As 2016 comes to a close, the case law developments from the Upper Tribunal (Lands Chamber) continued at a brisk pace throughout the year. The highlighted decisions below will, no doubt, continue to be cited by legal practitioners, landlords, leaseholders and other interested parties for some time.
23 Dollis Avenue (1998) Ltd v (1) Vejdani (2) Echraghi [2016] UKUT 365 (LC):
The Upper Tribunal considered the meaning of s.20 LTA 1985 where a landlord had failed to comply with the consultation requirements in circumstances where the costs had yet been incurred.
The landlord consulted leaseholders in respect of proposed works, and estimates were obtained between £34,200 and £39,060. Before the works commenced, the leaseholders issued proceedings in the FTT challenging the advance demands. The Tribunal held that the consultation process was defective. It followed that the advance demands were unreasonable.
The landlord successfully appealed to the Upper Tribunal; although the consultation process had been defective, this did not necessarily mean that the advance demands were unreasonable.
Nemcova v Fairfield Rents Limited [2016] UKUT 303 (LC):
Ms Nemcova was the leaseholder of a flat who admitted letting it to various business visitors on a short-term basis. For the remaining period, the flat was her main residence albeit the flat remained empty for long periods.
The landlord sought a determination, pursuant to section 168(4) of the Commonhold and Leasehold Reform Act 2002, that Ms Nemcova was in breach of the lease. Her lease contained a covenant prohibiting her from using the flat for “any purpose whatsoever other than as a private residence.” The FTT determined that the covenant in question required the flat to be occupied “as a home”; multiple lettings to various people for short periods of time was incompatible with this requirement. Ms Nemcova unsuccessfully appealed to the Upper Tribunal.
Section 131 of the Housing & Planning Act 2016:
Although not yet in force, section 131 of the 2016 Act provides that where a long lease permits the recovery of legal costs as an administration charge (Sch.11, Commonhold and Leasehold Reform Act 2002), a leaseholder will be able to seek an order reducing or extinguishing his liability for those costs.
This will give courts and tribunals a discretionary power to restrict the ability of a landlord to recover incurred legal costs from the leaseholder. It remains to be seen how courts and tribunals will consider section 131 applications.
Fairhold Freeholds No. 2 Limited v Moody [2016] UKUT 311 (LC):
In Fairhold Freeholds No. 2 Limited v Moody, the leaseholder failed to inform the freeholder that he had moved address and, therefore, did not receive ground rent demands. In default of the relevant payments, the landlord sent a letter threatening court proceedings; a £50.00 administration charge had been added to the debt by virtue of reliance on an indemnification provision within the lease.
The FTT determined that the relevant clause did not entitle the landlord to include an additional administration charge. On appeal, the Upper Tribunal confirmed that the clause was not a general provision enabling the landlord to cover costs expended.
Jeff Hardman is a Barrister at Arden Chambers
