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12/02/2008

Harry Potter's premises, 'what is a house?' and waivers

OK, so they are late. In fact so late that the Times has started to catch up. Finally, some brief comments on the three cases from last week.

Majorstake Limited (Respondents) v Curtis (Appellant) [2008] UKHL 10. What constitutes a premises for the purposes of section 47(2)(b)(ii) of the Leasehold Reform, Housing and Urban Development Act 1993? (the section dealing with landlord’s proposed developments to the premises)

The key phrase is “the whole or a substantial part of any premises in which the flat is contained”. Can the landlord just identify ‘the premises’ themselves, by ‘drawing their own line’ on a plan that includes the tenant’s flat and include it in their counter-notice?

Simple answer – No. The key word is ‘is’ – what can be seen on the ground at the time the tenant serves his/her notice. One must examine the state of the building within which the flat is situated. Otherwise, the landlord is able to establish the development works affect a ‘substantial part’ of the premises by designating the premises as whatever takes their fancy, thus defeating the tenant’s right to acquire a new lease, if the lease has less than 5 years to run. Premises, in its common usage must refer to a self contained unit in which the flat is contained. Opinions differed on the meaning of ‘substantial’, but the majority accepted that it referred to the proportion of the premises affected.

The case also marks the debut of Harry Potter citations in the House of Lords. From Lord Scott of Foscote’s judgment:

Harry Potter, we are told, received letters addressed to him at “The Cupboard under the Stairs, 4 Privet Drive, Little Winging”. “The Cupboard under the Stairs” might have constituted “premises” for the purpose of letters from Hogwarts but for the purposes of construction of the 1993 Act a normal use of the English language must be assumed. I do not accept that it could possibly have been the Parliamentary intention that the “premises in which [Flat 77] is contained” could consist of Flat 77 and a contiguous flat, whether contiguous vertically or horizontally.

This is not a development to be encouraged.

Boss Holdings Ltd v Grosvenor West End Properties and Another  [2008] UKHL 5  on when is a house a house within the meaning of section 2 (1) of the Leasehold Reform Act 1967?

S.2 (1) reads, rather marvellously:

“…’house’ includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes: and-

a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate ‘houses’ although the building as a whole may be: and

b) where a building is divided vertically the building as a whole is not a ‘house’ though any of the units into which it is divided may be.”

Does the physical state of a property prevent it being ‘designed or adapted for living in’? Not if it was originally so designed or adapted – design is an historic point, not a current state. S.2(1) should be considered in view of the requirement of the unamended 1967 Act that the leaseholder should be resident, thus making an additional requirement that the property be habitable superfluous, despite the removal of the residence requirement in subsequent amendments.

Whether a subsequent adaptation to a non-residential use stops the property being a house is not decided, but it is suggested, obiter, that because ‘designed’ or ‘adapted’ are alternative qualifying requirements, once a property is a house, so it remains…

 Greenwood Reversions Ltd. v World Environment Foundation Ltd. – and – Madhav Mehra [2008] EWCA Civ 47 on waiver and forfeiture of lease.

Very much on its own (quite extraordinary) facts. But:

Without deciding the point, it is assumed that an unqualified demand for future rent will operate a waiver and the strict rule applicable to receipt of rent is applicable. The general rule of an unequivocal act by the landlord that can only be consistent with the lease continuing is supported.

Forfeiture – exercise of the judicial discretion to refuse relief  from forfeiture or to give alternative remedy (e.g. order for sale) will not be interfered wth by the Court of Apeal unless it is a decision no reasonable judge could reach. It is worth remembering it is a wide discretion, but that cuts both ways.

 

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

5 Comments

  1. mark henderson

    Forfeiture of a lease in this day and age is retrograde and shows how pathetic our legal system is that a court would permit Greewood Reversion, the landlord to forfeit a central London 2 bed room flat worth £250,000 and award costs of £100,000 against the tenant for arrears less than £20,000 . This can only happen in Britain because this is the only country where you are not permitted to appeal against a finding of fact by a judge. This is a mind boggling case. Barely a few months before this trial , the case was heard by the Rents Tribunal to determine the liability of service charges . Greenwood Reversions contended before the Tribunal that the matter was premature as they had served no demand on the Appellant Dr Mehra. Here is the decision of the tribunal

