Category Archives: Residential Tenancies

Very short term lettings breached “private residence” covenant

A long lease contains a covenant “not to use the leased property (or permit it to be used) for any purpose whatsoever other than as a private residence.”

If the long leaseholder advertises the property (a flat) for short term lets and grants a sequence of such lettings, is the leaseholder in breach of the covenant?

In Nemcova v Fairfield Rents Ltd [2016] the United Kingdom Upper Tribunal (Lands Chamber) said to avoid breaching the covenant, there must be a connection between the occupier and the residence such that the occupier would think of it as his or her residence albeit not for ever. “The occupier for the time being must be using it as his or her private residence.”

If the occupier is in the property for a matter of days (rather than weeks or months or years) that is a material pointer to the fact that the occupier is not using the property as a private residence.

To be used as the occupier’s private residence, there must be a degree of permanence extending beyond “being there for a weekend or a few nights in the week.”

Where a person occupies for a matter of days and then leaves the property it cannot be said that whilst occupying they were using the property as their private residence.

The occupation there would so transient that the occupier would not consider the property they were staying in as being their private residence even for the time being.

Each case is depends on it’s facts, relying upon the interpretation of the particular covenant against it’s factual background.

Based on the context in which this lease was granted, and the nature of the proposed relationship between the long lessor and long lessee and taking account the obligations entered into, the appellant had inevitably breached the private residence covenant by granting very short term lettings (days and weeks rather than months).

The tribunal said it was not possible to give a definitive answer to the question posed at the beginning of this piece save to say that ‘It all depends’.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Flat Landlord not responsible for Tenant fall in Common Parts

Where a lease is a lease of a dwelling-house which forms part only of a building, then, under section 11 (1A) of the Landlord and Tenant Act 1985 there is implied into the tenancy agreement a compulsory contractual covenant by the lessor to keep in repair the structure and exterior of the dwelling-house and the structure and exterior of any part of the building in which the lessor has an estate or interest (including drains, gutters and external pipes).

In Edwards v Kumarasamy [2015] Mr Kumarasamy’s assured shorthold tenant of his Flat 10, Mr Edwards, had tripped on an external paved area forming part of the apartment block’s common parts. Although he did not own them, Mr Kumarasamyh had a legal easement to use the front hall, the car parking space and Bin Store and other facilities provided by the head landlord.

The Court of Appeal found that this gave him an “estate or interest” in the paved area where Mr Edwards sustained his accident.

Was that enough to bring the extended covenant into play?

The Court of Appeal said Mr Kumarasamy’s legal easement over the front hall meant that the front hall was a part of a building in which he had an estate or interest.

In Brown v Liverpool Corporation [1983] the Court of Appeal held that steps leading to the front door of a self contained dwelling were part of the exterior of the dwelling.

In the current case, the paved area which led from the front door of the apartment block to the car park was not part of the exterior of Flat 10. However, the paved area was both short and also part of the essential means of access to the front hall in which Mr Kumarasamy did have an estate or interest because of his easement to use it. So the court ruled that the paved area could properly be described as the exterior of the front hall.

Mr Kumarasamy said Mr Edwards should have given him notice of the uneven paving stone and a reasonable opportunity to fix it but the court said such a qualification could not be implied here because the defect was outside the property actually let to Mr Edwards.

So the extended Landlord’s covenant applied to the paved area and Mr Kumarasamy was liable to Mr Edwards under it for the defect.

The Supreme Court has, in Edwards v Kumarasamy [2016] , overturned the Court of Appeal decision:

“….. that decision was wrong. The fact that a piece of property is a necessary means of access to a building cannot be sufficient for it to constitute part of the exterior of that building. Steps separated from the outside of a building by a two metre path cannot, as a matter of ordinary English, be said to be part of the exterior of that building.”

So it was strictly unnecessary to consider the other issues raised by the appeal.

