Tag Archive for 'service charges'

Self Insurance and Right to Buy leases

Published
by
NL
on 14/02/2010
in FLW case note, Housing law - All, Leasehold and shared ownership and right-to-buy
. 0 Comments

Mihovilovic v Leicester CC [2010] UKUT 22 (LC)

Another Upper Tribunal (Lands Chamber) case. This was an appeal by the leaseholders of an LVT decision in respect of service and major works charges levied by Leicester City Council, the freeholder. There were three main issues in the appeal:

i) A charge for insurance of the building had been levied, but Leicester had not in fact obtained insurance, choosing to ’self insure’. The LVT had found that Leicester could include a charge in respect of this self-insurance.

ii) The LVT had found that works to communal windows and to communal doors fell outside the s. 20(1) Landlord and Tenant Act 1985 requirements for consultation. The disputed issue was whether the LVT was correct to consider the costs of these works individually, where they had been presented to the leaseholders as part of single set of works, also including works to individual flat’s windows and doors. (The ‘disaggregation’ issue).

iii) The date of contract for works issue – the LVT had found that the date for the contract was before the commencement of the lease, but also that this was irrelevant abd it was the date that works began that was significant.

As the lease in this case was in the same form as some 500 of Leicester’s right to buy leases, this was not a negligible issue for Leicester.

On i) – the insurance issue – the lease provided that the landlord could recover costs incurred in “observing and performing the provisions of sub-clauses (1) (2) (3) and (4) of Clause 4 hereof…so far as such costs are chargeable to the Lessee by the Lessor under the provisions of Part III of Schedule 6 of the Act…”.

Clause 4 included:

(3) To ensure so far as practicable that any services which are provided from time to time by the Lessor and to which the Lessee is entitled (whether by himself or in common with others) are maintained at a reasonable level and to keep in repair any installation connected with those services

(4) To rebuild or reinstate as soon as reasonably practicable the Premises and the Building in case of destruction or damage by fire tempest flood or any other cause against the risk of which it is the normal practice to insure.

‘Any services’ meant services in the Fourth Schedule, which included “(D) The costs and expenses of insuring the Premises and the Building against the risks specified or referred to in sub-clause (4) of Clause 4 hereof”.

Finally, Part III, Schedule 6 of the Housing Act 1985, with which the lease is required to comply by s.139 HA 1985, provides at paragraph 14(3):

There is an implied covenant that the landlord shall rebuild or reinstate the dwelling-house and the building in which it is situated in the case of destruction or damage by fire, tempest, flood or any other cause against the risk of which it is the normal practice to insure.

And paragraph 16A(3) provides:

Where the landlord does not insure against the obligations imposed by the covenant implied by virtue of paragraph 14(3), or, as the case may be, the superior landlord or other person does not insure against his obligations to the like effect, the lease may require the tenant to pay a reasonable sum in place of the contribution he could be required to make if there were no insurance.

The leaseholder’s argument was that ’self-insurance’ is not insurance, as shown by 14(3) and 16A(3) of Schedule 6 HA 1985. There is no payment for an indemnity against risk. Moreover, while 16A(3) allows that a landlord may require the tenant to pay a sum in place of an insurance contribution, it is not a requirement and when, as here, the lease did not require such a payment, there was no liability on the leaseholder to pay it.

Leicester’s arguments were that:
a) The word ‘may’ in 16A(3) of the Schedule did not give the Council a discretion to include such a term or not – the requirement was included by force of s.139 – even if not expressly in the lease, the term applied by force of statute. The word ‘may’ was only included because there were two situations in which the term could be excluded: either with the consent of a County Court prior to the conveyance, or where the Council were themselves a leaseholder and thereby prevented from carrying out the obligations of Schedule 6. Neither applied here. Sheffield City Council v Oliver LRX/146/2007 meant that the covenant applied by force of statute.

b) If that was wrong, as a local housing authority the Council have wide powers to manage their stock as they see fit and it would not be consistent with the existence of these wide powers if individual leaseholders were able to demand that insurance must be provided in a particular manner or with a particular provider. A generous and wide interpretation should be taken of the lease, Leicester City Council v Master (LRX/175/2007, 12 December 2008). The adminsitrative and logistical costs of ’self-insurance’ would thereby be a service “incurred or to be incurred by the Lessor in observing and performing” the provisions of clause 4(4).

