Issue No. 107 Winter 2013
that it would be non-compliant. This Company satisfied the description of a RTM and the omission of the words from the title was of no effect.
Until July 1, 2013, the LVT had jurisdiction to award costs up to a cap of £500 against a party who had behaved unreasonably or in a manner to be otherwise criticised. The losing party in Curzon v Hobbs (2012 UKUT 419) acted unreasonably in that, in an enfranchisement action, he being both the freeholder and the occupier of one of the six flats in the building, had failed to disclose relevant information, namely, that he had granted himself a long lease of his own flat prior to the transaction being completed, thus affecting the purchase price and giving himself an unfair advantage. However, the LVT decided to allow him the advantage of the £500 cap, even though the case was heard after July 1, it fell within the statutory transition period.
The lease in Forest House Estates v Dakhil Allah R Al-Harthi (2013 UKUT 479) provided, as is common, that the flat floor was to be carpeted. Breach by the tenant gave grounds for the landlord to apply, as a preliminary to forfeiture, under Section 168 of the 2002 Act for a declaration that a breach had occurred. The LVT inspected and made a finding that the breach had been remedied by the provision of carpeting and the application was therefore refused. On appeal, this decision was quashed by the UT since it was not for the LVT to decide on remedy for a breach: its jurisdiction was limited to finding whether or not there was a breach; in this case the flat had been uncarpeted for four months.
Service Charges The Court of Appeal dismissed the appeal from the High Court in Arnold v Britton (2013 EWCA Civ 903) (see Newsletter 104) holding that the Court could not interfere with the bargain between the parties contained in the lease and it was not possible to construe the wording to imply some kind of limit to the amount to be paid.
Federation of Private Residents’ Associations Newsletter 13 Insurance
A provision in the lease that service charge accounts be audited could be avoided by a landlord in making the demand by way of advance payment (see Warrior Quay v Joachim Newsletter 85) should the lease authorise payment on account of future expenditure. On appeal to the UT in Wrigley v Landchance Property Management (2013 UKUT 376 LC), the LVT was overruled on the point in holding that, because insurance premiums had not been included in the landlord’s estimate for future payment, they could not be recovered until the accounts had been audited. It was further held that, since the service charge was reserved as rent, the period for claiming arrears was limited to six, not 12, years.
The cost of insurance was also a concern to the leaseholder in Riniker v Mattey (2013 EWHC 1851) and he attempted to obtain documentary evidence of the details by serving notice, in reliance on the Landlord & Tenant Act 1985 para.3(1b) of the Schedule, on the landlord’s registered office. On receiving no response, the leaseholder took a private prosecution on the landlord’s company secretary for non-compliance. The Magistrates Court dismissed the action and the Divisional Court agreed, holding that the company secretary was not the landlord and, as such, had no obligation to the leaseholder.
Landlord’s Consent The appeal in Eaton Mansions v Stinger (2013 EWCA Civ 1308) (see Newsletters 100 and 104) was dismissed. The Court of Appeal agreed that £6000 was adequate compensation since, even though it was argued that the alteration was permanent, it was not in fact so and permission would need to be renegotiated on each change of tenant. Aggravated damages could not be awarded since they were intended to compensate for injured feelings: where the party wronged was a company no such damage could occur.
LEASEHOLDERS LEFT OUT
The new board of LEASE, the Leasehold Advisory Service, has no leaseholder, or direct representative of leaseholders, on its body, much to FPRA’s concern.
FPRA’s Robert Levene was a long-standing member of the board. Richard Williams, deputy chairman of FPRA wrote to the Department of Communities and Local Government (DCLG): “We support the excellent work being done by LEASE and have noted with disappointment the unfair and unjust criticism from a very small minority of this excellent service and of its chairman.
“We congratulate you on the appointment of two new directors to the board and hope they can assist in the further development of the service, but note that for the first time since the organisation was founded it does not have, amongst its board members, a leaseholder, or a direct representative of a leaseholder organisation.
“We feel this not only can lead to further criticism by some organisations but also directly weakens the legitimacy of the board and its effectiveness. It may incidentally be construed as being in breach of the legislation under which LEASE was founded.”
Kris Hopkins MP, for the DCLG, has replied: “In response to reductions in grant support from Government, as part of our deficit reduction agendas, LEASE is now adopting a more commercial approach to its services to professionals and others working in residential leasehold. This shift in approach is helping LEASE to maintain, and where appropriate enhance, its free front-line advice and information services to the public.”
Praising Robert’s “role in fostering the organisation’s success”, he nevertheless rejected FPRA’s call for a new – leaseholder – appointment to be made, although he said he would bear the request in mind in future.
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