It’s cold, wet and miserable, but at least there is some new leasehold legislation and a case to cheer you up.
The first is the Right to Manage (Prescribed Particulars and Forms) (Wales) Regulations 2011, replacing the 2004 regulations of the same name. As you’ll all know, the Right to Manage is where qualifying leaseholders of buildings form a company which can take over the landlord’s management functions; it involves the service of a series of prescribed notices, all of which are dealt with in these new regulations. On a similar note, the RTM Companies (Model Articles) (Wales) Regulations 2011 have also been published, prescribing new forms of model articles for RTM companies in Wales. This, in broad terms, brings Wales into line with England (see our note about these reforms in England, here).
We then come to Stenau Properties Ltd v Leek and others [2011] UKUT 478 (LC), concerning dispensation from the consultation requirements in s.20, Landlord and Tenant Act 1985. The respondent tenants had applied to the LVT under s.27A, 1985 Act, for a determination as to their liability to pay service charges in respect of certain items of work. The LVT found that the service charges were justified and reasonable, but noted that it was common ground that the landlord had not consulted in accordance with s.20 and, as such, felt obliged to cap the service charges at £250 per leaseholder unless and until the landlord obtained dispensation under s.20ZA. The landlord promptly applied for dispensation, which was rejected. The evidence showed that there had been no real attempt to consult the leaseholders and that no good reason had been advanced for this failure.
The landlord appealed to the Upper Tribunal (Lands Chamber), arguing that the LVT had failed to consider the degree of prejudice suffered by the tenants, but had erred in focusing upon the inability of the landlord properly to explain why no statutory consultation took place.
The Upper Tribunal dismissed the appeal. The LVT had concluded that there was a substantial breach of the consultation process. A properly conducted consultation process should give tenants confidence in the decision that are reached and the opportunity to participate in a meaningful way is itself of real value. The LVT had been entitled to find that the breach was so substantial that prejudice must have flowed from it.