Held: There was no liability on the leaseholders to pay the costs of ’self insurance’ by the Council.

Paragraph 16A(3) is expressly permissive in its terms. It enables provision to be made in the lease requiring the tenant to pay a reasonable sum where the landlord chooses to self-insure, but it does not require such a provision to be made or imply a covenant as to such payment.

In contrast, the preceding three paragraphs of Schedule 6 were expressly manadatory. Paragraph 16 was thereby clearly intended to create a discretion. Sheffield City Council v Oliver concerned one of the mandatory paragraphs and should not be taken to mean that all the paragraphs would be implied into the lease by force of statute.

While it was no doubt within the Council’s wide powers to bear the risks itself rather than insure:

The lease makes specific provision under clause 3(2) and paragraph (D) of the Fourth Schedule requiring the tenant to pay the council’s costs of insuring against the clause 4(4) risks. That provision was necessary because the clause 4(4) obligation is not to insure against the risks but to rebuild or reinstate in the event of certain occurrences. It is implicit, however, in the power that is given to the landlord to charge for the costs of insurance that the tenant is not liable to pay the costs of rebuilding or reinstatement should that be required. But if the council do not insure but decide to bear the risks themselves, any payment sought in respect of the costs of such so-called self-insurance would not be a payment for costs of the services provided or to be provided under clause 4(4). The services are rebuilding and reinstatement, and there is no suggestion that if rebuilding or reinstatement is not required any amount paid in respect of the council’s self-insurance would be refunded.

On ii) – the disaggregation issue, the appellants argued that: it was wrong for the LVT to reach this conclusion without inviting the applicants to address it on this issue; it was wrong in law on the facts;

Leicester argued that it was for the applicants to make the case that these were a single set of qualifying works and that they had not done so.

Held: On considering the documents in the case the approach of the appellants throughout had been to treat the works as a single qualifying work and the council had not disagreed with this approach, indeed had put the works forward as a single entity in their s.20ZA application for dispensation. It was therefore not open to the LVT as a matter of procedural fairness to reach a conclusion of disaggregation that differed from the approach apparently taken by both parties without warning the applicants and giving them the opportunity to address the matter. This was substantially prejudicial to the applicant and the appeal must succeed on this ground. In any event, where the parties have effectively agreed an issue, the LVT has no jurisdiction to make a contrary determination. Where, as here, there was no express agreement on a shared approach, it was open to the LVT to consider the matter, but not without warning to the parties and inviting their submissions.

On iii) – the date of the works contracts:

The LVT had found that the date on which the contract was entered into was ‘before the start of the lease’ (para 27), but then went on to state that:

The Tribunal…also determine that the fact that the contract granted to the Council’s Direct Contract section was made before the date of the Lease is irrelevant. It is the date the windows were installed which is the relevant date.

Both Leicester and the applicants agreed that this latter finding was wrong in law. But Leicester relied on the LVT’s finding that the date of the contract was prior to the start (and the 31st day) of the lease to argue that there was no requirement to consult, due to regulation 7(5) of the Service Charges (Consultation Requirements) (England) Regulations 2003.

The applicants had written to the LVT raising their concerns that while a broad or framework contract may have been entered prior to the beginning of the lease, if it did not specify the specific works to the specific building then the applicant’s view was that the contract would properly arise when ‘the contract was awarded or a purchase order raised for the works on the building’.

