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Three to whet your appetite

By J

The higher courts and tribunals have all been having a busy leasehold-related start to the year. None of these are hugely important, hence doing a short collective note on them. The really important cases will come later this year (Phillips v Francis; Di Marco v Morshead Mansions (No.2))

Sussex Villas v Wan [2014] UKUT 29 (LC) involved a truly awful lease. I don’t really want to talk about the underlying dispute because, frankly, it turns entirely on its own facts (and, as I might have mentioned, awful wording in the lease). The interesting bit is how the UT approached s.20C, Landlord and Tenant Act 1985 (power to prevent landlord recovering legal costs through the service charge). In short, the UT found that everyone (both parties and the LVT) had got the lease construction completely wrong. The result of this error, said the UT, was that the legal costs of the landlord had been incurred on an “entirely false premise”, such that, if they were challenged under s.19, LTA 1985, nothing would be reasonably incurred. On that basis, it was quicker and easier to make a s.20C order instead.

Re: Regent Park, Salford [2014] UKUT 9 (LC) is the follow-up to Peverel Properties Ltd and another v Hughes and others [2012] UKUT 258 (LC) (our note here) and is an example of Daejan-dispensation in action. As you’ll all know, ss.20, 20ZA, Landlord and Tenant Act 1985, provide for consultation by landlords as a condition of recovery of service charges for certain kinds of works and/or services. If you don’t consult, then the recoverable sum is capped unless you get dispensation from the LVT/FTT(PC). In Daejan v Benson [2013] UKSC 14, Lord Neuberger engaged in some extensive judicial legislating and, in effect, decided that landlords would always get dispensation and that the real issue was what, if any, terms to attach. He suggested that terms would usually relate to reducing the service charge costs to remove any unreasonable cost and also to the reimbursement of the legal costs of the tenants (see our note here).

Well, that is exactly what happened in Regent Park. Interestingly, the UT went out its way to stress that Daejan v Benson did not detract from the statutory question, namely whether it was reasonable to dispense with some or all of the consultation requirements. On the facts, the failings did not affect the scope or price of the works, so the conditions for dispensation were that the landlord pay the legal costs incurred by the tenants before the LVT and not seek to recover the costs of the LVT or the appeal via the service charge.

John Lyon School v Helman [2014] EWCA Civ 17 is, I think, a bit of a no-brainer. If you want to extend your lease/acquire the freehold of your leasehold house, then, in general terms, you can do so under the Leasehold Reform Act 1967. Similar provisions in the Leasehold Reform, Housing and Urban Development Act 1993 entitle leasehold flat owners to extend their leases or collectively acquire the freehold. Both Acts contain qualification criteria, of which the most important is that you’ve owned the leasehold interest for two years. In Helman, the notice was given by a receiver appointed under a charge, in the name of the leasehold owner. But, the leaseholder was bankrupt at the relevant time, such that the lease had vested in his trustee in bankruptcy. That, said the Court of Appeal, was a problem, since the “owner” at the time was not the leaseholder but the trustee.


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.


  1. Cantabriana

    Re: Helman “Both Acts contain qualification criteria, of which the most important is that you’ve owned the leasehold interest for two years”

    Er no, not for collective enfranchisement.

    • J

      I agree, but I said “both Acts” not “both Chapters of the 1993 Act”. :-)

  2. Chris

    Hi J
    I wonder if you are aware of the LVT case coming up on 17/3 /2014, where Camden council is seeking to triple its management fee on its leaseholder service charges?
    Googling “Camden/LVT” takes you to the downloads page on Camden’s website where the statements of case and witness statements are available to download.
    I found an interesting little item in on of the statements, that of Gavin Haynes. In this he declares that his department runs Camden’s Asbestos register.
    This register is a statutory duty, under Health and Safety legislation, and covers every building in LB Camden, but Camden charges it to the Housing Revenue Account, and recharges to leaseholders a calculated proportion. How does that work?
    Next, the Housing Management Department, with a £4 million pa salary bill, spends 25% of its time on ASBO matters. Does the Met know about this theft of their responsibilities?
    If you have any advice, J, or even encouragement, try
    christarpey &
    changing the & for a @
    You know!!

    • J

      No, I didn’t know anything about it. I’m not entirely surprised though. Whilst you may not like this, my experience of acting for public sector landlords is that they are usually charging management fees which don’t cover their costs (i.e. they make a loss). A number have been attempting to change this in recent years and Camden are, it seems just one more.

      I don’t know if the leaseholders have managed to band together and get any representation or not, but, even at this late stage, it would be worth exploring. From looking at the pleadings, I see the council are using Elodie Gibbons of Tanfield Chambers. She’s a very fair and decent opponent and an accomplished lawyer.

      I’m not really in a position to say any more. As we explain in our comments policy, we can’t advise on on-going cases. I’ll keep an eye out for the result though.


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