A failing roof, asbestos and a consultation that was rushed
Northgate Wharf is a 1970s block of 46 flats. In January a surveyor reports that the asphalt roof covering is failing and that the roof deck contains asbestos insulating board. The landlord's surveyor recommends full replacement within twelve months at £318,000, plus £28,000 for removal by a licensed contractor, and notes that two top-floor flats already have damp. The landlord wants work to start in April. You serve a notice of intention that names only the landlord's own maintenance company as the proposed contractor and gives leaseholders 14 days to inspect and nominate alternatives. A leaseholder objects and asks for three competitive quotes. The landlord replies that it will 'apply for dispensation' and that in any event the £28,000 asbestos removal is not qualifying works because it is a health and safety matter. Leaseholders are now refusing to pay the interim charge.
1. Assess the validity of the consultation and the consequences for recovery. Is the landlord right that the asbestos removal falls outside the consultation regime?
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The consultation is defective, and the asbestos point is wrong.
Threshold. The works total £346,000 across 46 flats - roughly £7,500 per leaseholder, far above the £250 per-contributing-leaseholder threshold that makes them qualifying works. Statutory consultation is therefore mandatory; dispensation is the exception, not the starting point.
Process defects. The notice of intention must describe the works and invite leaseholders to nominate contractors within a period of at least 30 days. Two things are wrong here:
- 14 days is shorter than the statutory minimum - a clear non-compliance;
- naming only the landlord's own company is not the same as inviting nominations. The landlord may include its own nominee, but it must still invite and consider others.
The further stages are also missing or at risk: obtaining estimates, issuing a statement of estimates (with the lowest estimate and, where the landlord or an associate is proposed, a breakdown), the 30-day observation period, and having regard to observations.
Consequence. Where the requirements are not met and no dispensation is granted, the recoverable amount is capped at £250 per leaseholder. On these figures the exposure is roughly £7,250 per flat - over £300,000 across the block.
Asbestos. Removing asbestos-containing material as part of a roof replacement is a cost of repairing and maintaining the building, and it is qualifying works like any other. Being driven by a health and safety duty does not exempt it; the regulations contain only narrow exceptions (for example where the need for works is so urgent that consultation is impracticable), and damp penetration does not meet that bar. Splitting the removal into a separate contract to get under the threshold would be treated as one course of works and would look like deliberate avoidance.
2. The landlord says it will apply to the tribunal for dispensation. Should it, what will the tribunal consider, and what is the better practical route given the damp?
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Advise on the odds honestly, then offer a route that actually works.
The tribunal starts from the position that consultation is mandatory and looks at factors such as: whether the leaseholders were prejudiced; whether the failure was deliberate or reckless; whether the landlord did everything it reasonably could; whether dispensation leaves the leaseholders worse off; and whether dispensation is the lesser of two evils. Here the failures are serious - a sub-statutory nomination period, a single related contractor, and a warning that was ignored - and the leaseholders lost a real opportunity to nominate and to see competitive pricing. Dispensation may be granted on conditions (an independent specification review, post-hoc tendering, publication of returns), but it is not a formality, the landlord's costs are at risk, and a refusal leaves the £250 cap in place.
Better route: restart a compliant consultation now, with a proper 30-day nomination period, and run it to a strict timetable so that the works still start this year. In the meantime:
- carry out only works needed to prevent further damage - make safe, temporary covering, internal drying - under a separate, genuinely limited instruction, and document why;
- keep the leaseholders informed of the timetable and of the surveyor's report, and hold a meeting;
- consider offering independent scrutiny of the specification and price, which converts an objection into an audit.
Advise the freeholder in writing of the recovery risk and of the option to fund any shortfall itself rather than pass it to leaseholders. Also check the reserve position: if a reserve exists, explain how it will be applied and what the cash call will be.
3. Two leaseholders are withholding the interim charge in protest and others have asked what the asbestos means for them. How do you handle both?
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Withholding. The leaseholder's proper remedy is to pay and challenge, or to apply to the tribunal - not to withhold the whole charge - but in practice the tribunal rarely penalises a tenant who withholds a genuinely disputed sum. Your position should be:
- do not escalate to forfeiture; that would be disproportionate and risky;
- issue each objector a clear statement showing what has been demanded, what is disputed, and what is not;
- consider whether the interim estimate can be reduced while the major works are uncertain, and re-issue it if so;
- keep providing services and say so - services are not suspended because of a payment dispute.
Asbestos communication. Your firm is likely to be the party with day-to-day control of the common parts, so the duty to manage under the Control of Asbestos Regulations 2012 falls on you in practice. That means an asbestos register and survey, a management plan, labelling where appropriate, and informing contractors before they start work - no contractor starts on that roof deck without the survey and a permit-to-work arrangement. Tell residents: what was found, where it is, why it is safe while undisturbed and sealed, what the contractor will do and when, and who to contact. Avoid both alarmism and the phrase 'no risk'. Keep the register and the survey in the handover pack for the next manager.