Held:
In its decision the LVT did not address the question that Mr Hitchcock [for the applicants] had raised in his letter, possibly because, as it said in paragraph 31 of its decision, it considered the date of the contract to be irrelevant. I am not sure that its conclusion in paragraph 27 was intended to be to the effect that the DSO contract constituted, for the purposes of regulation 7, the agreement under which the works were carried out. But in any event, by failing to consider the matters that Mr Hitchcock had raised in his letter, the LVT made a procedural error that has substantially prejudiced the appellants, and the appeal must be allowed on this ground also.

The LVTs finding on the date of the contract could not be relied on, so Leicester’s argument could not be said to based on its findings.

Appeal upheld on all counts and the case remitted to the LVT on the disaggregation question and in failing properly to address the question of the date of the works agreement. Order under s.20C that Leicester’s costs in the Tribunal are not to be regarded as relevant costs in determining the service charge made.

Comment
While the disaggregation issue and the relevance of the date of contract may be examples of the LVT being its own sweet intermittently procedurally wayward self, the insurance issue is potentially of more widespread significance.

The upshot would be that no Council that had chosen to ’self-insure’ its properties could recover a contribution from RTB leaseholders unless there was an express clause in the lease to that effect, as the implied clauses in Schedule 6 Housing Act 1985 (as amended) do not cover such a recovery, merely give a discretion to include an express term.

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Variation of service charges

Published
by
J
on 01/02/2010
in Leasehold and shared ownership and Uncategorized
. 2 Comments

Shersby v Grenehurst Park Residents Co Ltd LRX/142/2007 Upper Tribunal (Lands Chamber)

The appellant held a lease of a flat in a former mansion house. The wider estate comprised 17 such flats and a number of freehold houses and mews cottages. In total there were 40 residential units. All the units were obliged to contribute to the costs of repairing the main structure of the mansion house but, for the first five years of the lease, the service charge was capped by virtue of an agreement between the developer and the tenants.

It subsequently became clear that the cap could not be maintained as it was not sufficient to allow for the collection of any reserves. The freeholder house owners were not happy with this and pointed to the apparent unfairness of obliging them to repair not just their own homes but also the mansion.

The respondent – as freeholder and manager under the leases – was minded to move towards a scheme whereby the leaseholders would pay increased service charges. The lease did provide for the service charge percentages to be varied and the issue was whether or not the respondent had lawfully done so.

The appellant contended that it had not done so. In particular, he argued that the obligation to contribute towards the mansion was a collective obligation on both the leaseholders and freeholders and that the lease made no provision for dividing costs into separate “pots”. There were also sound policy reasons against construing a generous power of alteration to the respondent, if only because leaseholder were entitled to certainty regarding their proportion of the overall expenses. In addition, a subsidiary issue arose as to payment of insurance premiums.

The Upper Tribunal (Lands Chamber) dismissed the appeal. The lease entitled the respondent to vary the percentages payable if “in the opinion of the Manager” it was appropriate to do so. This had to be a genuine and bona fide opinion. The task of the Tribunal was to determine whether the respondent reached a lawful and reasonable decision. It was not the task of the Tribunal to substitute its own view but to ensure that the decision taken as one within the range of reasonable decisions.

The respondent took legal advice on the issue and advice from a surveyor. It gave detailed and careful consideration to the matter and came to a clear view. It was a bona fide decision. The fact that a different decision was possible was immaterial.

The insurance premiums had been paid between 1997 and 2004 and, in addition, had not been challenged at the time, whether in correspondence or in previous LVT proceedings between the parties. The charges had been admitted within the meaning of s.27A(4), Landlord and Tenant Act 1985 and were not capable of challenge in the LVT. In addition, premiums since 2004 were payable as charged.

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Leasehold law update

Published
by
J
on 14/11/2009
in FLW article, FLW case note and Leasehold and shared ownership
. 0 Comments

This is another of the (irregular) updates on matters relating to leasehold property, leasehold valuation tribunals and the like.

