Now this is just getting silly. We have a third case this year on s.37, Landlord and Tenant Act 1987. Nothing for 20 years and then three in 11 months. In short, this is a power for the LVT to vary residential leases where a qualified majority of occupants in a block agree to the variation. The other two cases (our notes here and here) give more background.
Thirlaway v Masculet and others [2012] UKUT 302 (LC) concerned three flats in a converted Victorian terraced house where the leaseholders each held a share in the freehold company. One of their number (the appellant) was the manager. In practice, everything was done informally and by consent with the only service charge expenditure being the insurance premium. In 2007/8, relations broke down between the parties. The respondents applied to the LVT seeking to vary the leases so as to enable the costs of management to be recovered via the service charge; to enable the landlord company to recover its legal costs of pursuing leaseholders; to allow the directors and officers insurance to be recovered as a service charge and to require the leaseholders to indemnify the landlord against any and all breaches of the lease. There was also a proposed variation to allow interest to be charged on arrears. The LVT approved the variations.
An appeal to the Upper Tribunal was dismissed. The variations would serve the better management of the building by ensuring that the freehold company had adequate funds to discharge its functions. The leaseholders would still have the protection of s.19, Landlord and Tenant Act 1985. There was no prejudice to any leaseholder, nor was it unreasonable to make the variations. Further, the appellant was ordered to pay £267.20 in costs as he had pursued his appeal not out of any genuine desire to resolve the issues but as part of a “campaign of non-cooperation”.
Very interesting. One wonders what implications this has for fully mutual housing co-ops caught out by the Mexfield ruling as the perception is that changing leases is impossibly difficult. Well – one doesn’t wonder too hard – presumably the answer is that it will be less difficult than expected, though no doubt there will be a number of pitfalls to be avoided.