8 Federation of Private Residents’ Associations Newsletter Ask the FPRA continued from page six A
Can you advise me if there is any regulation of any kind that forbids the storage of private items of a resident in such a cupboard in a shared occupancy building? Or is it generally permitted for service cupboards to be used for such purposes if the majority of residents agree? FPRA Hon Consultant Colin Cohen replies: There are two aspects here which come to mind, one is that, although I have not seen a copy of a lease for this property, I would suspect that the cupboard outside the flat is more than likely to be a communal area and not demised to any individual property, hence it is not for the leaseholder to use solely to store their personal possessions/contents as it is not reasonable to other leaseholders. Secondly, more importantly, it would be against health and safety legislation to store any items in the cupboards which houses any power, water supply or any other services.
Late Payer We have one persistent late payer of their service charge. We are now mid-March and yet the December 2013 payment is outstanding. This has gone on for years, and despite reminder and reminder, and a five per cent interest levied, they will not pay. One of the problems is that the flat is unoccupied but the owners live elsewhere. So we feel enough is enough and would want to institute County Court procedure. As the amount owed is under £400, could we claim using the Money Claim Online process? As it is a fixed amount, would we be able to opt for this route? We assume the owner is paying their council tax, which is absolute as is the service charge. FPRA replies: There is always one bad payer in every block! May I suggest that to implement a County Court order will take time, and for the amount involved it might not be worth it right now, but wait until the debt gets bigger. Alternatively one may think about going via the Small Claims Court. However, since the debt is barely three months old, the court may not take too kindly to this strong action so soon. Hence I would recommend perhaps thinking about employing a debt collector service. We use one which is very effective, although they do charge initially £150, which they pass on to the debtor. They will take on the case and, if necessary, recommend the next step of going to court for a judgement order, which, upon receiving, they then can pursue any mortgage lender, who would usually pay up to protect their interest.
The letters above are edited.
The FPRA only advises member associations – we cannot and do not act for them. Opinions and statements offered orally and in writing are given free of charge and in good faith, and as such are offered without legal responsibility on the part of either the maker or of FPRA Ltd.
Issue No. 109 Summer 2014
Legal Jottings Compiled by Philippa Turner
EWCA England & Wales Court of Appeal EW HC England & Wales High Court UKUT UK Upper Tribunal UT
Upper Tribunal LVT
Leasehold Valuation Tribunal (now called First Tier Tribunal FTT)
Landlord & Tenant Act 1985 In Morshead v Di Marco (2014 EWCA Civ 96) the landlord was successful on appeal from the decision reported in Newsletter 106; although Sections 21 and 22 of the Act provided a criminal sanction for failure to provide a written summary of the accounts and facilities for inspection, it did not allow a civil remedy of an injunction and/or damages. NB a new Section 21A allowing a leaseholder to withhold service charges if there was non- compliance is not yet in force.
The freehold in Conway v The Jam Factory (2013 UKUT 592) was owned by 50 per cent of the leaseholders; however, this did not prevent some of the other leaseholders being sufficiently dissatisfied to challenge the decision to reappoint the former managing agents by way of an application under the 1987 Landlord & Tenant Act for the appointment of a manager. Their claim failed and the LVT ordered that the costs incurred by the freeholder in defending the application could be added to the service charge accounts. On appeal, the UT upheld this decision: such costs falling within the term in the lease setting out items which could be included in the service charge as being those costs incurred “in connection with the general overall management administration and supervision of the building”. In the same case, the LVT had made an order under Section 20C of the Act, preventing the freeholder from adding these particular costs to the service charge and this decision was also the subject of an appeal to the UT. It was partially successful in that it ordered that only 10 per cent of the costs should be deducted and only from the service charge demands of the individuals who were parties to the action (and not from those of the non-participators). Whilst there were, in this case, grounds for invoking and applying Section 20C, the decision was reached in recognition of the freehold being leaseholder owned and thus having no other assets than those necessary for running the development; it would not be just and equitable to deprive the owners of the means of recovering expenditure incurred in the course of management.
! Legal Point
Section 20C of the Act, as added by the Landlord & Tenant Act 1987 and amended by the Housing Act 1996 Section 83(4) provides that application may be made by a leaseholder for an order that all or any of the costs incurred by the landlord in connection with proceedings before a court or tribunal are not relevant costs when determining the amount of the service charge. On such an application, the court or tribunal may make such order as it considers to be just and equitable.
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