Fire safety works are moving quickly up the agenda for RMCs and their managing agents. Cladding issues may get all the headlines, but there are a host of other fire safety areas that need tackling – and they are often both time-critical and expensive.
As a managing agent you will be familiar with the statutory section 20 consultation process, which kicks in if any item of expenditure will cost any one leaseholder more than £250. Most fire safety projects will drop into the £250 plus bracket, not least when you factor in the costs of a qualified fire safety expert. Without consultation of course, a leaseholder’s contribution can be capped at £250, which can lead to a significant shortfall in the RMC’s funds.
Section 20 is not complicated but it is highly procedural and time-consuming, and this time factor can be an issue when works are urgent.
Fire safety projects and time to consult
At Brady Solicitors we are working with clients on a number of time-critical fire safety projects, some prompted by growing fire safety awareness, and many as a result of a leaseholder needing to secure an EWS1 certificate to sell their property.
The remedial works needed range from modernising the fire doors, through to clearing basement areas of fire hazards, balcony safety – even replacing wooden decking. As with many major works projects, they can be contentious as not all leaseholders will benefit equally. For example, the fire doors in one part of a block may not need replacing, yet the obligation under the lease requires all leaseholders to contribute.
Frequently, there is also not enough time to carry out the section 20 consultation process.
So how do you tackle urgent fire safety works when you don’t have enough time to carry out a section 20 consultation?
The optimal solution is to make a section 20ZA application to the FTT for dispensation from consultation. These applications can be made in situations where the works are so urgent that there is no time to consult. If the FTT approves your application for dispensation, you then have the right to make demands for contributions from leaseholders.
Leaseholders can of course challenge a s20ZA application. Under a precedent set by the Supreme Court case of Daejan v Benson in 2013, leaseholders have had to prove that a lack of consultation had prejudiced them. Proving this prejudice is difficult though, which meant that RMCs and their managing agents were largely successful in securing dispensation from consultation.
However, in 2020, the case of Aster Communities v Chapman arguably tipped the balance back in favour of leaseholders and made life less straightforward – and more costly – when it comes to securing dispensation.
The Aster case held that it was possible for a tenant to discharge the factual burden of proving a credible case of prejudice (the prerequisite to the imposition of conditions) without calling any evidence, that a tenant should not be required to demonstrate that proposed works are inappropriate or too expensive before the FTT imposes conditions, and that it is unreasonable to expect leaseholders to get expert advice to prove prejudice in advance of a s20ZA application.
Dispensation was granted – but at significant cost to the freeholder who had to pay the costs of the leaseholders’ expert investigations.
Advice when applying for dispensation from consultation
The Aster case underlines the importance of now making sure that your application for dispensation is thorough and correct, and that it will stand up to a leaseholder challenge.
It must clearly set out a genuine reason for the expenditure and how it will benefit the leaseholders, why consultation was not carried out and should also be prepared to rebut any suggestion of prejudice to the leaseholders; you can no longer rely on leaseholders failing to prove they have been prejudiced by a lack of consultation.
Not only is this good legal practice, it is good block management practice.
Equally, when your application is approved by the FTT, we would also recommend open and extensive leaseholder communications to explain why the works are necessary and to win over support.