It is hard to believe that time has passed so quickly, but this is the third anniversary edition of our Property Litigation Weekly Bulletin. So this is, quite literally, documentary proof that pandemics drive lasting change!
This week we look at tenants' rights to manage, a warning for landlords renting to private tenants and a case concerning recovery of legal fees from a tenant's guarantor together with what has become a regular dose of positive news, quiz questions and insights from around the firm.
Right to Manage – new qualifying tenants are key
The recent Upper Tribunal case of Baron Estate Management Ltd v Wick Hall (Hove) RTM Co Ltd [2023] UKUT 62 (LC) considered the validity of a claim by the leaseholders to acquire the management of a block of flats.
Right to Manage claims under the Commonhold and Leasehold Reform Act 2002 have often been before the Tribunal and Courts, usually on technical points of validity of notices and procedure.
Before a Right to Manage claim can be made, all the qualifying tenants in a block of flats must first be invited to participate in the claim. This is a key part of the procedure, in order to gain as many participants in the claim as possible and have a fully represented Right to Manage company to make the claim.
In the above-mentioned case, invitation notices were served but two tenants were missed, rendering the process defective. One tenant did not receive a notice due to it being addressed to a previous owner, the second tenant did not receive a notice as at the time of serving the invitations their lease had not been registered at Land Registry. At the point the claim notice was served, being at least 14 days after the invitations, the additional tenant had become registered. Prior to serving the claim notice, a new invitation notice should have been served, but had not been.
The Tribunal considered that lack of service of an invitation to participate on all qualifying tenants meant that a claim notice could not be served, the point having been settled in a previous Tribunal decision.
It is therefore key to a valid claim notice that the up-to-date title is reviewed prior to service, ensuring that all tenants with the right to be part of a claim have been given the opportunity.
If you would like more information or have any questions on the right to manage or enfranchisement, please contact William Bethune.
Attention Landlords - "How to Rent" Guide to be updated
The rental market in the UK has seen a lot of changes in recent years, with various new laws protecting tenant's rights and providing greater clarity for landlords. The Deregulation Act 2015 (the Act) is one such example.
The Act was introduced to provide greater protection for tenants in the private rented sector. One of the key provisions of the Act is the requirement for landlords to provide to their tenants the current version of the "How to rent" guide (the Guide).
The Guide was first introduced in 2016 as a response to concerns about the quality of information available to tenants in the private rented sector. It is aimed at new and existing tenants, providing them with guidance on their rights and responsibilities, and what to expect when renting a property.
This, along with a copy of the EPC, prescribed information about deposit protection and a gas safety certificate, are required to be provided to the tenant prior to occupation of a rented property. Failure to provide this information in accordance with the Act may result in being unable to obtain possession pursuant to Section 21 of the Housing Act 1988.
The Guide was last updated in 2021. An updated version should shortly be available online here.
Kaushal Corporation v O'Connor – recovery of fees
The High Court has considered whether a lease clause requiring a tenant to pay fees and costs, including legal charges, in respect of any application "for any approval or consent required by the lease", would extend to the cost of proceedings flowing from such an application.
The tenant's liquidators previously brought proceedings against the landlord for unreasonably refusing consent to the tenant's requests to assign the lease. The claim was unsuccessful and the tenant was ordered to pay the landlord's costs, subject to detailed assessment if not agreed. Those costs were never agreed and no detailed assessment took place.
The landlord later forfeited the lease and sought to recover charges from the tenant's guarantor including the legal costs of the unreasonable refusal of consent proceedings. The court considered whether those legal costs were recoverable under the lease and therefore under the guarantee.
The court held that the words of the clause clearly covered legal fees but the question was for what specific activity could the landlord incur legal fees which it could then recoup from the tenant.
It was held that the activity was clearly defined as any application for approval or consent under the lease. There was no reference in the clause to proceedings arising. Therefore, on a plain reading, the legal costs of the proceedings were not covered.
There was also no commercial or common sense need for the court to interpret the clause to cover the legal costs of proceedings because the court would make determinations on costs at the end of any such proceedings.
Therefore, the lease clause did not require the tenant to pay the legal costs of the previous claim and the guarantor was accordingly not liable for these.
Additionally, the court held that, even if the clause did allow for recovery of the legal fees, it included a precondition to tenant liability that a demand for the fees be made. There was no evidence that any demand for payment of costs was ever made. The costs of the proceedings were in a sum to be assessed and there had been no assessment so it was not clear what sum the landlord would even demand. The court order for costs was not itself sufficient to constitute a demand.
Whilst the interpretation of wording in one lease is not binding on a court interpreting wording in a different lease, the case is a useful reminder that if there is not clear wording in a lease explicitly naming a type of cost or activity, the landlord's costs may not be recoverable.
Insights from around the firm:
- Converting agricultural land into allotments: what are the rules?
- Airport land: the untapped potential of logistics
- Personal Data and the Security Services – the risks of non-compliance
Positive news:
Buzzzz! World's first TV gameshow for deaf people
Sign2Win is one of the latest shows to be launched by the British Sign Language Broadcasting Trust (BSLBT), which commissions TV programmes made in British Sign Language. Its slate includes drama, comedy, chat shows and documentaries, with deaf programme makers involved behind the scenes, and deaf actors.
Sign2Win, which has a £1,000 cash prize, includes spelling rounds, where contestants have to guess words fingerspelled in video clips played at different speeds, and picture-led questions featuring famous deaf people and landmark deaf community events.
Europe got its first wild river national park
They call it Europe’s ‘last wild river’, and this week the Albanian government promised to keep it that way, as it made the Vjosa and its main tributaries a national park. It’s the first waterway on the continent to enjoy such a status.
Flowing unimpeded for 170 miles across Albania to the Adriatic Sea, the Vjosa supports many endangered species, including the European eel, Egyptian vulture and Balkan lynx. Plans had been submitted to dam the river, which would have wreaked havoc on wildlife. National park status protects it from such developments, marking a victory for campaigners who fought hard to safeguard the river.