First up, those practicing in this field should note the the Right to Manage Companies (Model Articles) (England) Regulations 2009 SI 2009/2767 and the guidance issued by the DCLG on the Regulations. The Commonhold and Leasehold Reform Act 2002 confers on qualifying leaseholders of flats a right to establish and join a “Right to Manage company” (RTM company) which can then exercise the management functions of the freeholder. The RTM company is a “normal” company and was previously required to have articles and a memorandum of association. The Companies Act 2006 replaced these two documents with one new document called simply “the articles.” These regulations prescribe the form of articles for RTM companies in England. All new RTM companies are bound by the new articles and all existing companies have until September 30, 2010 to adopt them.

Secondly, the Upper Tribunal (Lands Chamber) (aka the Lands Tribunal) has given judgment in Circle Thirty Three Housing Trust Ltd v Segovia LRX/66/2008 (link is to a .pdf) [Also on Bailii]. The respondent was the tenant of the appellant. The tenancy agreement provided for a weekly service charge of £1.80 and £1.42 for heating and hot water, with a power to vary such sums in accordance with ss.102 and 103 Housing Act 1985

(I pause at this stage to ask whether this is actually a service charge within the meaning of s.18 Landlord and Tenant Act 1985? See Home Group Ltd v Lewis LRX/176/2008 and Chand v Calmore Area Housing Association Ltd LRX/170/2007)

The appellant did vary the amounts and reduced the service charge to £1.02 per week but increased the heating and hot water charge to £17.39 per week. This was in an attempt to recover a previous shortfall. The respondent applied to an LVT for a determination as to the reasonableness of these charges.

The LVT concluded that:

(a) the service charge could not be varied. The charge was payable for certain items specified in Appendix A of the tenancy agreement. There was nothing specified in Appendix A, so the costs could not possible change;

(b) the shortfall related to a year or years prior to the commencement of the respondents tenancy and so could not be recovered from her.

The Lands Tribunal allowed an appeal against (a) but rejected the appeal against (b). There clearly was power to vary the service charge (and, as part of that, the heating and hot water charge) and the LVT had been wrong to focus on the fact that Appendix A had been left blank. That was an obvious error and, applying Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896, HL, the Lands Tribunal was entitled to remedy the error through construction of the contract.

However, there was nothing in the agreement to suggest that a reasonable tenant would understand that they were obliged to contribute towards shortfalls incurred prior to their tenancy having commenced. There was no objection to recovering shortfalls during the tenancy, but shortfalls which pre-dated the tenancy were not, as a matter of construction of the contract, recoverable.

The reasonableness of the increase for the future years was, however, remitted to the LVT for determination.

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Help with service charges

Published
by
J
on 19/03/2009
in Housing law - All, Leasehold and shared ownership and right-to-buy
. 0 Comments

Leaseholders who purchased their properties from local housing authorities under the Right to Buy (and those persons who subsequently bought on from those original purchasers) are currently facing huge service charge bills (up to £40,000 in some London Boroughs) for their alleged share of the remedial works to their buildings which is being carried out as part of the Decent Homes Initiative.

Whilst the Government has resisted calls to cap those service charges, they have, from 6 April 2009, introduced two reforms which may be of some benefit to leaseholders in England.

The Housing (Service Charge Loans) (Amendment) (England) Regulations 2009 SI 2009/602 amends the Housing (Service Charge Loans) Regulations 1992 so as to permit housing authorities to make loans to their leaseholders on non-commercial terms. Specifically, on terms that do not require the payment of interest or only require interest to be paid on part of the loan.

Secondly, the Housing (Purchase of Equitable Interests) (England) Regulations 2009 SI 2009/601 give effect to s.450D Housing Act 1985, as inserted by the Housing and Regeneration Act 2008. In outline these regulations provide for the housing authority to purchase an equitable interest in the property in exchange for reducing or cancelling the outstanding service charge bills.