However the Supreme Court agreed with the Court of Appeal that Mr Kumarasamy had an “estate or interest” in the paved area where Mr Edwards sustained his accident. But said that the repairing covenant implied by section 11 was to be interpreted and applied in precisely the same way as a landlord’s contractual repairing covenant. The rule in relation to such covenants was that, until he has notice of disrepair a landlord should not normally be liable for disrepair of property.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Inaccessibility of Landlord did not dispense with consent requirement

A tenant’s covenant not to carry out alterations without the landlord’s consent is not a covenant by the landlord to give consent, or to be available to receive requests for consent.

If the landlord cannot be found, so that consent cannot be requested, the tenant may not carry out the alterations without being in breach of covenant.

In relation to residential tenancies, section 47(1) of the Landlord and Tenant Act 1987 (“the 1987 Act”) requires that a landlord’s name and address be included in every demand for rent and other sums payable by a tenant to his or her landlord.

Section 48(1) of the 1987 Act also requires tenants to be supplied with an address in England and Wales at which they may communicate with their landlord, including in connection with proceedings.

Where a landlord fails to comply with either section 47(1) or 48(1), sections 47(2) and 48(2) say any rent, service charges or administration charges otherwise due from the tenant to the landlord are treated as not being due until the particular requirement is complied with.

In the Upper Tribunal (Lands Chamber) case of Raja v Aviram [2016] no rent or service charge was demanded by Mr Raja and he supplied no address to Mr Aviram.

The Tribunal said no statute said that a failure by a landlord to provide a name and address meant that a tenant could carry out alterations or take other prohibited steps without the requirement to obtain the landlord’s consent.

Here, Mr Raja could have obtained the name and address of his landlord by searching the Land Register, which he did at one point.

Even if he did not have that address by the time the works were carried out, there was simply no basis on which he was excused the obligation of seeking consent just because his reasonable efforts to locate his landlord had been unsuccessful.

A breach of covenant had been committed by the creation of at least one new hole in the wall of the building for a replacement boiler without the consent of Mr Raja.

This was still the case even though Mr Raja would have consented when satisfied that the work was to be carried out competently.

A modest breach of covenant had been committed. Given the circumstances of that breach it was extremely unlikely that this valuable lease could be forfeited without relief against forfeiture being granted. Though Mr Raja might have been entitled to nominal damages if he had gone to court.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Right to manage: notice of invitation to participate invalid

The purpose of a notice of invitation to participate under section 78 of the Commonhold and Leasehold Reform Act 2002 is to afford to all qualifying tenants of flats in the premises the opportunity to become members of a right to manage (“RTM”) company. Qualifying tenants are entitle to membership (section 74(1)(a)) and in order to give effect to that entitlement the RTM company is required to inform all qualifying tenants who are not already members of its existence, present membership and intentions.

In the Upper Tribunal (Lands Chamber) case of Triplerose Ltd v Mill House RTM Company [2016] the RTM Company was formed in 2011 and gave notices of invitation to participate to each of the qualifying tenants of the 6 flats on 19 March 2013. The notices of invitation to participate wholly omitted the notes which should have been included as part of the prescribed form.

The Tribunal said that the inclusion of the notes in the prescribed form was essential to the validity of a notice of invitation to participate.

So the documents served on the qualifying tenants, having omitted the notes in their entirety were not notices of invitation to participate in accordance with section 78.

Therefore the RTM company could not under section 79(2) give a claim notice seeking to acquire the right to manage.

So the RTM Company had not acquired a right to manage.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Right to Manage Company Articles could only have been referring to the whole building

Where a document, including a company’s articles of association, is ambiguous or reasonably capable of more than one meaning, the document will be given the meaning which is more consistent with the parties’ presumed intention. Where a document contains a clear mistake, and it is obvious what the parties must have intended, the document will be interpreted so as to accord with that intention.

In the Upper Tribunal (Lands Chamber) case of Avon Ground Rents Ltd v 51 Earls Court Square RTM Company Ltd [2016], the Company’s articles of association were in the model form prescribed by the RTM Companies (Model Articles) Regulations 2009. Article 2 recorded that the Company’s name was “51 Earls Court Square, RTM Company Ltd.”

