The Practical Lawyer

Landlord and tenant – residential

LVT - cost traps

In general, a successful party cannot recover costs from the other side in the LVT (despite the fact that many cases involve a huge amount of work with numerous witness statements, and complex issues of law to consider).

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Possession - Article 8

The Supreme Court has confirmed that, as general rule, Article 8 only needs to be considered if it is raised by a defendant in possession proceedings and, if it is raised, a court need only consider the issue summarily.
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Possession - non-attendance

If T does not attend a possession hearing, can he then apply to have the possession order set aside?
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Enfranchisement - 'common part'

Ts will be encouraged by a recent CA decision where it was decided that a caretaker's flat was a 'common part', and thus could be acquired by a nominee purchaser under a collective enfranchisement claim.
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Enfranchisement - part of roof

L had granted a 999-year lease on a roof surface and the airspace above, together with the right to construct flats on the roof. The T's nominee purchaser did not want all of that, but only those parts of the roof that were required for the maintenance of the rest of the building.
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HMOs - licence

An HMO is a dwelling house used by three or more unrelated people who share basic amenities (eg bathroom and kitchen). They are typically three stories high.
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Service charges – failure to consult

The service charge provisions in LTA 1985 require L to consult with T if the costs to be incurred will result in any T contributing more than £250. Under the Consultation Regs, L has to serve a notice on T, setting out at least two of the estimates he has received, and then make all of the estimates available for inspection. L then has to invite observations on those estimates within 30 days. 

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Sale and leaseback – overriding interest?

Can sale and leaseback occupiers claim to be in ‘actual occupation’, and thus be protected from possession proceedings brought by the mortgagees of defaulting borrowers? 

The High Court has recently heard a test case which involved owners who had entered into sale and leaseback arrangements. In return, they had been given tenancies, but difficulties arose when the buyers had defaulted on their mortgages and their lenders had therefore sought possession against the current occupiers (who were the former sellers).

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Enfranchisement – deferment rate

The ‘deferment rate’ is important when valuing the amount to be paid by T on a leasehold enfranchisement claim against L. As part of the valuation process, you need to determine the future value of the freehold once the lease has expired, and to then give a discount for accelerated receipt of the money; that is done by applying an interest rate to the present freehold value, which is referred to as a ‘deferment rate’. In simple terms, the lower the deferment rate, then the higher the price to be paid by T. Thus, there has been much argument about the correct deferment rates that apply on enfranchisement claims. 

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Service charges – ‘on account’

LTA 1985 sets out the rules on residential service charges payable by long lessees. In particular, if L incurs a cost then he must demand payment of that service charge within 18 months of incurring that cost (s20(B)). Alternatively, if that is not possible then he must – within the 18-month period – notify T that the costs had been incurred and that T will subsequently be required to pay a service charge in respect of them. 

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