It remains to be seen how keen, if at all, housing authorities are to make use of these new provisions, especially the latter Regulations. I have my doubts.

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What is a service charge?

Published
by
J
on 11/12/2008
in FLW case note, Housing law - All and Leasehold and shared ownership
. 9 Comments

Morshead Mansions Ltd v Leon Di Marco [2008] EWCA Civ 1371

Service charges. Much more interesting than tolerated trespassers. Honestly.

Sections 18 – 30 Landlord and Tenant Act 1985 contain a detailed regulatory framework for service charges in residential property. In broad terms, leaseholders can dispute their service charges if they are said to be unreasonable in some way. (For those of you who want a detailed discussion of this area, see Davey & Bates Leasehold Disputes, 2nd Edition, April 2008).

What, however, is a service charge? By s.18 of the 1995 Act, a service charge is “an amount payable by a tenant of a dwelling as part of or in addition to the rent (a) which is payable directly or indirectly for services, repairs, maintenance, improvements or insurance or the landlord’s costs of management and (b) the whole or part of which varies or may vary according to the relevant costs.”

The company was the freehold owner of a residential property in Maida Vale. That property comprised some 104 flats. Mr Di Marco was a member of the appellant company and a leaseholder of a flat in the property, indeed, each flat owner had one share in the appellant company.

Mr Di Marco’s lease contained provisions for service charge computation in the normal way. The appellant company, pursuant to its Articles of Association, decided to establish a reserve fund to be used to defray the costs of the company in connection with its obligations towards the building. It compelled all members of the company (including Mr Di Marco) to make total payments of £4,000 towards this fund.

The company was quite clear that it had decided to take this route and not to levy the charges as a service charge in order to avoid delays and challenges to the service charge under ss 18-30 Landlord and Tenant Act 1985.

Mr Di Marco declined to pay these sums and, when the appellant company sued for the monies, contended that the charges were service charges within the meaning of s.18. His defence was successful in the county court and the company appealed.

The company contended that the charges could not be a service charge because:

(a) they were not payable by Mr Di Marco in his capacity as a tenant;

(b) rather, the charges were payable because of the company / member relationship, not because of the landlord / tenant relationship;

(c) the £4000 fee was not chargeable for services, repairs, maintenance etc, but could be used for any purpose, such as litigation costs;

(d) the costs did not vary according to the landlord’s costs of performing certain tasks, but were set by resolution of the company in a general meeting.

The Court of Appeal allowed the appeal. There was a distinction between charges payable by a tenant under a lease (which were likely to be service charges) and charges payable by a shareholder to a company. It did not matter that the landlord was the company or the tenant was a shareholder. The legal relationships were different and separate. The county court had erred in upholding the defence. The monies claimed were payable by Mr Di Marco in his capacity as a shareholder.

This is – to my mind – a sensible and manifestly correct decision. I confess to being slightly uncomfortable that the protections of ss 18-30 can be avoided in this manner, but, given the definition of “service charge” in s.18, this decision is right. It’ll be interesting to see if other lessee-owned freehold companies start taking this approach. It certainly seems to be quicker and easier than levying service charges.

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Stadium Housing to Appeal

Published
by
Francis Davey
on 30/09/2008
in Assured Shorthold tenancy and Housing law - All
. 27 Comments

Regular readers of this blog will have read our comments on (in our view) a fairly poor example of service charge management by an RSL, entitled On the Naughty Step. To my surprise the RSL in question — Stadium Housing — have decided to appeal the decision.

This should prove interesting as they appear (so my information goes) to be appealing against

The first ground will be of particular interest as many LVT’s have one or more HLPA members on the panel. The idea that such membership should normally require recusal would have far reaching consequences. The other two grounds of appeal may also produce interesting comment from the Lands Tribunal.
Doubtless the decision on appeal — when it comes — will be blogged here.
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On the Naughty Step

Published
by
NL
on 21/09/2008
in Assured Shorthold tenancy and Housing law - All
. 23 Comments

Or an RSL behaving badly, again. And this time it’s personal…

21 Press House, Press Road LON/00AE/LSC/2007/0292 [pdf], an LVT decision. The landlord, Stadium Housing Association, were facing an application over hefty service charges made on an shorthold assured tenancy which was Part VII temporary accommodation for Brent Council.

