© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
The Supreme Court decision in Daejan Investments Limited v Benson covers the circumstances in which the LVT can dispense with the consultation provisions pursuant to Sections 20 and 20ZA of the Landlord and Tenant Act 1985 (“the Act”). For the facts of the case, see the news article on the front cover of this issue.
JPC Law represented one of the Respondent Leaseholders.
In his judgment, on behalf of the majority, Lord Neuberger makes clear actual prejudice to the tenant must be identified; a failure to comply with the Regulations does not, of itself, constitute prejudice.
The majority agreed with the Court of Appeal that the financial consequences to the landlord of not granting dispensation and the nature of the landlord are irrelevant factors.
The majority recognised it may be difficult for the tenant to establish actual prejudice but once the tenants have shown a reasonable case for prejudice, the LVT should take a sympathetic approach to the tenant.
Until now it was thought the only options open to it were to grant or refuse dispensation. The judgment establishes the LVT may now grant dispensation on terms, which gives the LVT greater flexibility. This could include the payment of compensation to the tenant for any loss suffered. In this case compensation of £50,000 (previously offered by Daejan) was ordered. Compensation should extend to the costs incurred by the tenants in opposing applications and investigating prejudice.
In summary, the Supreme Court’s decision represents a significant change in the way applications for dispensation are going to be considered by the LVT in the future. The belief the LVT had a completely unfettered discretion and could treat any serious departure from the consultation process as a ground for refusing dispensation by itself, is no longer correct. The Supreme Court have confirmed, however, that the LVT can grant dispensation on terms.
By looking at the wider purpose of the legislation, the Supreme Court, in its majority decision, appears to have sought to overcome a concern that refusing dispensation may create a conflict between giving tenants a windfall for which they have not paid and seeking to protect the tenant who has suffered actual prejudice and ultimately is going to pay for the work. The principle is that the tenants should be put in the position they would have been in had there been no breach of the Regulations.
Evidently the courts have tried to identify an approach that will be consistent for both landlord and tenants to understand how the courts and tribunals will deal with and exercise their jurisdiction to dispense. Has this really now been achieved?