However in the Company’s articles “the Premises” were defined as “Flat 1-13, 51 Earls Court Square, London SW5 9DG”.

The tribunal said the informed reader, might construe the words “Flat 1-13, 51 Earls Court Square” to mean the 13 flats, numbered 1 to 13, in the building known as 51 Earls Court Square, or alternatively to mean the building at 51 Earls Court Square, which comprised those 13 flats.

But the reasonable person would have to ask themselves “whether the object of the Company could sensibly be the acquisition of the statutory right to manage thirteen individual flats (an object which is legally incapable of fulfilment), or whether the parties must have intended that the right would extend to the whole of the Building [which] comprises the thirteen flats.”

The articles could only be interpreted to mean that the parties intended to refer to the whole of the Building, as it was the only unit of property at 51 Earls Court Square which was “a self-contained building or part of a building, with or without appurtenant property” and thereby qualified to be the subject of an application for the acquisition of the right to manage.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Service charge wording too narrow to cover costs of suing defaulting tenants.

Does the language of a service charge provision in a lease permit the landlord to recover money which it has spent in contesting legal proceedings against the leaseholders of flats in a residential building?

In Arnold v Britton [2015] Lord Neuberger of the Supreme Court said “the court should not “bring within the general words of a service charge clause anything which does not clearly belong there”.

In the Upper Tribunal (Lands Chamber) case of Geyfords Ltd v O’Sullivan & Ors [2015] paragraph 6 of the service charge covered:

“All other expenses (if any) incurred by the Lessors or their managing agents in and about the maintenance and proper and convenient management and running of the Development”.

The tribunal said “management” may sometimes include obtaining professional advice, including legal advice, and in some circumstances it might involve litigation. E.g. the assistance of the court may be required because the leases of flats are unclear, so the outcome of the proceedings is of concern to both the landlord and to every leaseholder.

It could be said “running” suggests a focus on more day to day or mechanical activities, while “management” is more long term or strategic, but it was neither informative or helpful to dissect the language in that way. It might be said as well that both management and running, when used of a building and its immediate environment, are concerned with the condition of the building and activities there, and that the expression taken as a whole is inappropriate to refer to litigation over the liabilities of tenants to their landlord. Such litigation was concerned with enforcing personal rights and obligations rather than with the physical fabric of the building. The qualifying words “proper and convenient”, might also be thought to be words of limitation, suggesting expenditure which is routine rather than exceptional.

Proceedings to enforce the obligation of an individual leaseholder to make a payment to the landlord did not naturally fall within the scope of “management and running”.

The parties to a lease were unlikely to think such general words were enough to show an intention that any money lost by the landlord in litigating against tenants should be recharged to all the tenants in the building. In the Court of Appeal case of Sella House Ltd v Mears [1989] Taylor LJ said he would “”require to see a clause in clear and unambiguous terms” before being persuaded the parties had intended that a tenant who paid his rent and service charges would be obliged to subsidise the landlord’s costs of proceedings against his fellow tenants who were defaulters”.

Accordingly paragraph 6 was less clear than was to be expected if the cost of litigation against defaulting leaseholders had been intended to be recovered as costs and expenses of “proper and convenient management and running of the Development”.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Can a Landlord recoup defence costs and damages from own breaches?

Can a landlord recoup damages and legal costs arising from it’s own breach of covenant through a service charge?

In the Upper Tribunal (Lands Chamber) case of Fairbairn v Etal Court Maintenance Ltd [2015] one of the services the landlord could recharge under the service charge was doing “all other acts and things for the proper management administration and maintenance of the blocks of flats as the Lessor in its sole discretion shall think fit.”

The Tribunal said such a general charging provision was, in principle, wide enough to cover the costs of legal advice or even, where appropriate, of litigation.

However a sum paid to meet a successful damages claim for breach of covenant is not expenditure on the proper management and administration of the buildings.

Also, the legal work here was not so much advice on whether repair work was within the landlord’s covenant. It was rather defending the landlord’s failure of compliance.

In short, the steps required of the landlord resulted from the landlord breaching it’s own obligations under the lease.

