First-tier Tribunal (Property Chamber)’s updates its Practice Statement on appointment of a manager
Cecily Crampin considers an update to the First-tier Tribunal (Property Chamber)’s Practice Statement on appointment of a manager on a Landlord and Tenant Act 1987 s24 application. The update was made on 24 July 2023 can be found here.
The update includes amendments to the draft order included within the Practice Statement. A new paragraph 11 permits the Tribunal “upon receipt of information or notification of change of circumstances, issue directions to the parties … concerning the operation of this Order …”
It also changes the apparent direction to the Land Registrar to enter a Form L restriction protecting the appointment on the landlord’s title to a direction to the manager to apply for entry of such a restriction. The form L restriction set out in the Statement requires a certificate of compliance with a landlord direction in the order that the landlord will procure from the assignee a direct covenant with the manager to comply with the management order. The Land Registration Act 2002 gives the court, not a Tribunal not dealing with a registration case, a power to direct the Registrar to update the Register so that the update seems better to reflect the steps required to ensure entry of the restriction. A failure to protect the management order by entry of the restriction can cause considerable issues, such as those in Urwick v Pickard [2019] UKUT 365 (LC) in which the purchaser of the landlord’s interest took free of the management order. It is that decision which led to the development of the form L restriction in the draft order.
The order appointing the manager and setting out his or her powers and responsibilities is key to a successful appointment, and yet, as the Upper Tribunal observed in Urwick, often “the form of a management order is the last thing to attract attention at a contested hearing”. There are many examples of orders which have not been drafted in a way which reflects what the manager may need to do in practice, or lacks clarity so that further litigation ensues. The recent case of Solomon Unsdorfer v Octagon Overseas Limited and Others [2023] UKUT (LC), an instalment in the long-running manager litigation at Canary Riverside in which the issue was the ability of the manager, under the management order, to recover costs of proceedings from commercial tenants in the block, has highlighted the issues that can arise. As Martin Rodger KC, the Deputy Lands Chamber President, said of the 2016 order “The management order … is a poorly drafted document, repetitious, grammatically incoherent and peppered with second thoughts and qualifications … amended from time to time …” Prior to the Practice Statement in 2021, there was no standard order template to follow. The update to the Practice Statement draft order to set out the Tribunal’s power to issue directions on the operation of the order may well be directed at the problems which have arisen in cases like Canary Riverside, emphasising the Tribunal’s oversight.
It will be interesting to see whether the First-tier Tribunal will issue similar practice statements in other jurisdictions where crucial but complicated orders will need to be made, and thought needs to be given by litigants to the result of the litigation, not simply the threshold for obtaining an order, at an early stage in the proceedings. For example, orders for cladding and like remediation works made under s123 of the Building Safety Act 2022 will likely be complicated, with consideration not only of what and how works are to be done, by reference to a detailed specification, but also whether there are to be inspections on behalf of the applicants to ensure the works have been done.
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