By Martin Boyd
The contrast between day event for professionals in leasehold and the evening event for ordinary leaseholders could not have been more stark. Paupers and kings might be a good analogy.
While the day event saw the most talented in the leasehold world speak on a range of specialist topics, the evening event saw speakers at a very different level in their careers.
The professionals at the day event, who had paid £300, got:
Siobhan McGrath, President of the Residential Property Tribunal Service, set out the new procedures for the Property Chamber which will take over July 1;
Philip Rainey, QC, head of Tanfield Chambers, discuss the implications of the worrying Supreme court decision in Deajan v Benson and contrast it with the even more concerning Philips v Francis case;
Professor James Driscoll on the development of the law since 1993, and Katherine Holland, QC, on the role of experts in courts and tribunals.
The evening workshop got young professionals who are best not named.
The session entitled “Leasehold valuation Tribunal” at times descended into chaos. The speakers, who were not LEASE staff, set out the most basic of ABC guides to the types of issues that can be taken to the LVT.
They became unclear when asked which sections of which laws leaseholders should use to bring actions to replace the manager (s24 LTA 1987), or dispute the non provision of accounts (whole range of options, but s27 LTA 1985 is the main redress option, with maybe with a s24 case to remove the manager).
At one point the answer to a question were words to the effect “that’s not covered under a specific clause in the law”.
I was horror-struck to hear one speaker suggest that leaseholders should withhold service charges payment if accounts had not been provided!
LKP readers, and a number of the audience, are aware that non- payment of service charges is very dangerous. It opens leaseholders to the risk of huge “administration charges” and even potential forfeiture of their home, as per the Jackson case.
There are only very few circumstances where withholding payment should be recommended, and even then it should only be done under expert legal guidance. Pay first, dispute second should be the rule in 99.99 per cent of cases.
Anthony Essien, a barrister and head of LEASE, had to intervene to sort out this car crash.
The speakers were unclear on the new property chamber rules, which start in July as the replacement for the LVT.
They said that under the new system the costs limit will be removed and it may be more like a normal court where the winning party can be awarded costs. This is wrong.
The new rules do raise the costs limit, but only if the Tribunal rules one party has acted unreasonably.
The clear intention of the new procedures as set out by Siobhan McGrath earlier in the day, is that the new Property Chamber remains predominantly a no-cost environment. Each side will pay its own costs unless one party has acted unreasonably, in which case the Tribunal may award appropriate and even unlimited costs.
It has to be conceded that the young solicitors heading these workshops were also wrong-footed by older leasehold litigants, who wanted to air their grievances.
Next year’s event – and we hope that a leaseholders’ event is held next year – would benefit from firmer chairmanship and higher-powered professionals at its workshops.
As a taxpayer-funded body, LEASE cannot offer the finest legal minds in leasehold to freeholders and managing agents, and those just starting out to leaseholders.
Also, it was not really fair to the young professionals taking part, to whom I wish to give no offence.
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Many thanks for reporting on this so promptly. Really interesting! To be fair to the young professionals, I think there is a good deal of confusion on the issue of withholding service charges until proper accounts are supplied. Leaseholders obtained this right under an obscure schedule tucked away at the end of the 2008 Housing and Regeneration Act. I’ve long been puzzled by the explanations on HM gov’s website. Have the relevant bits of schedule 12 of this Act come into force or not? I asked my MP, Malcolm Rifkind’s office and they said, “yes”, but I’m not so sure….. Don’t LEASE understand that we the leaseholders also urgently need access to their prime time information sessions and speakers until now reserved for those same property professionals who lobby to ensure that even when leaseholder friendly legislation makes it through parliament, it doesn’t get enacted!
Martin,
In your excellent article, you make a very good point concerning the payment of disputed service charges. Certainly if a dispute is about overcharging or poor work non payment can lead to horrendous problems for the leaseholder. Would you agree that it would be acceptable to withhold part of the service charge for a service that had not been carried out?
For example, a service charge demand for £2,500 includes a £120 charge for a repair to swimming pool, that your development does not have. Would a leaseholder be entitled to pay £2,380 with a letter stating they have deducted the £120 swimming pool charge?
What in your opinion would the leaseholders position be if they make it clear they are willing to pay, but the managing agent cannot either demonstrate that they have any contract giving them authority to collect service charges, nor can they demonstrate that payments made are actually being credited to the correct service charge account?
Gill,
Schedule 12 has not been enacted. Neither were S152 &S156 Commonhold & Leasehold Reform Act 2002 that were repealed and re-worded within this Schedule. Section 21 Landlord & Tenant Act 1985 remains as drafted before 2002. Far from it being the case that professionals have lobbied the government not to introduce this legislation, the professional bodies have actually put together good practice guidance to fill the hole left by the lack of legislation and the government’s insistence that these sections are unlikely to be enacted.
Gill,
Geoff is correct. There was no lobby to stop s152/156 going through. Bizarrely, it was LEASE itself which made the strongest submissions opposing implementation of these sections during the last consultation in 2007/8. The net conclusion from that consultation was still to go forward, but no time was ever found under the previous administration.
At the round table meeting in February, the Housing Minister again asked whether there was any reason why he should not implement these sections. Nobody argued against commencement. The only note of caution came from the legal opinion, which correctly pointed out that key sections could not be applied as originally envisaged in the social housing sector.
It is utterly ridiculous that after 25 years we still do not have the re-worded elements for 1985 Act. The sector has been forced to introduce a voluntary code in place of s152 under the ICAEW technical guidelines. Of course, this means any managing agent who chooses not to follow good practice faces little or no penalty.
The 2008 Act could again have produced results, but was not enacted in the relevant sections and takes us back to the idea the Secretary of State designing a new wheel from scratch. If only the civil servants were to ask the sector what’s needed, rather than draw up their own ideas things might move forward.
We have just had the same cock-up again with the Enterprise and Regulatory Reform Bill. An amendment from the Lords gave the potential at last to provide regulation of the sector. Despite the whole sector writing to the Minister supporting regulation, his civil servants produced wording setting out a compulsory Ombudsman redress system. No notice seems to have been taken of the fact that the Ombudsman also wrote to the Minister asking for regulation rather than any other type of system, including the redress he will now be obliged to oversee.
Thank you Martin for a very useful insight into what should be happening re leasehold reforms.
There has been some amazing articles recently, thanks guys.
Jeff is incorrect (sorry Jeff) in so far as the 2008 Act provision has been enacted, as has s 15x of CLRA 2002, however these are not in effect until a commencement order is given, which in these instances , none have.
Readers using the legislation.gov site for example have to check the notes very carefully, and, frankly, they are less than clear!
Full enactment of section 42a LTA 1987 ( which does not impact RSLs) would help people like Michael in the private sector to withold pending confirmation of where funds are held.