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12 Federation of Private Residents’ Associations Newsletter

Legal Jottings Compiled by Philippa Turner

EWHC England & Wales High Court EWCA England & Wales Court of Appeal UKUT UK Upper Tribunal RTM Right to Manage RAP Rent Assessment Panel LVT FTT UT

Leasehold Valuation Tribunal

First Tier Tribunal (successor to the LVT) Upper Tribunal

RTM companies A High Court judge held in R. (in re O’Twelve Baytree) v RAC (2014 EWHC 1229) that an application for a RTM can be withdrawn only with the consent of the landlord; this is so its right to legal costs be protected (Section 88(3) of the Commonhold & Leasehold Reform Act 2002).

90 Broomfield Road RTM v Triplerose (see Newsletter 109) decided that one RTM could cover more than one block in the same development. This case was upheld in Fencott v Lyttleton Court (2014 UKUT 27) although the outcome was different because the residents had already set up a separate RTM Company to cover all (four) blocks which predated the individual RTM Companies for each separately. These did not therefore satisfy the statutory requirement contained in Section 73(4) of the Act.

! Legal Point Section 73 sets out the requirements for a company to qualify as a RTM Company. Subsection 4 provides that it is not such a company if “in relation to the premises if another company is already a RTM Company in relation to the premises or to any premises containing or contained in the premises”.

The landlord’s costs in dealing with the request to create a RTM company were the issue in Columbia House Properties v Imperial Hall RTM (2014 UKUT 30). The residents had made three separate applications, the first in 2006, withdrawn on condition the landlord’s costs be paid at a specified amount, the second in February 2010 and the third in August 2010. As a result of the last, it was agreed a RTM company could be set up, the landlord’s surveyors and legal fees arising from the February claim totalling £6,313, to be paid by the residents. The landlord then sought an extra £15,036 to cover managing agents’ fees which were rejected by the LVT as being unreasonable. The UT agreed that there was evidence to support the unreasonableness but it did not necessarily follow they were irrecoverable since there had been no express finding by the LVT of fraud. It was ordered that the case be remitted to the LVT for further consideration.

Leasehold Reform Housing & Urban Development Act 1993 The lessees’ notices under Section 42 claiming new leases in Bolton v Godwin-Austen (2014 EWCA Civ 27) proposed that they should be in the same terms as the existing leases save a

Issue No. 110 Autumn 2014

peppercorn rent should replace the money rent. The landlord’s counter notice rejected this provision but did not, as required attach an alternative draft lease. However, in “without prejudice” correspondence, the residents’ terms were agreed but the draft lease was served outside the 14 day time limit and moreover contained the original rent covenant. The lessees applied under Section 49 (where no counter notice is given) and under Section 48 (where one party fails to enter into the new lease). They were unsuccessful at first instance but the Court of Appeal allowed the appeal finding that the terms of the new lease had not been agreed and thus the landlord was deemed to have accepted the proposed terms, having failed to comply with the time limit. Even if this was wrong, the counter notice was invalid since it had failed to state a counter proposal.

The UT case of Money v Cadogan (2013 UKUT 211) was concerned with the valuation of the freehold when lessees exercised their right to collective enfranchisement under the Act. The question was whether the possibility of releasing the covenant restricting the use of a basement flat to occupation by a caretaker should form part of the marriage value. The LVT had so decided and the UT agreed, holding that the fact that there were more than 80 years to run on the lease did not prevent the possible opportunity of letting the flat on a residential lease or tenancy being taken into account in valuing the freehold interest under Schedule 6. Para. 3 of the Act. Accordingly, the matter was referred back to the LVT for reconsideration of the valuation.

Lease interpretation

On conversion of a four-storey building to accommodate four flats, a gap had been deliberately created between the ceilings of the lower flats and the floor joists of the upper in order to create a sound barrier. The demises, in the case of the lower flats, included the ceilings, but no more and, in the case of the upper flats, included the floor joists but no more. Covenants in the leases allowed free passage for utilities and the right to enter other parts of the building to carry out essential repairs etc. and to lay down replacement utilities. One of the lessees, in carrying out renovations, removed the ceiling of his flat and installed a higher ceiling supported on a metal frame attached to the underside of the floor joists of the flat above; he also proposed to reroute the gas pipes into the area in question and place a gas meter there. In hearing the appeal (Patel v Yeung 2014 EWCA Civ 481), the Court of Appeal upheld the County Court finding that the work had amounted to a trespass of the upper flat (and of the freeholder’s space); access to turn off the gas during the works was refused since the activity was not authorised by the lease, taking place outside the area of the flat’s demise. Furthermore, damages of £87,627 were awarded to cover the nuisance caused by the noise and dust.

The FTT held that the leases in G & O Investments v Khan (2014 UKUT 96) require service charge demands to be served by registered post or recorded delivery. The UT on appeal agreed with this finding but, nevertheless, held that the requirement did not preclude service being by other means if receipt could be proved. Thus, subject to such proof, it would be possible for the landlord to recover the service charges for the years 2007-10, demands for which had been sent by second class post.

Jurisdiction of tribunals The extent to which the FTT may exercise its own knowledge and

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