The Upper Tribunal has considered a s.20ZA application for dispensation from consultation requirements following urgent works. Kimberley Ziya looks at the lessons from the ruling.
The Upper Tribunal handed down judgment recently in the case of Marshall v Northumberland & Durham Property Trust Ltd  UKUT 92 (LC). The appeal concerned an application for dispensation made by a landlord after having undertaken urgent boiler works without having complied with the consultation requirements prescribed by s.20 of the Landlord and Tenant Act 1985. The First-tier Tribunal (“FTT”) had granted unconditional dispensation to the Landlord.
The test to be applied on such applications was summarised by the Supreme Court in Daejan Investments Ltd v Benson  UKSC 14 and has more recently been considered and applied by the Court of Appeal in Aster Communities v Chapman  EWCA Civ 660. However, neither court specifically considered the situation where a landlord has been obliged to undertake works urgently, prior to having complied with the necessary consultation process or having sought dispensation in advance.
The Upper Tribunal set out a two-step process to considering an application for dispensation (at ):
- The Tribunal must “systematically identify the steps which the [landlord] had taken and those which it had omitted and for which it required dispensation”.
- The Tribunal must then “ask itself in terms what was the consequence of those steps not having been complied with”.
The FTT’s failure to follow these two steps was an error of law.
The Upper Tribunal held that, in assessing the consequences of failing to take particular steps: “It must of course be recognised that the landlord is likely to be under contractual or regulatory obligations to provide an essential service or to carry out works to make premises or service installations safe, as it was in this case”. However, “such obligations are part of the background to the whole of the statutory regulation of service charges and cannot be a reason for disregarding the safeguards provided for leaseholders or granting blanket dispensation simply because work was urgent” (at ).
The decision also emphasises the importance of every individual leaseholder being given the opportunity to have their views taken into account, following the decision of the Court of Appeal in Aster.
In re-making the FTT’s decision, the Upper Tribunal focused on the prejudice suffered by the Appellant leaseholder in not having received the short-form consultation provided to other leaseholders. The fact that some notice of the intended works had been given to leaseholders would have been of great significance had it been sent to all leaseholders and none of them taken the opportunity to nominate an alternative contractor in time (at ).
The upshot of the decision is that, where a landlord is faced with having to carry out urgent works to a property, the cost of which mean that the consultation requirements are engaged, it would be well advised to:
- Seek urgent advance dispensation from the First-tier Tribunal on conditions that an abridged form of consultation is adopted (as suggested by Lord Neuberger at  of Daejan); or
- If the above is not possible, to provide as much notice as possible to all leaseholders in advance of carrying out the works and to give them at least some opportunity to comment on the proposals. This will reduce the risk of leaseholders being in a position to argue that they have suffered prejudice as a result of the consultation requirements not having been fully complied with and, accordingly, increase the chances of dispensation being granted unconditionally.