January 2018

On 24th January the First-tier Tribunal (Property Chamber) (FTT) handed down its decision in “E & J Ground Rents No.11 LLP various leaseholders of Fresh Apartments, Salford”

Finding in favour of the freeholders, E & J Ground Rents No.11 LLP (EJ), the FTT decided that the cost of providing fire marshals for a “Waking Watch” is recoverable through the service charges under the terms of the lease in this case.

Background

Following the fire at the Grenfell Tower on 14th June 2017 concerns were raised in respect of all high-rise buildings erected with similar external cladding. Subsequently, the then Department for Communities and Local Government (DCLG) issued initial written guidance on cladding testing. A cladding sample supplied in respect of Fresh Apartments was tested and classified as “Category 3”.  This meant “that it has no flame retardant properties.”

Shortly after the initial guidance was published, DCLG outlined to local authorities and housing associations the actions considered necessary by an independent panel of experts in relation to “interim mitigating measures {that} must immediately be implemented to ensure the safety of residents, pending the removal of the cladding. Endorsed by the National Fire Chief, the advice outlined that if the building is not protected by a suitable suppression system consideration must be given to the need for interim measures and that among others they must consider:

“Provision of a fire watch by appropriately trained patrolling security officers/wardens”.

This led in many cases to interim fire protection measures including a “Waking Watch” being put in place either pending further test results or as a direct result of those tests.

A “Waking Watch” was implemented at Fresh Apartments following a telephone conversation between the managing agents for the building and the Greater Manchester Fire and Rescue Service (“GMFRS”) and involved two staff members being on site for 24 hours a day and taking it in turns to patrol the building. Whilst EJ was not specifically directed to provide a Waking Watch this was the chosen means to satisfy the freeholder’s statutory obligations under the Regulatory Reform (Fire Safety) Order 2005 (2005 Order) and an Action Plan drawn up with the Greater Manchester Fire and Rescue Service.

What did the FTT have to decide?

This case focused on the costs of the Waking Watch and their recovery from the leaseholders of Fresh Apartments as service charges.  However, the tribunal was also asked to:

  1. consider if the waking watch was a Qualifying Long Term Agreement (QLTA);
  2. order that the costs incurred by EJ in coming to the tribunal should not be recouped from the service charges; and
  3. order that EJ pay the leaseholders cost in the FTT as the former had been unreasonable in taking the matter to the tribunal.

What happened?

In arguing that the costs of the Waking Watch are recoverable through the service charges the freeholder cited a lease clause which reads as follows:

“Complying with the requirements and directions of any competent authority and with the provisions of all statutes regulation orders and bye-laws made thereunder relating to the Building in so far as such compliance is not the responsibility of the lessee or any of the lessees of the Properties”.

The FTT conclusions:

  1. That the cost of providing fire marshals is recoverable from the flat owners under the terms of their lease as part of their service charges. The Tribunal also concluded that it was reasonable for the freeholder to incur the cost as “it is hard to see how the Applicant’s actions could not be seen as reasonable.”
  2. The Tribunal did not find the costs excessive in the circumstances and understood that “immediate and emergency cover will always be more expensive than that competitively sourced with a reasonable notice period”. It felt it was a reasonable action to take to avoid the Building and its occupants not being properly covered for insurance purposes and so comply with the obligation to take out and keep in place insurance for the Building.
  3. The Tribunal decided that “Waking Watch” was not a QLTA. It reasoned that the agreement is for a defined term of one month and renewed on a month to month basis evidenced by the raising of a new purchase order number each month. It felt that there was no evidence to suggest EJ and its contractors intend to extend it beyond 12 months ;and it is not a rollover contract, but a fresh one each month.
  4. On costs, the Tribunal decided that in light of its findings it would not be just and equitable to prevent EJ recouping its costs through the service charges; and refused to make a cost order against EJ as it had not acted unreasonably.

Why is this decision important?

This is the first known FTT decision to consider the recovery of Waking Warden’s costs following the Grenfell fire. The clause in question may be widespread, and whilst this decision is not binding on other tribunals it points to arguments that may be put to leaseholders and/or tribunals to seek to recover such cost from service charges.

Further Information:

About LEASE’s Fire Safety service

 

 

LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.

This website uses cookies to improve your experience. Tell me more Accept