Consultation process…

The Leasehold Valuation Tribunal (the LVT) in Southall Court v Tiwari reduced a landlord’s claim for service charge contributions from 48 leaseholders from £2,053.42 to £482.50 per flat. The Landlord was granted permission to appeal to the Upper Tribunal.

The landlord had fulfilled its obligations under Section 20 of the Landlord and Tenant Act 1985, the leaseholders’ however failed to comment in response to the consultation process for substantial works to the roof. The leaseholders’ claimed that the reason for failing to reply was because it was obvious that the matter would be referred to the LVT. The reason for this we assume is because in the report it is stated that “Southall Court has probably been the subject of more applications to the Tribunal than any other property in the country”. On appeal the Upper Tribunal held that where the leaseholders have failed to comment then the landlord is entitled to assume that there are no objections to the works. This is the case even where it is obvious that the matter would be referred to the LVT. The Upper Tribunal held that it was the duty of the leaseholders’ to respond during the consultation process and that in this case where no comments were made the landlord had acted reasonably throughout.

At the LVT the landlord’s expert gave evidence and confirmed that there were no current leaks in the roof and that it could have staggered on for a few more years. The LVT inspected the property and agreed with the expert’s oral evidence. However the Upper Tribunal held that the landlord had a wide discretion as to the programme of works it adopted and applying that principal to this case came to the conclusion that the LVT was not entitled to find that the landlord’s works were unreasonable. This was especially so given the expert findings that the roof had only a further 12-18 months useful life.

The leaseholders’ attempted to argue that the existence of a sinking fund was irrelevant in this matter. However, the Upper Tribunal disagreed with this and dismissed the leaseholders’ attempt to argue that given the small sinking fund it was unreasonable to carry out the works. The Upper Tribunal found instead that the fund made very little difference between the reasonableness of a decision to re-cover the roof now or in 12-18 months time.

The landlords appeal was accordingly allowed and the leaseholders’ were ordered to pay £2,053.42 each.

We have had many agents undertaking block management contact us about the consultation process and we hope that this blog emphasises how important it is for agents to advise leaseholders’ to take part and comment in time.

Filed under: England & Wales, England only, consultations, Landlord & Tenant Act 1985, long lease

Back Again….

Some of you will note that we have blogged on the Localism Bill previously and the expected changes to the Housing Act 2004 specifically the sections on the registration of deposit. The amendments were not supported by the Commons and it was assumed that alternatives would be proposed. However, no such alternatives have been proposed and Lord Best has therefore introduced the original amendments into the Lords.

The Bill started its committee stage on 20 June and given that in the House of Lords committees are always ‘committees of the whole House’, i.e. every peer is able to contribute a huge number of amendments are expected.

Filed under: England & Wales, England only, comment, consultations, deposits, Housing Act 2004

Landlords Register………

On the 14th June a Bill was introduced under the 10 Minute Rule. The Bill makes provision for a register of private landlords; to require private landlords to take certain actions in the event of anti-social behaviour by their tenants; to give additional powers to private landlords and local authorities in cases of anti-social behaviour by tenants; to establish a community fund to which private landlords must contribute; and for connected purposes

The 10 Minute Rule allows an MP to make his or her case for a new bill in a speech lasting up to ten minutes. An opposing speech may also be made before the House decides whether or not the bill should be introduced. If the MP is successful the bill is taken to have had its First reading.

The second reading is scheduled on the 18 November 2011. You will as always be kept up to date.

Filed under: England & Wales, FLW Article, comment, consultations, licensing

Trespasser

In Eaton Mansions v Stinger, Stinger appealed against a High Court decision that he had trespassed on the roof of a building when he installed some air conditioning units.

Eaton Mansions is the long leaseholder and Stinger was the sub lessee (it has now sold its interest). In 1980 Stinger had been granted permission to install air conditioning units. In 2007 and 2008 Stinger then installed further air conditioning units without obtaining the consent of Eaton or the head landlord Grosvenor Estates.

Numerous meetings were held by all three parties and their representatives about the consent for the new units, correspondence also went back and forth but Stinger still proceeded to install the units and claimed that Eaton had unreasonably withheld consent. Eaton argued that it had not unreasonably withheld consent because it was likely that Grosvenor would have refused consent and that would have then put Eaton in breach of their lease with Grosvenor.

When looking at the facts and the terms of the lease itself the Court of Appeal held that Stinger had in fact no right to install anything on the roof with or without the consent of Eaton because there was no provision in the lease for such an installation. The court also held that it would have been unreasonable for Eaton to refuse consent if Eaton was aware that Grosvenor would have consented to the units. But here Stinger knew that consent from the freeholder had not been obtained and yet Stinger still demanded consent from Eaton and then went ahead and installed the units in any event.

Grosvenor had indeed entertained Stingers proposals for the units but at best they were only prepared to offer an irrevocable licence for the units. They did not in their conduct indicate that a licence would be forthcoming and as such Eaton were entitled to be cautious when dealing with the matter.

