Upper Tribunal sets aside dispensation decisions marred by irrelevant conditions by FTT

This case pertains to a gated development of 174 flats and houses grouped around five squares near the Thames riverside. The property's tenants-increasingly-love-corporate-landlords'>landlord, Holding & Management (Solitaire) Limited, commissioned a fire risk assessment in June 2020. The survey identified concerns about fire stopping and recommended a further assessment. The risk was identified as level 4, so action was recommended within three months.

More than a year later, in July 2021, another assessment was conducted to look at the fire safety measures of the building. The report found insufficient measures to stop fires in certain areas, like the risers and loft spaces. It was recommended that the authorities quickly put a waking watch in place or install simple smoke detectors in each flat. They also suggested looking into a long-term solution, like a fire alarm system for the whole building.

The building owner hired people to keep watch, costing 10,000 each week. The bill was paid using the funds set aside for building services. They also started talking to residents about the fire alarm system. They even got quotes from different companies, but the talks didn't succeed as the owner sought the cheapest option. They explained that they planned to ask for special permission from the FTT (First-tier tenancy-agreements-made-easy'>planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>Tribunal) for the fire alarm. They were sure there would be no hindrance because the work was urgent, and getting permission would mean they could stop the expensive waking watch.

Waking watch vs battery-operated fire alarms criticised in application to Tribunal for section 20 consultation dispensation 

The FTT approved the dispensation but criticised the tenants-increasingly-love-corporate-landlords'>landlord for hurriedly opting for an expensive waking watch without considering more economical alternatives like battery-operated alarms.

Delay in application to the tenancy-agreements-made-easy'>planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>Tribunal for section 20 consultation dispensation could impact the outcome

The FTT questioned the delay in the tenants-increasingly-love-corporate-landlords'>landlord's actions after the 2020 fire risk assessment. It pointed out that the earlier investigation could have allowed for a proper consultation and potentially reduced waking watch costs.

Despite acknowledging the necessity of fire safety works, the FTT granted dispensation under the condition that waking watch costs are covered by the tenants-increasingly-love-corporate-landlords'>landlord, not the servicechargesorted.co.uk/blogs/empowering-leaseholders-in-small-blocks-of-flats'>service charge. Additionally, the dispensation is contingent on a Section 20C order. It prevents the tenants-increasingly-love-corporate-landlords'>landlord from passing legal proceedings costs to leaseholders through the servicechargesorted.co.uk/blogs/empowering-leaseholders-in-small-blocks-of-flats'>service charge.

Upper Tribunal rules waking watch costs are service charges and overturns First Tier Tribunal decision

The tenants-increasingly-love-corporate-landlords'>landlord appealed the FTT's decision to the Upper tenancy-agreements-made-easy'>planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>Tribunal (UT). The UT overturned the FTT's stipulations, concurring in the conditions imposed as irrelevant. In reviewing the tenants-increasingly-love-corporate-landlords'>landlord's appeal, the UT stressed the established test for the FTT when granting dispensation is assessing if leaseholders would suffer prejudice due to the failure to consult. The UT overturned the FTT's conditions, stating that any conditions must be relevant and address the specific prejudice to the leaseholders arising from the lack of consultation.

Upper Tribunal Ruling:  the necessity of waking watch was not the Tribunal's concern in a dispensation application

The leaseholders argued that the waking watch was integral to the works, highlighting concerns about delays in fire risk assessments and the rushed implementation of the waking watch without consultation. The UT sided with the tenants-increasingly-love-corporate-landlords'>landlord, stating that the waking watch's necessity or not was not the FTT's concern in a dispensation application.

Upper Tribunal Ruling:  cost of a waking watch is irrelevant when considering granting a section 20 dispensation for a waking watch

The UT set aside the FTT's decision regarding the waking watch costs, deeming it irrelevant to dispensation. The Section 20C order was also set aside, as it was based on the same reasoning as the irrelevant condition about funding the waking watch costs.

Upper tenancy-agreements-made-easy'>planetrent.co.uk/blog/could-a-tax-tribunal-ruling-mean-btl-investors-avoid-3-stamp-duty-surcharge'>Tribunal Ruling: test in granting a section 20 dispensation is relevant prejudice

The UT said the FTT was wrong in denying the tenants-increasingly-love-corporate-landlords'>landlord its contractual right to recover costs through the servicechargesorted.co.uk/blogs/empowering-leaseholders-in-small-blocks-of-flats'>service charge when there was no relevant prejudice to the leaseholders.

FTT criticises Holding & Management (Solitaire) Limited for waking to watch Tribunal application for dispensation of section 20 consultation

The tenants-increasingly-love-corporate-landlords'>landlord implemented a waking watch costing 10,000 per week and initiated discussions about the recommended fire alarm system. The FTT criticised the tenants-increasingly-love-corporate-landlords'>landlord for hastily choosing the expensive waking to watch without considering more cost-effective options, such as battery-operated alarms.

The tenants-increasingly-love-corporate-landlords'>landlord, Holding & Management (Solitaire) Limited, commissioned a fire risk assessment in June 2020 due to concerns identified in the initial survey about fire stopping. A July 2021 fire risk assessment identified insufficient fire safety measures, particularly in risers and loft spaces. It recommended the immediate implementation of a 'waking watch' or the installation of simple smoke detectors. A long-term solution, such as a fire alarm system, was also suggested.