There are number of statutory (and contractual) restrictions on the recovery of service charges.
One of those statutory restrictions is section section 20 of the Landlord and Tenant Act 1985. This means that section 20 restricts the recovery of contributions from leaseholders unless either:
- consultation is undertaken; or
- dispensation from consultation is granted by the First Tier Tribunal (Property Chamber) (or Leasehold Valuation Tribunal where the property is located in Wales).
Non-compliance with the consultation requirements
The consequences of non-compliance can be severe. For this reason, it’s important to either consult or obtain dispensation.
A failure to consult (or obtain dispensation from consultation) caps the contribution due from leaseholders. It’s £250 per leaseholder where the service charges relate to qualifying works. And £100 per leaseholder per financial period where the service charges relate to a qualifying long term agreement (or QLTA for short).
Unable to consult?
Sometimes, it’s just not possible to consult with leaseholders. Maybe the works are urgent. Or maybe you can’t provide a notice of estimates (sometimes called a paragraph (b) statement) because you can only provide details for one contractor.
We can help with an application to the Tribunal for dispensation from some (or all) of the consultation requirements.
Failed to consult?
Perhaps it’s a mistake. Or perhaps it’s oversight. In the event there’s been no consultation, the financial consequences are severe.
It can be a potentially costly error, because without dispensation, section 20 will “bite”. This means it will limit the contributions from leaseholders.
Application to the Tribunal
Whether you’re seeking dispensation from consultation in advance, or seeking dispensation from consultation after the event, our team of experts are on hand to assist and represent you throughout the process. We have a proven track record in securing dispensation for our clients.
