No prizes for guessing what I was listening to when I decided to write this. I bring you two important cases from the Upper Tribunal (Lands Chamber) about sub-let fees and administration charges:Holding & Management (Solitaire Ltd) v Norton and other appeals  UKUT 1 and Re: Bradmoss Ltd  UKUT 3 (LC). In all cases:
(a) the tenant sought to sub-let their flat; and,
(b) the leases prohibited this without the consent of the landlord/management company.
In some of the leases, there was a further express provision requiring the tenant to pay the costs of the consent and/or a registration fee. In all cases, the landlord/management company sought to impose a charge for consent and/or registration of between £135 and £105, with a further £75 for registering the consent.
The LVT disallowed the charges in all cases, relying on s.19, Landlord and Tenant Act 1927. This provides as follows:
19 Provisions as to covenants not to assign, &c. without licence or consent.
(1)In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against assigning, underletting, charging or parting with the possession of demised premises or any part thereof without licence or consent, such covenant condition or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject—
(a)to a proviso to the effect that such licence or consent is not to be unreasonably withheld, but this proviso does not preclude the right of the landlord to require payment of a reasonable sum in respect of any legal or other expenses incurred in connection with such licence or consent; and
(b)(if the lease is for more than forty years, and is made in consideration wholly or partially of the erection, or the substantial improvement, addition or alteration of buildings, and the lessor is not a Government department or local or public authority, or a statutory or public utility company) to a proviso to the effect that in the case of any assignment, under-letting, charging or parting with the possession (whether by the holders of the lease or any under-tenant whether immediate or not) effected more than seven years before the end of the term no consent or licence shall be required, if notice in writing of the transaction is given to the lessor within six months after the transaction is effected.
The Upper Tribunal allowed the appeals by the landlords/management companies:
(a) it was not a case under s.19(1)(b), as the premium for the lease was not in consideration of the errection (etc) of the building, but in consideration of the grant of the lease;
(b) nor was it a case under s.19(1)(a) as this did not prohibit a landlord for charging for a consent; a charge could be levied regardless of whether there was an express term in the lease for such a charge.
In reality, the charges were administration charges under Sch.11, Commonhold and Leasehold Reform Act 2002 and, in particular, variable administration charges (being charges neither specified in the lease not calculated in accordance with a formula in the lease): see here. Such charges are required to be reasonable and, as no-one had yet considered that point, the parties were invited to make submissions on that point.
In addition, in Re: Bradmoss, the President noted that the LVT had referred to a decision (of his) refusing permission to appeal. He wanted to make “clear that decisions on applications for permission to appeal should not be treated as laying down guidance” and should not be relied upon.
So, what to make of these: The point on permission decisions is clearly right, although, perhaps, I might have tempered it a bit. In quite a few areas we simply don’t have many LT/UT decisions, and so permission decisions are all there are. Not ideal but, if the choice is between saying to a client/LVT “there is no law on this” or “there is a permission decision on this point”, I suspect most people would take the latter course. Perhaps the correct position is that such decisions should not generally be cited unless they’re the only thing on point (which, from memory, is what the Practice Direction on Citations says).
Then we turn to the wider points. So, these are variable administration charges are they? Well, lets take a step back. Apologies, but this is going to get messy.
The President says that a charge for a consent is clearly an “administration charge”, see Sch.11, para.1(1)(a), 2002 Act, as being a charge for or in connection with the grant of an approval. I think I’d agree with that. But then, to be an administration charge, it also has to be “payable”. Here, the President says that the charge is payable because either (a) there is an express term providing for it or (b) it follows from the fact that there is a right to withhold that a condition of grant can be the levying of a fee. I’m not so sure about (b). Surely the absence of an express contractual right is fatal?
Never mind, lets move on. He then decides it is a variable administration charge. This is defined as a charge which is neither specified in the lease, nor calculated in accordance with a formula specified in the lease. The formula bit is out, but surely in at least some of these leases, the charge was specified in the lease. There was an express right to charge. What is that if not “specified”? What the President means, I think, is that the amount of the charge wasn’t specified in the lease. But (a) that isn’t what Sch. 11 says and (b) how does this square with the earlier decision of Re Hampstead Garden Suburbs, under the similarly worded provisions about Estate Charges, which seemed to say that the merest mention in the lease meant that it was “specified” in the lease? Now, it could well be that Re Hampstead is wrong, but as it wasn’t even cited to the President, how can we know?
To put it bluntly, I’m more confused than an English batsman facing a Pakistani spin bowler. Like the English middle-order, any help would be gratefully received!