The landlord’s repairing covenant required it to maintain the unlet parts of the buildings, including their foundations and structure, in good and substantial repair and condition.

It was precisely because the proper management and administration of the building had been neglected, for however short, that proceedings were commenced by the tenant. So the damages and legal costs were not recoverable through the service charge.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Payment of lease extension completion statement did not oust LVT’s judgement on costs

By section 60 of Leasehold Reform Housing Urban Development Act 1993 (the 1993 Act) it is the enfranchising residential tenant who must pay the costs of the extension lease. Where those costs are in dispute there is a mechanism for completion to take place without resolution of that dispute. This is provided by section 56(3) of the 1993 Act.

Whether the Leasehold Valuation Tribunal (LVT) has jurisdiction depends, to some extent, on section 91(1) of the 1993 Act. It says the LVT only has jurisdiction “in default of agreement” as to the amount of costs recoverable under section 60.

In the Upper Tribunal (Lands Chamber) case of Friends Life Ltd & Anor v Jones [2014] the central issue was whether a binding agreement as to the amount of the solicitors’ conveyancing fees occurred, or was made, when the residential tenant’s solicitor paid, without demur, the completion monies requested by the intermediate and head landlords, at completion of the extension lease, on 22 March 2013.

The Tribunal determined that there was no agreement as to costs because by its surveyor the residential tenant had five weeks earlier issued an application in the LVT under section 92(1)(d) of the 1993 Act seeking determination of the reasonable costs payable and, a week prior to the completion of the extension lease, the LVT had issued directions without hearing requiring the intermediate and head landlords to send a detailed statement of the costs which they sought under section 60(1) of the 1993 Act.

Seen in that context, the payment of the completion monies could not amount to an unequivocal acceptance of the 22 March 2013 cost figure. Rather, the payment of the full completion fees accorded with section 56(3) of the 1993 Act, which requires that where the amount of costs is not agreed the tenant cannot require completion of the extension lease without tendering the amount “so far as ascertained” of the costs for which the tenant is liable under section 60. Here the amount of the costs was “ascertained”, and full payment had been tendered and made, even if the amount of the costs had not been “agreed” because any costs in excess of £722 plus disbursements and VAT were disputed as was clear from the residential tenant’s surveyor’s section 92(1)(d) application.

In short, the payment of the costs on 22 March 2013 was merely the provision of full “security” so as to enable completion of the extension lease to take place pending the outcome of the residential tenant’s surveyor’s section 92(1)(d) application to the LVT. The fact that the tenant was acting by two representatives, or agents, did not affect that conclusion. Their separate acts were to be treated as the joint acts of the principal i.e. the residential tenant.

So the LVT had jurisdiction to decide the cost issue. That jurisdiction had not been ousted by any “agreement” as to the amount of costs recoverable under section 60.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Flats: Necessary consents to Lease changes should have been got earlier

Varying flat leases under section 35 of the Landlord and Tenant Act 1987 (as amended) can be contentious, expensive and time-consuming.

To allow the application to be made to a leasehold valuation tribunal for an order without first establishing whether it is sufficiently supported or insufficiently opposed by the required number of the flat owners, would be to put the cart-before-the-horse, and a complete waste of time and money.

In Simon v St Mildreds Court Residents Association Ltd [2015] the application was in respect of more than 8 leases.

So it had to be shown that it was not opposed, for any reason, by more than 10% of the total number of the parties concerned and that at least 75% of that number consented to it.

To calculate whether or not 75% of the parties concerned had consented to the application, the landlord constituted one of the parties (section 37(6)(b)).

The Upper Tribunal (Lands Chamber) said, the necessary consent to:

“the application … for an order varying each of those leases in such manner as is specified in the application” (section 37(1))

must have been achieved by or at the time the application was issued because of the mandatory wording of section 37(5) that:

“any such application [that is one made under sub-section (1)) shall only be made if” the requisite majority “consent to it”.

The issue of whether the application is not opposed for any reason by more than 10% of the total number of the parties concerned needed to be addressed by or at the time the application to the leasehold valuation tribunal was made.

