Case Law

The applicants had already applied to the LVT for the appointment of a manager.
This application had been successful in 1999 and there had been a variation in 2001, re-appointing the same manager until the end of 2005. They applied again to extend his appointment for a second time. The respondent freeholder objected on three grounds; firstly they argued that the Order appointing the manager did not contain any provision enabling it to be extended; secondly they argued that s24(9) Landlord and Tenant Act 1985 did not confer on the LVT a jurisdiction to vary an order; finally they argued that it was not just and covenient for the management order to continue.
The LVT rejected these arguments. It held that the absence of an express clause permitting the manager’s appointment to be extended was not fatal. The LVT retained a general discretion to review the appointment of the manager and the terms of his appointment. Secondly, s24(9) permitted the LVT to vary or discharge any order as it felt appropriate. Parliament cannot have intended parties to have to issue a new application, with the associated costs, both financial and in terms of time, every time they wanted simply to preserve the status quo. Finally, it clearly was just and convenient to make the order sought. The managing agents were doing an excellent job and should be permitted to continue to do so.
Analysis
The decision is not particularly surprising, but it is welcome as a confirmation of the commonly accepted position, namely that the LVT is able to vary management orders as it feels appropriate. This must be right. The manager appointed under s24 is a servant of the LVT, not the parties. The LVT must retain powers to deal with him and the terms of his appointment.
006

The applicant sought a determination of the reasonableness of administration charges demanded in respect of the preparation and service of a s146 Law of Property Act 1925 notice and interest claimed on arrears of service charges.
The LVT found that the notice was defective and could never have formed the basis of a claim for forfeiture. In those circumstances it ruled that the costs of the notice were irrecoverable.
The LVT also found that it had jurisdiction to consider the interest charges. Interest was alleged to be payable as a consequence of a failure by the tenant to pay a sum due and, as such, was an administration charge. Whilst the rate of interest was found to be reasonable, the amount claimed was reduced as it was premised on a mistaken belief as to the amount outstanding.
Analysis
The LVT’s jurisdiction over administration charges has not really had the impact that many thought it would. The definition of administration charges is very wide and, as cases like this one show, it has the potential to cover numerous charges which were previously thought to be unchallengable.
007

The Welsh Assembly has approved a new code of practice for property managers in Wales. The Rent Only Residential Management Code2 , as published by RICS, has approved and the previous version of the Code, which was approved under the Approval of Codes of Management Practice (Residential Property) Order 1996 has been withdrawn.
The change is effective from 1 February 2006.
005

The tenant applied to the LVT under s27A Landlord and Tenant Act 1985 for a determination that certain of the freeholders costs had been unreasonably incurred.
The tenant was not the direct tenant of the freeholder, but was the tenant under an intermediate lease. There was, therefore, no landlord-tenant relationship between the two parties.
At the LVT, the freeholder objected that the LVT lacked jurisdiction. It contended that its costs were not “service charges” as against the tenant and, in any event, the LVT had no jurisdiction where there was no landlord-tenant relationship. The LVT rejected both submissions.
On appeal to the Lands Tribunal, the LVT’s reasoning was upheld. The paying undertenant should be able to make an application against either his superior landlord or the mesne landlord. The mesne landlord may well have no interest in dealing with the dispute, and may well have no knowledge of the items of work which give rise to the dispute.
The Lands Tribunal was particularly influenced by the wording of s27A. The wording of s27A does not include any restriction on who may apply to the LVT for a determination of service charges, rather, it simply provides that “an application may be made to a leasehold valuation tribunal”. To the extent that third parties with no real interest in the dispute might abuse this power, the Lands Tribunal was confident that such abuse could be prevented by the use of Regulation 11 of the LVT’s Procedural Regulations.
Analysis
This is one of a number of decisions of the Lands Tribunal included in this edition of the LVT Bulletin, all of which show the Lands Tribunal’s tendency to interpret the legislation concerning the LVT’s jurisdiction in the widest possible manner.
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