This week we look at RTM companies and forfeiture of residential leases, rent increases and a recent Japanese knotweed case. All this together with our usual dose of positive news and insights from around the firm.
Can a Right to Manage Company forfeit a residential lease?
In Eastpoint Block A RTM Company Ltd v Otubaga [2022] UKUT 319 (LC) the Upper Tribunal upheld a First Tier Tribunal ruling that only a landlord was capable of forfeiting a lease.
Eastpoint had acquired the Right to Manage Pointer Close, a block of flats in Thamesmead in south-east London, under Chapter 1 of Part 2, Commonhold and Leasehold Reform Act 2002 (the Act). It made an application to the First-tier Tribunal (Property Chamber) under section 168(4) of the Act for a determination that there had been a breach of lease, a precursor to forfeiture proceedings in respect of a long leases. It was claimed that, in breach of the lease, the tenant had permitted his subtenant to run a business from the property and cause nuisance to other leaseholders.
The FTT struck out the application on the grounds that it had no jurisdiction to consider it. Section 168(4) provides that a "landlord" under a long lease of a dwelling may make an application to the tribunal for a determination that a breach has occurred. Despite Eastpoint's assertion that it was a landlord for the purposes of the Act, the FTT disagreed, applying a narrow definition of "landlord".
On appeal, the Upper Tribunal upheld the decision of the FTT that Eastpoint could not make use of section 168(4) as it was not the landlord here and was therefore not entitled to bring the case to the FTT.
This decision reminds us that while an RTM company has power to deal with the day to day management of the building, it does not have the right to forfeit the lease which remains with the landlord. Landlords and management agents working with Right to Manage Companies should therefore ensure that any necessary steps are taken by the landlord if forfeiture is to be pursued.
Rent increases for assured and assured shorthold tenancies
A landlord can raise the rent on a periodic assured or assured shorthold tenancy by giving notice as prescribed under section 13 of the Housing Act 1988. The rent increase proposed by a Section 13 notice must be a reasonable increase in line with the market rate and take effect at the beginning of a new period of the tenancy specified in the notice.
In the case of Mooney v Whiteland [2023], the appellant landlord served notice raising the rent under the weekly tenancy from £25 to £100. The rent fell due every Monday but the tenant paid the rent in advance on every Friday. The notice proposed that the new rent was to take effect on a Friday.
The tenant did not accept that the notice was valid (because it ought to have proposed the increase to take effect on a Monday) and continued to pay £25 per week. The landlord considered the tenant to be in arrears and issued proceedings for possession which the tenant defended on the basis that the notice was invalid. The landlord contended that a reasonable recipient would have understood the notice to mean that the new rent was to commence on a Monday.
At first instance, the FTT agreed with the landlord but at both the first and second appeal hearings, the notice was held to be invalid. The Court of Appeal held that the error was not so obvious that the tenant would have realised what the landlord had intended to say. This case highlights how important it is to ensure that rent increase notices are correct so that tenants are able to understand whether the notice complies, when the new rent is payable from and the deadline by which any challenge must be made.
Japanese knotweed and diminution in value
In Davies v Bridgend Borough Council [2023] Mr Davis brought a claim in nuisance against the Council as Japanese Knotweed which had been present on the Council's land for a considerable time (some 50 years) was encroaching on Mr Davies' adjoining property which he had bought more recently as an investment in 2004.
The Court of Appeal held (clarifying a previous knotweed decision) that there would be no actionable nuisance caused by knotweed on a defendant's land simply because it diminished the value of the claimant's adjoining land. However, if the value of the claimant's property was diminished as a result of an interference with the claimant's quiet enjoyment or amenity of his property, due to physical encroachment of knotweed from the defendant's land into the claimant's land as in the present case then damages, including diminution in value of the property, would be available.
The Court also considered the issue of causation. In this case, the knotweed was held to have encroached onto Mr Davies' land by at least 2004 but the Council was not considered to have been in breach of its duty of care as a neighbour to treat the knotweed until a reasonable amount of time had passed since publication of a RICS report flagging the difficulties knotweed can cause in 2012. The Council tried to argue that as the damage from the knotweed occurred before any duty of care arose the claim was flawed on causation. This was, however, rejected by the Court on the basis that it was a continuing nuisance and breach of duty as a result of a persistent encroachment and that unless and until the Council treated the knotweed on its land, any attempt by Mr Davies to eradicate knotweed on his own land would have been rendered futile in any event.
The Court awarded damages of £4,900 based on a residual diminution in value and noted that the proportionality of the proceedings having got as far as they did compared to that figure might be questionable, but that the principle in dispute was nevertheless an important one.
The case highlights the ongoing problem of Japanese Knotweed and the need for landowners to be vigilant and act quickly in relation to any treatment works required to prevent encroachment onto neighbouring land.
Insights from around the firm
- Contractual termination – a 'common law' v 'contract' battle
- Webinar - Trowers Tuesday: How do you improve recruitment and retention
- Digital infrastructure agreements – getting the balance right
Positive news
Women made: Africa’s electric motorbike revolution
A Swedish firm is kickstarting an electric vehicle revolution in east Africa with battery-powered motorbikes built by women. ‘Boda boda’ motorcycle taxis are a ubiquitous sight on the roads of Kenya. They are the cheapest way to get from A to B, with some 6 per cent of east Africans relying on them for their daily income. But, as one of the highest CO2-emitting vehicles on the market, they are also major polluters. The new battery-powered motorbikes seek to address this.
5-Year-old Who Emptied Piggybank for Earthquake Relief Now Wins $48Mil Lottery Jackpot at 18
A delightful story from northern Ontario saw a 5-year-old girl’s good Karma wait 13 years to reward her. Juliette Lamour won the state’s second-largest lottery jackpot in history, CAD$48 million, on her first-ever try. Local news from her home city of Sault Saint Marie revealed a touching side of the story—that at 5 years old Lamour made a very big act of charity, and the suggestion that her generosity has been rewarded is impossible to resist making.
Assembly Work Begins on Notre Dame’s New Spire—On Track for a December 2024 Reopening
Preparatory work began this week to restore the sharp spire atop the Cathedral of Notre Dame in Paris, on track for a late-2024 reopening. Scaffolding has been set up, and custom-cut stones for the spire’s base were recently delivered by barge along the River Seine as they would have been during the last spire’s construction in the 19th century.
It has been almost 4 years since the iconic building was devastated by a fire, and the reconstruction has been going according to schedule. Early hopes were that it would be ready to welcome visitors for the Summer Olympics in Paris next year, but a December completion seems more likely.