How did Stadium Housing decide to defend the case? By attacking the integrity of the Tribunal. Stadium pointed out that the chair, Nik Nicol, was a member of the Housing Law Practioner’s Association (yes, Hlpa!). Stadium, via their counsel Mr Grundy, alleged that:

the purpose of Hlpa was to promote the interests of tenants [...] and it was as plain as a pikestaff that an “ordinary member of the public” would perceive members of Hlpa as biased in favour of tenants.

Nik Nicol pointed out that he was not just a member, but had been on the executive of Hlpa for 9 years and helped to write the constitution. In addition, another member of the sitting Tribunal, Mel Cairns, was also a founder member of Hlpa and is currently on the committee.

Stadium, it was pointed out, had utterly failed to understand the difference between ‘promoting the rights of tenants’ (Hlpa aim) and promoting the interests of tenants. Finding in favour if a tenant without basis in evidence and law would not be promoting the rights of the tenant. In addition Hlpa’s code of conduct commits its members to professional behaviour. There could be little that was more unprofessional than judicial bias, which was what was being suggested.

Hlpa’s stated objectives were notably similar to those of most RSLs and would not look out of place on Stadium’s website, so it would be hard to see how a member of the public could perceive bias.

Mr Grundy’s submissions would mean that no member of Hlpa could ever hold judicial position, simply by that membership and that would make a mockery of the rigorous selection process. There was no bias or appearance of bias.

Just why Stadium might have taken this utterly ridiculous approach is clear in the rest of the Judgment. They were levying a walloping £129.72 per week service charge. However:

  • It was improperly apportioned under the tenancy agreement
  • Services had been changed without notification or consultation
  • Stadium could provide no breakdown of the charge
  • Charges weren’t audited, despite Housing Corp requirements
  • The charge was very high in comparison to others, for no reason, but it was usually paid by Housing Benefit, so nobody cared (except the applicant, who was working).
  • The contract was not individually negotiated so the Unfair Terms in Consumer Contract Regulations were engaged
  • The applicant was being asked to pay a charge for things that “no assured shorthold tenant in the private sector would even think of paying, even if the landlord were minded to try to impose it”.
  • On reasonableness of other charges, there was simply no evidence provided of the actual costs incurred by the respondent. The Tribunal wasn’t prepared to guesstimate on no evidence.

The result, service charges of £42.75 per week payable, a drop of £87 per week. This amount to be retrospective. No subsequent changes to the service charge made by the respondent were valid.

Oh dear, oh dear. Probably best not to impugn the professionalism of the Tribunal when it is your utter lack of professionalism that is about to come to light.

This challenge to service charges for temporary accommodation under Part VII is worth bearing in mind when, for example a client is facing a ‘rent arrears’ possession from temporary accommodation, if a service charge component is levied, at least. Stadium are far from alone in their cack-handed handling of the charge.

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Hey! That's my window.

Published
by
Francis Davey
on 01/09/2008
in FLW case note, Housing law - All, Leasehold and shared ownership and right-to-buy
. 0 Comments

Sheffield City Council v Hazel St Clare Oliver LRX/146/2007 [links to PDF]

This is a case which touches on an issue familiar to those involved with right to buy leases: replacement of windows by the landlord.