    “While the parties made extensive submissions on the other issues, the crux of the matter seems quite simple Nothing in the evidence before us indicated that an enforceable demand for payment of service charges had been made since 14th April 1998. Mr Warwick on behalf of the Respondent agreed that this was correct. The Applicant was also quite firmly of the view that he had not received sufficient details of any of the service charges demanded to be able to
    challenge them. The Tribunal carefully considered the terms of Section
    27A(1) and (3). In the Tribunal’s view, the application was premature. If and when the Respondent makes any sufficiently particularised demands relating to the periods in question, the Applicant, or any other person concerned,would be entitled to make a further application to this Tribunal.”
    RESIDENTIAL PROPERTY TRIBUNALSERVICE
    LEASEHOLD VALUATION TRIBUNAL
    LON/00BK/LIS/2005/DECSION DATED 24 MAY 2006

    The fact is that the landlord had forfeited the lease of 20 Wellesley Court back in Sept 1996 itself and refused to accept the rent forcing the tenant into forfeiture. This is a sad commentary on the British justice system which claims to have provided so much protection to the tenants.

    Reply
    • NL

      ‘Mark’, I’ve edited your comment to take out the duplication of some parts.

      Now, either you have got the wrong idea about the issues in the Greenwood v Mehra case or you are being deliberately disengenuous. Neither rent arrears nor service charges were the basis for the forfeiture, it was assignment without consent. Further, the County Court judgment of 2001 concerned arrears of rent and service charge up to April 1998. Greenwood had expressly not demanded service charges after being aware of the purported assignment in 2001 (and on their own evidence, since April 1998). Dr Mehra had claimed in the LVT on service charges from 1994 onwards and failed. No appeal to the Lands Tribunal has been made, to my limited knowledge (and it is now woefully out of time if one wasn’t made).

      But, given that the main issue was assignment without consent, and that “Dr Mehra admitted in cross examination that he had avoided the imposition of a final charging order [on the County Court arrears consent order!] by transferring the flat to a company with which he had a connection.”, and that an attempted appeal of the Consent Order in the County Court arrears case failed, twice, I don’t think you raise anything that makes the Court of Appeal judgment ‘mind boggling’.

      I don’t think the British Justice system ever claimed to have ‘provided so much protection to tenants’, but as this case demonstrates, forfeiture of residential leases is never easy on the part of the landlord. In general, the courts will bend over backwards to give a defence to forfeiture a hearing, even when, as here, repeated delays by the Defendant mean adjournments of more than a year.

      Now, I would agree that the rules around forfeiture could do with some re-consideration. In fact I would go so far as to consider residential forfeiture to be an archaic notion. But this is most certainly not a poster case for the need for reform. And, as you have not raised any issues of fact that would have troubled the Court of Appeal even if it were to decide issues of fact, I’m not sure why the decision – which strikes me as right in terms of existing law – should be regarded as ‘boggling’. This was a tenant who had failed to pay ground rent or service charges, and then assigned the lease without agreement, after all.

      Reply
  2. NL

    ‘Mr Henderson’ keeps trying to post comments. We keep deleting them. We have tried to tell ‘Mr Henderson’ why, but his email addresses don’t exist.

    So, ‘Mr Henderson’, please don’t bother trying to post any more comments. They will not appear.

    Reply
  3. mark henderson

    you are lying to protect your lot. i will expose your lie as well. The world communicates with me on my email. Give me your email address and I will respond

    Reply
    • NL

      ‘Mark’, my email address is available on our ‘about and contact’ page, logically enough. It is hardly hidden from view.

      Meanwhile:

      21 November 2009
      This message was created automatically by mail delivery software.

      A message that you sent could not be delivered to one or more of its
      recipients. This is a permanent error. The following address(es) failed:

      markhenderson@[removed by NL].com
      SMTP error from remote mail server after end of data:
      host e.mx.mail.[removed by NL].com [67.xxx.xxx.xxx]: 554 delivery error:
      dd Sorry your message to markhenderson@[removed by NL].com cannot be delivered. This account has been disabled or discontinued [#103]. – mta1025.mail.[removed by NL].com

      as one example. The other variant email address you have used here also similarly failed. You are still commenting here with the email address that failed above. Obviously, I have edited the above email response to remove the details from public view.

      You are demonstrably talking utter nonsense.

      And that, I think, is enough from Mr Henderson. Comments on this post are closed.

      Reply

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