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Landlord and tenant – residential

Costs – use s146 instead?

The Upper Tribunal has made it clear that the FTT will only make a costs order in exceptional circumstances. But, can L use the wording of the lease to claim the costs (ie on a contractual basis)?

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Signature – electronic

In July 2016 the Law Society issued guidance on the use of electronic signatures, so as to encourage their more widespread acceptance. The advice is general and does not favour one specific method of electronic signature; moreover, it covers devices such as a picture of a signature, e-signing software and other methods.

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Service charge – L’s name and address

Under s47 LTA 1987 a service charge demand will be invalid if it does not contain the name and address of L. But, failure to include L’s name and address is not a fatal error – the demand remains invalid until such time as the name and address are given, but once that information is provided the service charge will then become due.

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Service charges – consultation with sub-Ts?

LTA 1987 requires L to consult with T in respect of ‘qualifying works’ or before entering into a ‘qualifying long-term agreement’.

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Intermediate L – repair obligation?

Any residential L has an obligation ‘to keep and repair the structure and exterior of any part of the building in which L has an estate or interest’ (s11 LTA 1985).

But, how does this work in the context of an intermediate L (eg a buy-to-let investor who is T under a long lease of a flat, who then sub-lets to a short-term T under an assured shorthold tenancy)? The answer is that s11 applies to that intermediate L, to the extent that the intermediate L has an ‘estate or interest’ in the property. Thus, if the assured shorthold T is injured because of a defect in part of the premises in which the intermediate L has an ‘estate or interest’ then damages will be recoverable under s11; conversely, if the injury occurs on part of the premises in which the intermediate L does not have an ‘estate or interest’ then there will have been no breach of the statutory duty to repair. Instead, the assured shorthold T will have to rely upon the intermediate L having been given notice of the defect (which then puts the intermediate L on notice to repair the defect).

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Lease extension – marriage value

If a long-lessee enfranchises under the 1993 Act, then there can be a collective acquisition of the freehold, or the grant of a lease extension for an additional 90 years. L will have to be paid a premium which will be a total of (i) the diminution in the value of L’s interest in the flat (and other losses), plus (ii) L’s share of the ‘marriage value’.
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Repair – missing bannister

L’s obligation to ‘keep and repair the structure and exterior of the premises’ (s11 LTA 1985) is concerned only with repair. In a recent case, T fell from a staircase which did not have a bannister. But it was held there was no liability under s11 – because there had never been a bannister during the term of the tenancy, and to install a bannister would go beyond the scope of ‘repair’. Sternbaum v Dhesi [2016] EWCA Civ 155 (access free at www.practicalconveyancing.co.uk).
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Long lease – no sub-letting?

It is not uncommon for a long lease to prohibit T from using the flat other than as a single private dwelling house in the occupation of T and their family. The Upper Tribunal has confirmed that this amounts to a prohibition on sub-letting (even if there is no express provision in the lease against sub-letting). Thus, long-lease covenants might prevent sub-letting even if there is no express bar on sub-letting.
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Right to manage – redevelopment?

Suppose L wants to put a new flat on the top of an existing block of flats which is managed by a right to manage company.

If the right to manage has been exercised under CLRA 2002, then that company assumes the management functions in respect of the property (ie services, repairs, maintenance, improvements, insurance and management). Moreover, L is then prohibited from being involved in such activities (unless otherwise agreed by the RTM company). How do those rights stand when L wants to build a new flat on the roof and roof space which it owns? In particular, can the RTM company prevent L’s redevelopment?

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Costs – First-Tier Tribunal

The tribunal can only make a costs order against someone who has acted ‘unreasonably in bringing, defending or conducting proceedings’. But, what does ‘unreasonable’ mean?

The Upper Tribunal has now given guidance on this. In essence, it has adapted the criteria for deciding on wasted costs. The leading case on the award of wasted costs is Ridehalgh [1994] which gave guidance on ‘unreasonable’ being behaviour that goes beyond ‘reasonable explanation’. In practical terms, what this means is that a tribunal should ask itself whether a reasonable person, in the position of that party, would have conducted themselves in the manner that they did, or whether there is some other reasonable explanation for that conduct. Thus, this is an objective test. Having reached that objective decision, the second stage is for the tribunal to then consider how it should exercise its discretionary jurisdiction, which requires it to have regard to ‘all the circumstances’ (and this will be when a more subjective approach is taken).

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