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Landlord and tenant – residential

Service charges – failure to consult

We have frequently mentioned the importance of the consultation procedures when dealing with residential service charges. A failure to comply with those procedures means that L is restricted to claiming £250 (maximum) from each T.

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Enfranchisement – business

When the right to enfranchise (to buy the freehold) was introduced by LRA 1967, there was a requirement that T had occupied the premises as a ‘residence’ for at least five years. That five-year period was reduced to three years in 1993, and the residence requirement was largely abolished by CLRA 2002.

Under CLRA 2002 the standard test is now one of two years of ownership (not residence). As far as businesses are concerned, the right to enfranchise does not apply to an LTA 1954 business tenancy, unless T has been occupying the ‘house’ as his ‘residence’ for at least two years (which would be impossible for a company).

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Injunction – Article 6

Until recently, the view of the ECHR was that Article 6 would not be relevant at an injunction, or other interim proceeding, because it would not be a conclusive ‘determination of a civil right’. Thus, Article 6, and other human rights issues, would only be relevant at a full trial.

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Set aside – ‘trial’?

A recent CA decision has radically altered the landscape in the world of set-aside applications. It has done this by focusing on the meaning of ‘trial’, and the result is that what many of us have always thought of as a trial, will not be a trial at all. The case involved the possession claim but is of much wider importance.

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Enfranchisement – low rent test

Under LRA 1967, the right to enfranchise (or to have a lease extension) was originally limited to leases where T was paying a ‘low rent’.

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Service charges – consultation

The Commonhold and Leasehold Reform Act 2002 has inserted new service charge consultation procedures into LTA 1985.

Consultation is required in respect of ‘qualifying works’ (ie ‘works on a building or any other premises’), or ‘a qualifying long-term agreement’ (ie an agreement that will last more than 12 months). If the works will require a contribution from any one T which exceeds the relevant threshold (£250 for qualifying works; £100 for qualifying long-term agreements) then the consultation provisions apply. There are three separate procedures:

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Human rights – RSLs

The CA has held that registered social landlords have to consider their T’s human rights when exercising housing management and housing allocation functions.

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Commission – Foxtons

In an important decision, the High Court has ruled that various commission clauses in Foxtons’ contracts with residential Ls are unenforceable. It is reckoned that there are around 15,000 letting agents using similar conditions, and accordingly this decision is important for the whole residential lettings industry. The end result is that many of these agents will face claims for refunds.

The case was brought by the OFT in respect of two types of commission clauses:

these entitled Foxtons to charge commission if T renewed the lease (even if Foxtons had no involvement in the renewal);

sales commission: this entitled Foxtons to a commission if L sold the property to T.

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Service charges – notices

Remember that it is vital that L serves any service charge notices on a long lessee at the correct address. A prudent L or managing agent should always check at the Land Registry, or Companies House, that the address for the T is correct.

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Tenancy deposit – non-supply of information

Under the Tenancy Deposit Scheme, L has 14 days in which to deposit the money with an authorised scheme, and 14 days to give ‘prescribed information’ to T. Failure on either account means that the court must order L to pay T a sum of money equal to three times the amount of the deposit.

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