Service Charge Consultation: JB Leitch succeeds in application for dispensation from section 20 consultation

JB Leitch has successfully applied to the First-tier Tribunal (FTT) on behalf of our landlord client for dispensation from the consultation requirements contained at section 20 of the Landlord and Tenant Act 1985 in respect of proposed fire safety works at a residential block. Trainee Solicitor Lauren Walker reviews the case and its outcome below.

The background

In this recent decision, JB Leitch was appointed by the landlord of a large block in Yorkshire comprising a range of 10-16 storeys. At ground level were a number of commercial units, with residential units to the upper floors.

The external wall system of the building was found to have been constructed from combustible materials, presenting a fire risk. Remedial works were required, including removal and refurbishment of balconies, removal of existing cladding materials and reinstatement of new systems. The cost of the remedial works was estimated to be over £7.4m. The landlord registered the property with the Building Safety Fund in respect of the remediation costs and proposed to proceed with works under a Design and Build contract.

Under s.20 of the Landlord and Tenant Act 1985 and 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 commenced the statutory consultation process by issuing a Stage 1 Notice of Intention to leaseholders, and provided regular updates thereafter. However, the landlord’s FTT application sought dispensation from consultation requirements on the grounds that, given the need to carry out the works as soon as possible, the potential prejudice to the BSF application and the nature of the Design and Build contract, it would not be practicable to comply with the statutory requirements.

The landlord stated in its application that leaseholders would not suffer any financial prejudice if dispensation were granted but that if dispensation is not granted, any potential Building Safety Fund funding could be lost leaving the leaseholders responsible for higher costs.

The decision

Exercising its discretion, the First-tier Tribunal was satisfied that it was reasonable to do so and granted dispensation under section 20ZA of the 1985 Act.

The FTT agreed that works were both urgent and necessary, and due to the steps required to undertake the works, it was not practicable to complete the consultation process contained within the Act.

Advice and action for landlords

JB Leitch is pleased to have secured this further grant of dispensation on behalf of our landlord client.

The decision again supports that where leaseholders are not financially prejudiced as a result of a landlord’s inability to consult, dispensation of consultation requirements ought to be granted.