There is, it is fair to say, a degree of inconsistency in the approach and practice of LVTs up and down the country. In particular, some LVT members seem to see it as part of their role to act as quasi-audit bodies, looking into all aspects of the landlord’s practice and procedure to see if they can uncover any wrongdoing. It’s very frustrating, both for landlords and tenants and is one of the reasons for the increasingly “lawyerly” approach of landlords (e.g. instructing solicitors and counsel).
In two recent cases, the Upper Tribunal has told the LVT to stop doing things like this and to try the case presented and pleaded before it. The first case was Birmingham City Council v Keddie & Hill [2012] UKUT 323 (LC). Mr Keddie and Mr Hill has bought a flat in a BCC block in 2007. Shortly before their purchase, BCC had replaced the windows. Keddie & Hill complained that the windows had been badly installed and did not want to pay service charges for their installation. They applied to the LVT where they complained about the installation quality.
The LVT, well, went off on a frolic of its own. It inspected the property and saw some examples of the old windows still in situ. It noted that those windows appeared to be ok. It noted that Birmingham hadn’t demonstrated that there was anything wrong with the old windows and disallowed all the costs of the windows, less a small notional sum for yearly repairs. It barely touched on the case pleaded by Keddie & Hill.
Birmingham successfully appealed to the UT. Mr Keddie accepted that it had never been his case that the old windows should not have been replaced. That was all done before he owned the flat, so he knew nothing about it. He was dissatisfied with the quality of the installation works. In those circumstances, the appeal had to be allowed.
The UT then turned on the LVT. It noted the “regrettable” practice of the LVT in looking for and/or identifying issues which formed no part of the dispute. That practice was giving rise to a waste of time and money and unnecessary appeals and risked the LVT descending into the arena. The LVT should not generally stray beyond the application form and statement of case prepared by the parties. In the “rare” case where the LVT did think it appropriate to raise a new issue, it had to give proper notice of this to the parties.
The UT made similar comments in Crosspite Ltd v Sachdev and others [2012] UKUT 321 (LC). This was a dispute about a fee for consent for subletting. The leaseholders had accepted that a fee was payable, but had disputed the quantum of the fee. Despite this acceptance, the LVT held that no fee was payable under the terms of the lease.
Again, an appeal to the UT was allowed. The parties simply had not raised the issue of payability before the LVT. There was no jurisdiction to consider the issue in those circumstances. In any event, the entitlement to a fee was accepted, so that here was again no jurisdiction to challenge the same. The fee of £165, as claimed, was payable.
Again, the UT criticised the LVT for the approach it had taken, referring back to the Birmingham case, above. Interestingly, having approved a fee of £165, the UT has implicitly rejected the idea that its earlier case on sub-letting fees (Solitaire v Norton – here) had set any sort of tariff for such fees.
Another important issue that arises in the Crosspite Ltd v Sachdev and others case is the comment in paragraphs 18 & 19 of that decision.
The Judge doesn’t appear to rely on the fact that the tenant had agreed to pay as the grounds for his belief that it is payable. He says:
“The second submission of the Appellant is that the LVT was in any event wrong in law to find that the Appellant was not entitled to require payment of the costs incurred in consenting to underletting. I agree. The law is as follows. Clause 2(8)(b) of the Lease entitles the landlord to
withhold its consent to underletting provided it does not do so unreasonably. It is axiomatic that the landlord may impose terms or conditions upon the granting of consent provided they are reasonable.
If they are not reasonable, the tenant may ignore them. If they are reasonable, the tenant must comply with them otherwise risk forfeiture.”
and
“One such term or condition commonly imposed is to require the tenant to pay a reasonable sum in respect of any legal or other expenses incurred by the landlord in connection with consenting
to underletting. If the amount charged is reasonable, the withholding of consent would not be unreasonable if the lessee refuses to pay, so the lessee must pay the charge if he is to get consent. If it is not reasonable, the withholding of consent would be unreasonable and if the lessee refuses to pay the sum would not be payable.”
and
“The ability to require such payment is therefore a function of or permitted by clause 2(8)(b) of the Lease”
I agree that non-payment of a charge is reasonable grounds for refusing permission and that if the tenant sublets without permission then the LL can seek forfeiture. But it does not follow from these 2 facts that therefore a fee is payable.
If anybody can explain the Judge’s logic I would be grateful.
It’s two-fold isn’t it? The first point was that it was agreed that there was, in principle, a right to a fee and therefore the LVT should not have gone behind that. The second point is that the landlord is entitled to make his consent conditional and that can include payment of a fee
Yes, I think I was reading too much into it.
Looking at it again I don’t think that in paragraphs 18 & 19 the Judge was concluding that the amount was payable, just that the LL is entitled to require payment before giving permission.
Thanks.