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Nothing to see here

By J

Just two short notes on recent UT(LC) cases that I was asked to cover. They’re pretty unimportant in the scheme of things, but we do try to be comprehensive.

In Freehold Managers (Nominees) Ltd v Piatti [2012] UKUT 241 (LC), the issue was the payment of an administration charge in connection with a sub-letting. In outline, Mr & Mrs Piatti were the leaseholders of a flat and FM(N) Ltd were the freeholders. The lease prohibited subletting without consent, such consent not to be unreasonably withheld. Subletting took place without consent and FM(N) Ltd pointed out that consent was needed and suggested a range of fees, depending on whether the leaseholders wanted “one off” consent or a licence for up to five years. The parties were unable to agree a fee and so the issue went off to the LVT. The LVT  found that nothing was payable as the lease didn’t expressly mention a right to charge a fee.

The UT allowed an appeal. The right to require consent included with it a right to demand payment of a reasonable fee, i.e. consent can be on terms that include payment of a fee. That had been decided by earlier UT cases (noted here and here). On the facts, £165 was reasonable.

In Mercia Investment Properties Ltd v Northway [2012] UKUT 419 (LC), the LVT had been asked to determine whether there had been a breach of covenant (see s.168, Commonhold and Leasehold Reform Act 2002) in circumstances where the landlord alleged that the tenant had failed to give notice of the assignment of the lease. The LVT held that there had been a breach, but it had been waived. It then held that the behaviour of the landlord was “not far short” of being vexatious or an abuse of process and that the landlord should pay the costs of the application. It then made an order under s.20C, Landlord and Tenant Act 1985, preventing the landlord from recovering its costs via the service charge.

I interpose here. The first decision, i.e. that the breach had been waived, isn’t one that is open to the LVT. It can’t look at whether the breach has been waived, only whether the entire covenant has been waived (see here). The second decision is also, with respect, nonsense. The LVT has no general power to award costs. If it meant to exercise its power under Sch.12, 2002 Act to punish frivolous, vexatious, abusive, disruptive or otherwise unreasonable behaviour then it needed to say so and remind itself that it can only award up to £500.

The LVT refused permission to appeal on the first point but granted it on the second point. The UT allowed the appeal on the second issue. Having determined that the behaviour was “not far short” of being vexatious, it could not possibly have made an order under Sch.12.

It seems to me that the landlord should have renewed the application for permission to appeal on the first issue and sought permission on the s.20C issue. It looks to me as if both would have been successful.

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.


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