It was therefore held that Stinger had not shown that Eaton had unreasonably refused consent for the new units and as such the appeal was dismissed.

Many agents are now managing blocks of flats such as this and are not familiarising themselves with the lease when making a decision on the running of the building. The lease is the contract between any freeholder and leaseholder and it must be referred to prior to any decisions being made to avoid expensive litigation such as this. It was due to the fact that Stinger obtained consent in 1980 that it automatically assumed that it was entitled to consent in 2007 when the lease made no provisions for such units.

Filed under: England & Wales, FLW Article, comment, licensing, litigation, long lease

BAILII appealing for funds

Some of you will no doubt be aware that in order to keep our readers up to date we use the website of the British And Irish Legal Information Institute (Bailii). The service is at risk due to sponsors indicating that they may not be in a position to continue with the financial support. Given how invaluable this free service is we hope that those who can, will pledge what they can in support.

Filed under: England & Wales, FLW Article, comment, costs

Small Claims or what?

Ministers are consulting on increasing the value of disputes that will be allocated to the small claims court from £5,000 to £15,000, or even £25,000, as part of radical shake of the court system as we know it.

The small claims track, which is not a court but a procedure within the county court is designed to serve as a low-cost, user-friendly, informal forum for resolving disputes without the need for a lawyer. A key feature of the track is that in the vast majority of cases legal costs are not recoverable from the losing party which reduces the risks for both sides and encourages economic settlement.

There have been many different opinions on this change ranging from welcoming the news because it will make it easier for consumers to take cases without the risk of exposure to costs, to the concern that a lack of legal representation will lead to inequality between the parties when one party can afford a solicitor and the opposing party can not.  

The agents reading this blog will obviously have concerns about their ability to recover small debts. When they call us for advise they are told that in most cases it is not economical to instruct us to pursue the matter on their behalf. There is also the risk that by increasing the threshold of the small claims track parties will have no incentive to settle sooner rather than later. The financial incentive to save costs rather than pursue a expensive litigation matter will no doubt be eroded. 

 However mediation assessment meetings will be made compulsory in small claims, so to a large extent mediation will become almost impossible to avoid. Agents are therefore advised to familiarise themselves with the mediation process in order to ensure the swift and cost effective resolution of future disputes. 

Filed under: England & Wales, FLW Article, comment, consultations, costs

Does it form part of the structure or not?

In Grand v Gill, the landlord had a damages and costs award made against him for disrepair.

Grand entered into an assured shorthold tenancy on the 21 November 2004. The tenancy continued thereafter on a statutory periodic tenancy. Grand occupied the property with her daughter who is now over the age of 18.

Grand made a claim against her landlord, Gill, who had a long lease interest in the property, for harassment, personal injury, breach of the quiet enjoyment covenant and disrepair.

The main concern here was the disrepair. Grand’s daughter began sleeping in the lounge due to the damp and mould in her room. There was a problem with water ingress due to a damaged roof and poor guttering. However these issues did not form part of the landlord’s demise. Finally the gas-fired boiler broke down frequently and worked inefficiently. Damages for the disrepair amounted to £5,250 with damages for the breach of quiet enjoyment standing at £350.

Grand appealed. Grand’s legal representative argued that the award for the damp failed to take into account the fact that Gill was not just in breach of his obligations in relation to the heating problems which contributed to the damp, but also the omission to repair damaged plaster.

Expert reports had been obtained and they concluded that there was damaged plasterwork in the lounge due to penetrating dampness. The report suggested that Gill needed to hack off the damaged plaster and replace. Gill did not undertake these works. If this plaster formed part of the structure of the property Gill was indeed liable for this both pursuant to the terms of the agreement and Section 11 of the Landlord and Tenant Act 1985.

The Court of Appeal held that plaster is an essential part of the creation and shaping of the ceiling or partition wall, which give a dwellinghouse it’s appearance and shape. Plaster is a constructional finish to Walls and ceilings, to which the decoration is applied. Plaster is not a decorative finish and Gill is accordingly liable.

The damages were not referred back to the lower court because they were minor in the grand scheme of things. Therefore the court assessed damages in a summary manner at £750 to replace the £600 that was awarded for the damp.

The issue of whether plaster is structural, and therefore part of the section 11 obligations, or decorative and not has been floating back and forth in the higher courts for some time without a clear answer. In the judgement itself many cases are considered but this is the first case where the issue seems to be clarified and landlords are now held accountable for damaged plaster. In many cases this is irrelevant because the landlord assumes an obligation in the lease for plaster work among other things. However, this is not always the case.

While the damages were not increased by much it is the general principle that matters. The concept that anything which is to act as a support for paint or other decorative material is structural could be applied to a number of other areas and could have far reaching effects.

Filed under: England & Wales, FLW Article, disrepair, litigation, long lease