This followed from the wording of the provision, which said that the application “shall only be made if” (etc).

So any consent received or opposition expressed after that time did not count towards compliance with section 37(5)(b).

In short section 37(5)(b) imposes two jurisdictional pre-requisites or hurdles which must or “shall” be satisfied to qualify the applicant to make an application under section 37(1):

1. that the application is not opposed by more than 10% and,

2. that it is consented to by 75%

of the parties concerned.

This blog is posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Flat leases: modification of defective lease terms in new leases under Leasehold Reform, Housing and Urban Development Act 1993

Chapter II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”) gives the tenant of a flat the right, subject to paying a premium, to be granted a new lease of the flat as a replacement for the existing lease, for a term expiring 90 years after the last day of the existing lease.

Section 57, “Terms on which new lease is to be granted”, provides:

“(1) Subject to the provisions of this Chapter (and in particular to the provisions as to rent and duration contained in section 56(1)), the new lease to be granted to a tenant under section 56 shall be a lease on the same terms as those of the existing lease, as they apply on the relevant date, but with such modifications as may be required or appropriate to take account:

(a) of the omission from the new lease of property included in the existing lease but not comprised in the flat;

(b) of alterations made to the property demised since the grant of the existing lease; or

(c) in a case where the existing lease derives (in accordance with section 7(6) as it applies in accordance with section 39(3)) from more than one separate leases, of their combined effect and of the differences (if any) in their terms.

(6) Subsections (1) to (5) shall have effect subject to any agreement between the landlord and tenant as to the terms of the new lease or any agreement collateral thereto; and either of them may require that for the purposes of the new lease any term of the existing lease shall be excluded or modified in so far as

(a) it is necessary to do so in order to remedy a defect in the existing lease; or

(b) it would be unreasonable in the circumstances to include, or include without modification, the term in question in view of changes occurring since the date of commencement of the existing lease which affect the suitability on the relevant date of the provisions of that lease.”

In the United Kingdom Upper Tribunal (Lands Chamber) case of Rossman v The Crown Estate Commissioners [2015] the main issue was whether, under section 57 of the 1993 Act, the term of an existing lease, of Flat 124A, which apportioned the lessee’s liability to a service charge contribution on a fixed percentage basis ought to have been modified in the new lease to be instead a fair proportion based on the floor space of the flat, given that the aggregate of service charge contributions for which the lessees were currently liable under their existing leases was well in excess of 100% of landlord’s expenditure! Quite simply the existing lease of Flat 124A, and others, entitled Whitehall Court (Investments) Ltd., as landlord, to collect from the tenants of Whitehall Court almost 30% more by way of service charges than it was actually spending on services.

So there had been a voluntary abatement scheme, which operated, without the force of contract, to reduce Mr Rossman’s liability for service charge contributions to a percentage figure materially below the figure in his lease. The scheme had a similar effect on the corresponding provisions in the other Whitehall Court leases too.

Here the Tribunal had little difficulty in finding that there was a defect in the existing lease of Flat 124A, and it was a sufficiently serious defect to require a remedy.

To include in the new lease a term replicating the provision for a fixed 0.8% service charge contribution in the existing lease would be wrong.

It could not be right for a defect of that nature to be incorporated into the new lease of Flat 124A. To do that would run contrary to Parliament’s evident intention in section 57(6) of the 1993 Act.

In summary:

The term in the existing lease of Flat 124A, which required from the lessee a fixed service charge contribution of 0.8%, was a defect of the type contemplated in section 57(6)(a) of the 1993 Act, and a modification of that term was required in the new lease.

It might also be that, in view of changes which had occurred since the commencement of the existing lease, the inclusion of that term, unmodified in the new lease, would be unreasonable in the sense contemplated by section 57(6)(b). So the disputed term must now be modified under that sub section too.

So, the case should go back to the First-tier Tribunal so that it could determine, in the light of full evidence and submissions, how the service charge provision in Mr Rossman’s new lease should be formulated.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.