Latest Chambers News May
Service Of Break Notices / Surrender
Adam Rosenthal acted for the successful tenants in the recent case of Levett-Dunn v NHS Property Services Limited [2016] EWHC 943 (Ch), in which it was held that a tenant’s break notice was properly served when delivered to premises named in the lease as the address of the landlord, notwithstanding that by the time of service of the break notice, one of the four joint landlords had ceased to be a landlord (the reversion being vested in the three remaining joint landlords) and the remaining landlords were no longer connected with the premises at the stated address.
The case considers the meaning of the “last known” place of abode or business under section 196 of the Law of Property Act 1925 (which was incorporated into the service provision in the lease). The fact that the landlords, collectively, were described as being “of” the stated address, effectively constituted that the landlords’ place of business for the purpose of receiving notices under the lease, unless and until the tenant became aware that it had ceased to be the landlord’s address. An alternative argument was rejected by the Court, based on section 23(2) of the Landlord and Tenant Act 1927 (by which service on a former landlord is good service unless the tenant had been notified that the reversion had become vested in a new landlord). It was held that this subsection, like section 23(1), applies only to notices served under the 1927 Act and is not of general application. The tenant’s alternative argument that the lease was subsequently surrendered by operation of law was also accepted. The surrender occurred when the landlord granted a new short-term lease of the premises to a third party.
The judgment can be accessed here
The Theory of Relativity: Hedonic Regression Considered by the Upper Tribunal
Trustees of Sloane Stanley Estate v Mundy & Lagesse; Aaron v Wellcome Trust Ltd: [2016] UKUT 0223 (LC) On 10 May 2016 the Upper Tribunal delivered judgment in these three test cases which considered the appropriateness of using a statistical model known as the Parthenia Model to calculate relativity under the Leasehold Reform, Housing and Urban Development Act 1993. The cases were presided over by Mr. Justice Morgan because of their importance. The 1993 Act requires the relative value of a lease of a flat to be calculated on the assumption that the flat in question does not benefit from any of the rights conferred by the Act. The Parthenia Model relied on by the tenants was based on a historic data sample of properties sold without Act rights and used a statistical method, known as hedonic regression, to try to isolate the effect of lease length on value. The Upper Tribunal rejected use of the Parthenia Model on the basis that it produced an impossible result in relation to one of the flats under consideration. It was held that, since the Model did not work in relation to one flat, it was broken and should not be used to calculate relativity. Stephen Jourdan QC and Julia Petrenko represented the Wellcome Trust. Anthony Radevsky represented the Sloane Stanley Estate, and Cecily Crampin acted for the tenants.
The judgment can be found here
Enfranchisement Costs: Section 60 Reviewed
Oliver Radley-Gardner appeared for the appellant in Sinclair Gardens Investments (Kensington) Ltd v Wisbey [2016] UKUT 0203 (LC) (full judgment here). The case concerned the scope of costs recoverable under section 60 of the 1993 Act, and in particular what aspects of a solicitor’s work are chargeable to the tenant as part of the enfranchisement process (counter notice costs, costs associated with valuation), and whether and when it is appropriate to effect a discount where work is being undertaken over properties within a single estate.
1954 Act: Valuation Date and Turnover Rents
Kester Lees acted for the successful landlord in NCP v Hawksworth; a 1954 Act renewal of two car parks in Peterborough in which the court had to consider (i) the date for the assessment of rent under s.34 of the 1954 Act where the term commencement date agreed between the parties was December 2014, (ii) whether to include a turnover rent (as per the original agreements) and (iii) whether a conditional agreement for lease of the same car parks executed by a third party was the best available market evidence or whether a hypothetical profit valuation analysis was to be preferred.
HHJ Yelton held that (i) Irrespective of the date agreed for the commencement of the term, the tenancy would commence under the 1954 Act and the date for assessment of the rent was the date of trial (assuming the market would not change as of the date of the grant of the tenancy), applying Lovely & Orchard Services Ltd v Daejan Investments (Grove Hall) Ltd [1978] 1 EGLR 44; (ii) a turnover rent was appropriate both as it was contained in the original agreement and as the market evidence was that a willing landlord and tenant would agree such a rent for car parks, and (iii) the best market evidence was the Agreement for Lease as a third party had been willing to enter into a binding contract.
On the issue of costs, HHJ Yelton accepted the landlord's arguments that it had been successful and ordered the tenant to pay 80% of its costs. Whilst the rent ordered was not exactly as contended for by the landlord nonetheless the landlord's approach and evidence had been accepted and consequently it had been substantively successful.
The judgment can be found here
Update on the draft new Electronic Communications Code
The Department of Culture, Media and Sport has published its proposals for a new Electronic Communications Code. Based on the code in the Bill before Parliament in January 2015, but which was later withdrawn, the proposals contain two important policy changes. First, the consideration for the grant of rights under the Code will be based on a no scheme principle, rather than founded on the consensual agreement approach under the present code. Second, the new code, including the revocation provisions, will apply to all new agreements from the relevant commencement date, and Part II of the 1954 Act will be dis-applied. The relevant body for determining the grant of rights and the consideration and compensation entitlements, will be the Upper Tribunal (Lands Chamber).
These significant policy changes will affect all operators and site owners, whether buildings in urban or agricultural land in rural areas.
Barry Denyer-Green, of these chambers, is actively monitoring the proposed legislation with the Compulsory Purchase Association and the Central Association of Agricultural Valuers. The important thing is to ensure that the legislation is clear and workable.
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