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By J
10/03/2013

Catching up with the LVT

Sorry (both to readers* and the rest of the NL team) for the delay in getting these done. We’ve had a few Upper Tribunal (Lands Chamber) cases over the last few weeks and I’ve been rather less efficient than I had hoped. So, here goes.

LB Southwark v Bevan [2013] UKUT 114 (LC) is another one in the “err, what were you thinking?” model of LVT decisions. The case concerned service charges at a block of flats held by Southwark. One of the eight flats was let on long lease to the respondents. The other seven were all retained by Southwark. The lease provided that Southwark could adopt any “reasonable method” of apportioning costs. In practice, Southwark split the costs according to the number of bedrooms in each flat.

Southwark said that there were six two-bed flats and two one-bed flats. The respondents’ flat was a two-bed flat. He argued that there were actually seven two-bed flats and one one-bed flat. The LVT accepted that the methodology adopted by Southwark for apportioning costs was a proper one, but held that there were indeed seven two-bed flats, such that the total costs needed to be re-apportioned.

Southwark successfully appealed. The evidence before the LVT had come from an employee of the council who had viewed the disputed flat and confirmed that there was only one bedroom. The council tax records supported this analysis. There was no suggestion that the officer had lied in his evidence. The LVT had no legally sustainable reason for concluding that the disputed flat had two bedrooms.

Corscombe Close Block 8 RTM Co Ltd v Roseleb Ltd [2013] UKUT 81 (LC) is an important case for shared ownership leases and the Right to Manage (and enfranchisement, as it happens). In order to qualify for the RTM, you have to be, inter alia, a leaseholder under a long lease. That is defined in ss.76 and 77, Commonhold and Leasehold Reform Act 2002 as including a lease for a term certain exceeding 21 years (s.76(2)(a)) and a shared ownership lease where the total share held by the tenant is 100% (s.76(2)(e)).

Now suppose, as here, that there is a shared ownership lease but the tenants share is less than 100%. It can’t qualify under s.76(2)(e), but can it qualify under s.76(2)(a)? In the context of the Leasehold Reform, Housing and Urban Development Act 1993, where the same definitions apply, it had been suggested, albeit obiter, that it was sufficient to qualify under either subsection, even though this would render the shared ownership provision irrelevant: see Brick Farm Management Ltd v Richmond Housing Partnership Ltd [2005] EWHC 1650.

The UT took the same approach. You held a long lease if you met any of the conditions in ss 76 and 77. Which means that all shared ownership leases qualify, regardless of the share held by the tenant. And, I think, means that s.76(2)(e) is now pointless.

Tobicon Ltd v Collison and others [2013] UKUT 47 (LC) is actually nothing to do with service charges or leasehold issues, but is a very odd case about service out of the jurisdiction. The leaseholders applied to the LVT disputing their liability to pay certain service charges from 2005, 2006, 2007, 2008, 2009 and 2010, essentially on the basis that no valid demands had been made. Their application was coupled with another one from their RTM company seeking a determination as to the service charges which should be passed over to the RTM Co (see s.94, CLRA 2002).

The LVT determined that none of the demands were valid and how much money was owing to the RTM company. The decision was registered with the county court as a judgment for just under £150,000.

The appellant applied to set aside the county court order and for permission to appeal the LVT decision. It contended that he had never been served with the LVT proceedings at its registered office in Jersey. An appeal to the UT was conducted by way of re-hearing.

The UT found that the original proceedings had never been served on the appellant at its Jersey address. It was, however, served on the UK-based agents of the appellant, including its solicitor. The difficulty was that such documents as had been served on the agents had not been served on them in their capacity as agents; rather, they had been (erroneously) named as parties to the application. It was, however, “inconceivable” that the agents would not have brought the application to the attention of the appellant; in fact, having heard the evidence, the UT went further and held that the appellant had been informed and had chosen not to take part in the LVT proceedings. The UT had all the powers of the LVT (see s.175(4), 2002 Act). Those powers included a power to dispense with service where a party was out of the UK (reg.23(4)(a)(iii) and 23(5)(a), LVT procedure regs). The appropriate order was to dispense with service and affirm the underling LVT decision.

Finally, we have LB Lewisham v Luis Rey-Ordieres [2013] UKUT 14 (LC), a lengthy and difficult decision concerning major works done under a qualifying long-term agreement. Briefly, public sector landlords tend to enter into long contracts (3 to 5 years or more) with companies for the provision of building works across all their stock. These tend to be governed by public procurement law and require pan-EU tendering. In Auger v LB Camden LRX/81/2007, the Lands Tribunal (as was) suggested that the costs incurred under these agreements must be reasonable as the price had been set by pan-EU tendering. It was further suggested that it would be unreasonable to give works to anyone other than a contracted party, since to do so would expose the authority to a damages claim.

In the present case, the UT has slightly rowed back from that position. Prices derived after pan-EU tendering could not automatically be reasonable; such tendering agreements were merely “strongly persuasive” as to reasonableness. The issue was always whether the works were reasonably necessary and whether the costs incurred were reasonable in amount. For a (much) more detailed analysis of the rest of the case (which I’ve skipped as I don’t think it has any wider significance) see here and here.

 

 

 

 

 

* We get complaints if we’re late. Some of them are even quite rude. Which, given we do this for free and for fun is, well…

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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