Forfeiture and the LVT

By virtue of s.81 Housing Act 1996 and s.168 Commonhold and Leasehold Reform Act 2002 a landlord may not seek to forfeit a residential long lease unless the breach (whether to pay rent, service charges, administration charges or other breach of covenant) has been admitted by the tenant or determined by inter alia, an LVT.

In addition, by s.167 Commonhold and Leasehold Reform Act 2002 (and the regulations made thereunder), a landlord may not bring proceedings for forfeiture where the debt owed is less than £350.

In Glass v McCready LRX/122/2008, the LVT managed to confuse itself with the interplay between these two provisions and has had to be put right by the Upper Tribunal (Lands Chamber).

The landlord was the freehold owner of an estate in Enfield, consisting of five blocks, each containing 4 maisonettes. The leaseholders were obliged to insure the properties through an insurer nominated by the landlord and to provide copies of the relevant insurance details to the landlord, etc. In the present case, one leaseholder did not pay the necessary premium and the landlord applied to the LVT under s.168 CLRA 2002 for a determination that the leaseholder was in breach of covenant.

The LVT held that it had no jurisdiction to consder the matter. It held that, because the sum demanded was less than £350, there could be no forfeiture in any event, and so it had no jurisdiction to consider the matter. Alternatively, the insurance premium was a service charge and so the application should have been made under s.81 HA 1996.

The landlord appealed to the Upper Tribunal (Lands Chamber) where Judge Huskinson, with what seems to me to be a rather resigned sigh, allowed the appeal. The obligation was not just to pay a sum of money, but included (a) to place the insurance and (b) to provide a copy of the policy documentation to the landlord. In any event, the mere fact that less than £350 was claimed did not oust the LVTs jurisdiction. There was a conceptual difference between determining whether or not a breach had occured and whether or not the landlord would be able to go on to forfeit the lease (although not cited, see Swanson Grange v Langley-Essen LRX/12/2007 in support of this proposition). The LVT was entitled to determine the former question, even if the landlord would not be entitled to go on to forfeit the lease.

Further, even if the landlord had only been challenging a failure to pay a sum of money there would have been a strong case for treating the application as being made under s.81 HA 1996 and not simply for declining jurisdiction.

So, the LVT got it totally and utterly wrong.

Posted in FLW case note, Housing law - All, Leasehold and shared ownership and tagged , .

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.

2 Comments

  1. [Deleted]

    have you overturned any forfeiture cases involving local authorities who served the s.146 without determining that a breach had occurred, who obtained a possession order at a Part 55 summary hearing, who had the misfortune to have their case heard by a inexperienced Deputy Judge who did not order the relief from forfeiture application hearing before he gave the possession order, instead of after? If so could you let me know. Thank you.

    Anna

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