Leasehold Valuation Tribunal

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Leasehold Valuation Tribunal

• Enfranchisement of leasehold property
• Adjudication of disputes over management of
  leasehold property

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Enfranchisement

• EITHER
• Acquisition of freehold
• OR
• Grant of extended lease
• For houses Leasehold Reform Act 1967
• For flats Leasehold reform Housing and Urban
  Development Act 1993

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Enfranchisement

• Houses
• Property must be held on a long lease at a low
  rent, and
• Leaseholder must have been the tenant for the
  past two years at least, and

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Enfranchisement

• If tenancy entered into before 1 April 1990 RV
  did not exceed 400 (Gtr London) or 200
  (elsewhere), or
• If tenancy entered into after 1 April 1990
  tenancy qualifies (where R is less than 25000)
  under formula

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Enfranchisement (House)

• Acquire either freehold, or
• Extended lease for a term of fifty years after
  the expiration of the present lease on the same
  terms
• Save that the rent for the extended term is a
  modern ground rent (i.e. the letting value of
  the site alone for the uses to which house put
  since term commenced)

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Enfranchisement (Flat(s))

• EITHER freehold acquired collectively by
  qualifying tenants through a nominee purchaser,
  or
• Extended lease acquired individually by a
  qualifying tenant of his or her flat
• New lease in substitution for existing lease at a
  peppercorn rent for a term expiring ninety years
  after term date of existing lease

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Enfranchisement

• Problems mostly those of time
• But matters before LVT may include
• extent of land to be included in collective
  enfranchisement
• other terms of enfranchisement or of extended
  leases
• costs, and always
• the price

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Management Service charges

• An amount payable directly or indirectly for
  services, repairs, maintenance, improvements or
  insurance or the landlords costs of management
  (Section 18 L T A 1985)
• Payable to the extent that it is reasonably
  incurred and, if for services or the carrying out
  of works, only if the services or the works (as
  case may be) are of reasonable standard (Section
  19 L T A 1985)
• Finchbourne v Rodrigues 1976 3 AER 581 CA

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Management Service charges

• Section 27A Landlord Tenant Act 1985
• LVT may determine
• amount payable
• by whom payable
• to whom payable
• when payable
• how it is payable

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Management Service charges

• Some Problem areas
• Accounting (new notification and accounts
  provisions not yet fully in force)
• Insurance commissions
• Lease provisions
• Summaries of costs
• Time limits on recovery Section 20B
• Limitations

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Management Administration charges

• Schedule 11 CLARA
• Relates (only) to amounts payable in addition to
  rent for
• Applications for and grants of approvals under
  lease
• Provision of information or documents
• In respect of a failure by a tenant to make a
  payment under his lease by the due date, or
• in connection with breach or alleged breach of
  covenant
• Payable only so far as charge is reasonable

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Management- Administration Charges

• Problems
• Primarily arise from statutory definition
  tendency to confuse with service charges, but
  need for separate application.

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Management Section 20 Notices

• LVT jurisdiction enables it to grant waiver in
  respect of need to serve section 20 notices in
  respect of work carried out since 31 October 2003.

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Management Section 20 Notices

• Problems
• Complicated transitional provisions in respect of
  work carried out at around time of change of
  jurisdiction from CC to LVT CC still has
  jurisdiction to grant waiver under section 20(9)
  in respect of earlier work.
• Separate application
• Cases of urgency
• Situation when it becomes apparent during a
  service charge hearing that a necessary notice
  was not served!

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Management Appointment of Manager/Receiver

• Grounds
• Breach of obligation owed to tenant
• Unreasonable service charges
• Unreasonable variable administration charges
• Failure to hold service charge monies on trust
  (in a designated account)
• Failure to comply with a management code
  designated under S. 87 LRHUDA 1993

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Management Appointment of Manager/Receiver

• AND
• That it is just and convenient to make the Order
• (the mere fact that grounds to make an Order
  exist do not necessarily mean that it is
  appropriate to make one)
• OR
• Where LVT is satisfied that other circumstances
  exist that make it just and convenient for the
  Order to be made

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Management Appointment of Manager/Receiver

• Principle
• This is a problem solving jurisdiction.
• Problems
• Failure to give (or to give proper) preliminary
  notice
• Need for tailored individual and appropriate
  Order in each case
• Ongoing contracts / outstanding contributions
• Protection of Manager/Receiver
• Provision for his costs

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Management Variation of Leases

• Variation without agreement where lease of a
  flat fails to make proper provision for
• Repair or maintenance of flat, block or other
  common parts
• Insurance of block
• Repair or maintenance of installations necessary
  to ensure reasonable standard of accommodation
• Provision or maintenance of any services
  necessary to ensure reasonable standard of
  accommodation

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Management Variation of Leases

• Recovery by one party from another of expenditure
  incurred or to be incurred by him for the benefit
  of another party or other parties
• Computation of a service charge payable under the
  lease
• Any other matters prescribed by the Secretary of
  State (presently none have been prescribed)

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Management Variation of Leases

• Voluntary variation if
• In a block of less than nine flats not more than
  one of all the parties to the leases dissents, or
• In a block of nine or more flats, 75 of parties
  agree, and not more than 10 object

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Management Variation of Lease

• Problems
• No case law
• Very individual approach
• Applicants must provide drafts of proposed
  variation
• Does S 35(4) really mean that provision for
  computation is not satisfactory only if the total
  recoverable does not add to 100?
• Field of variation without consent is very
  narrow.

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Right to Manage

• LVT has six jurisdictions
• Determining disputes about qualification and
  eligibility for RTM.
• Determining that RTM company is entitled to right
  to manage when landlord cannot be traced.
• 3. Determining costs incurred by landlord in LVT
  proceedings if LVT has dismissed application

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Right to Manage

• Determining amount of uncommitted service charges
  to be paid to RTM company by landlord, third
  party or an LVT appointed manager
• Determining disputes over the grant of approvals
• 6. Determining that a new RTM may arise within
  four years after a previous RTM has ceased to be
  exercisable

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Right to Manage

• Problems
• Lie primarily in the definitions used to
  identify qualification
• Especially in the definition of premises to
  which the provisions apply section 72 CLARA
• Surprisingly few applications to determine
  amount of uncommitted funds to be handed over

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Management Forfeiture

• LVT has jurisdiction to determine whether or not
  a breach of covenant has occurred prior to any
  order for forfeiture of the lease on the grounds
  of such breach.
• Forfeiture order made by County Court of basis
  of LVTs factual finding
• No real problems to date, but not yet frequently
  invoked

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Insurance

• A tenant may apply to the LVT to challenge the
  Landlords choice of insurer where lease requires
  tenant to insure, but to do so with a Company
  nominated by the landlord. (Para 8 of Schedule to
  LTA 1985)
• Very rarely invoked.

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Estate management

• LVT can adjudicate on reasonableness of estate
  management charges (section 19 Leasehold reform
  Act 1967 and section 159 CLARA)
• No recorded cases anywhere to date.

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Summary

• Enfranchisement (Flats or Houses)
• Service charges
• Administration charges
• Dispensation with section 20 notice
• Appointment of Manager/Receiver
• Variation of Leases
• Right to Manage
• Forfeiture
• Challenge to nominated insurer
• Estate Management charges

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