The landlord council wished to replace metal framed windows with new uPVC in the leaseholder’s block. The terms of the demise in the lease were clear: the windows were part of the leaseholder’s property. Consistent with that, the leaseholder’s covenant to repair required her to keep the windows in repair. The covenant to repair looked like this:

“(3) To keep the demised premises and every part thereof (except those parts of the demised premises which the Council are by virtue of the covenant implied by paragraph 14(2)(a) of Schedule 6 to the 1985 [Act] liable to keep in repair) and all fixtures and fittings therein and all additions thereto and all (if any) sewer drains cables pipes wires ducts radiators tanks cisterns and valves and channels within and serving the demised premises and all doors and windows (including the glass and frames thereof) floors ceilings internal walls and surfaces and skirtings therein in good repair AND where necessary to renew or replace all worn or damaged parts of the demised premises which the lessee is liable as hereinbefore provided to repair”.

The council’s covenant to repair was complementary:

“(3) To keep in repair (the definition of repair where appropriate including decorative repair) and (if desirable in the opinion of the Council) to improve (a) the structure and exterior of the demised premises and of the Building (including drains gutters and external pipes) and to make good any defect affecting that structure …”

The LVT decided that, on a straightforward construction of these covenants, the “exterior of the demised premises” did not include the windows so that replacement of them could not be said to fall within the council’s covenant to repair and improve. As a result, the council could not include a charge for their replacement in the service charge bill.

On appeal to the Lands Tribunal, the President thought otherwise. The Lands Tribunal reached its conclusion based on its construction of Paragraph 14 of Schedule 6 to the Housing Act 1985 which is implied into every right to buy lease by s.139 of the same act. Paragraph 14(2)(a) reads:

“(2) There are implied covenants by the landlord— (a) to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;”

The Lands Tribunal found that for the purposes of paragraph 14(2)(a) the windows were within the meaning of “structure and exterior of the dwelling-house”, based on a long line of authorities starting with Irvine v Morgan [1991] 1 EGLR. The fact that the windows were part of the demised premises would be of no relevance.

As it happens this was not enough. The council’s reasons for doing the window replacement work (for instance to improve the thermal properties of the flats) indicated that the works were improvements not repairs — a suggestion not denied by the council. In that case the council would have to rely on their duty to improve (found in the council’s covenant) not on the statutory implied duty to repair.

The Lands Tribunal went on to find that the council’s covenant was to be construed in the same way as paragraph 14(2)(a), so that “structure and exterior of the demised premises” included the windows. The windows fell within the council’s duty to improve and hence the LVT had erred and the council would be able to recover the costs of replacing the windows via the service charge bill.

This part of the appeal had become academic because, as a result of the Respondent’s objection to the work being done, the Council had agreed not to replace her windows. For the leaseholder at least, the case had a happy ending.

The decision is not entirely satisfactory. The lease appears to have quite carefully specified that the responsibility for repair of the windows fell on the leaseholder. It would be reasonable to conclude that the corresponding freeholder covenant was meant to exclude the windows. Such a view is buttressed by the fact that the windows were a part of the demise. All the term implied by the Housing Act 1985 could do is override the tenant’s duty to repair. It should have no effect on the duty of the council to improve.

The Lands Tribunal appears to have moved dangerously close to using the meaning of a statutory implied term as a determinant for the meaning of a term in the lease, rather than constructing the lease itself.

Furthermore, the Tribunal’s conclusion is odd. The council were able to remove items of property that belonged to the leaseholder (the windows) and replace them with others as they saw fit. The lease in question could like many right to buy leases have reserved the windows to the council. The fact that it did not suggests that the lease was intended to preclude the council’s interference in just such a fashion.

The decision may have wider implications because the President expressed his surprise and unhappiness with a clause which both required and empowered the council to carry out arbitrary improvement works (in my experience invariably present in right to buy leases). At the end of the decision he said:

“I would hope that, as a matter of practice, the council would not without the lessee’s approval carry out improvement works to the demised premises for which the lessee is to be charged unless the works are no more than a limited extension of works of repair.”

The disapproval the Lands Tribunal have expressed may be useful in persuading councils against interfering with their leaseholder’s property when carrying out works of improvement.

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