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Issue No. 90 Autumn 2009

Legal jottings Compiled by Philippa Turner

EG Estates Gazette All ER (D) All England Reports (Digest) PLSCS Property Law Service Case Summaries LVT LT

Leasehold Valuation Tribunal Lands Tribunal

RAC Rent Assessment Committee

Leasehold Reform Planning & Urban Development Act l993

The block in Cascades & Quayside v Cascades Freehold (2008 All ER(D) 79) contained 174 fl ats. Of these, about 150 initially indicated they wished to participate in the purchase of the freehold under the 1993 Act but, by the time it came to serve the Section 13 Notice on the freeholder proposing enfranchisement, the number had diminished to 109. Of these, only a few actually saw the Notice itself or were aware of the exact price offered on their behalf. It followed that they had not signed the notice as required by Section 99(5A) of the Act; instead, they had signed but not dated separate sheets of paper which were sent with the Notice. The Court held that the Notice was therefore invalid and the application to enfranchise accordingly failed. This all goes to illustrate the diffi culties faced in (a) obtaining consensus where large numbers of residents are entitled to participate ie at least 50% of those qualifying and (b) the danger of handling such matters without legal advice or assistance (as was the case in this instance).

An attempt in Cadogan v Erkman (2009 13 EG 144) to challenge the guidelines on deferment rates given by the LT and endorsed by the Court of Appeal in the Sportelli case (Newsletter 83, page 4) failed. It was held that adducing expert valuation evidence for such a purpose should be allowed only in exceptional circumstances: it was not in the public interest to attempt to undermine specifi c guidelines and to do so not only incurred wasted expenditure but also would result in more uncertainty and, if successful, inconsistency.

Costs in the Leasehold Valuation Tribunal

In Halliard Property Co. v Belmont Hall & others (27th January 2009) unreported, the LVT refused an application for costs on the ground it was unreasonable to request an oral hearing when the matter could be decided on the papers only. The LT allowed the appeal against this refusal holding that there was an absolute right to an oral hearing save in exceptional cases and that the party had not behaved in an unreasonable manner akin to being frivolous, vexatious, abusive or disruptive, such behaviour alone justifying a refusal of costs where they would otherwise have been awarded.

Interpreting the lease

In Douglas Shelf Seven Ltd. v the Co-operative Wholesale Society (2009 PLSCS 154) the management argued that the cost of providing security was covered by the service charge clause which allowed inter alia recovery of the general

! Legal Point “Contra Proferentum”: when deciding the disputed meaning of a lease or indeed any other document, a Court will always tend to give the benefi t of the doubt to the party other than the one putting forward the document in question and who is seeking to rely on its term or terms.

Rented sector

The tenant in Hughes v Borodex (2009 26 EG 114) had originally held a long lease which had expired. By virtue of the Local Government & Housing Act 1989 Schedule 10 (replacing Part I of the Landlord &Tenant Act 1954) such former leaseholders become assured tenants under the Housing Act 1988 and thus can be required to pay a fair rent fi xed by the RAC. When making its assessment the RAC must , by para.11 of Schedule 10, disregard any tenant’s improvements to the property and, in doing so in this case, fi xed a rent of £1,668 pm. However, the landlord in a subsequent year, as he is entitled, applied for an increased rent and, on this occasion, obtained a fi gure of £2,340 pm because, under the 1988 Act, the RAC was enabled to take into account tenant’s improvements. Unfortunately, this had the unintended (by the legislators) consequence of taking the annual rent above the then maximum of £25,000 pa entitling the tenant to the protection of the Housing Act 1988. The landlord was therefore able to serve a notice to Quit and obtain possession. The tenant would lose her home of many years and the benefi ts

of the improvements she had made in the reasonably justifi ed expectation of being able to continue to reside there indefi nitely.

The tenants in Whitehouse v Lee (2009 20 EG 103(CS) were luckier: they were protected under the Rent Act 1977 and had lived in the premises 45 years. In an effort to obtain possession, the landlord offered them suitable alternative accommodation (one of the grounds on which possession may be obtained under the Act). The tenants did not want to move and the matter was therefore referred to the Court for a decision. The Court of Appeal reversed the County Court order for possession; one of the criteria for reaching a decision is that the Court has to be satisfi ed that it is reasonable to order possession; the Court of Appeal said

professional charges of a surveyor in connection with the management and administration of the building. The Court held , taking the contra proferentum approach, that clear wording would be required to include security expenses; here all that was clear was the intention of the clause to cover only the professional fees of a surveyor.

Federation of Private Residents’ Associations Newsletter


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