tier Tribunal for dispensation from the consultation requirements under section 20 Landlord and Tenant Act 1985, in relation to fire safety works and interim measures.

The background

In this matter, JB Leitch’s client was the head leaseholder and landlord of a five-storey residential block in Ipswich comprising 25 apartments and commercial premises at ground level.

The façade of the building was found to contain potentially large amounts of combustible material forming part of the external wall system and a lack of cavity barriers or fire stopping material. The cost of the cladding remediation works were estimated at around £4m and the landlord made an application in respect of the costs of the remediation project to the Building Safety Fund. A waking watch was also implemented at the building until such a time that a common fire alarm system would be installed.

Under the Service Charges (Consultation Requirements) Regulations 2003, the landlord is required to consult with tenants in respect of qualifying works where any tenant’s contribution will exceed a sum of £250.

The landlord’s agent issued a stage 1 section 20 notice to the tenants in respect of the works to install the common alarm system. However, without having completed full consultation, a decision was made to proceed with the fire alarm installation works in order to reduce or remove the waking watch patrol which was a significant and ongoing cost to leaseholders.

The landlord’s agent had also issued a stage 1 notice to the tenants in respect of the works to the external façade. However, the landlord stated that it was unable to complete consultation due to the nature of the Design & Build contract (which, the landlord argued, did not satisfy the strict consultation requirements under section 20) and the requirements of the ongoing Building Safety fund application.

An application was therefore made by the landlord to dispense with the consultation requirements contained in section 20 of the Landlord and Tenant Act 1985. Relying on the decision in Daejan Investments Ltd v Benson and others, the landlord concluded within its application that the leaseholders would not be prejudiced by a lack of consultation; the Building Safety Fund application had been made, and undertaking consultation may result in unnecessary delay which could in turn prejudice the Building Safety Fund grant.

A group of leaseholders submitted a response to the application wherein they requested the Tribunal consider suitable conditions including:

1. Full transparency of the project and access to files to assess whether any actions were taken to the detriment of the leaseholders’ interest
2. Regular updates on any actions or application made to the Building Safety Fund and/or the contractor or design team responsible for the previous renovation works

The decision

The First-tier Tribunal granted dispensation of all of the consultation requirements in respect of the alarm installation works and the works to the external façade subject to two conditions:

1. The landlord must provide leaseholders with an up-to-date statement and an update on the progress of the Building Safety Fund claim, as well as a summary of steps taken against the original developer and/or their consultants or contractors within 28 days and at reasonable intervals thereafter; and
2. Leaseholders must be informed about decisions made in relation to the extent of the works and works progress within 28 days and at reasonable intervals thereafter.

Within its decision, the FTT accepted that the Design & Build procurement route conflicts with the simple process anticipated by section 20 and that it is unlikely to be in the leaseholders’ best interests to insist on consultation where there may be a conflict with the Building Safety Fund rules.

Advice and action for landlords

JB Leitch is pleased to have secured this decision on behalf of our landlord client.

The decision provides useful insight as to circumstances where dispensation from consultation requirements may be sought, in this case where any delay caused by consultation may conflict with the Building Safety Fund application and due to the incompatibility of the Design & Build procurement method with section 20 consultation requirements.