Latest Chambers News up to 31st October 2014
- Collective Enfranchisement
Stephen Jourdan QC appeared in the Upper Tribunal (Lands Chamber) for the appellant nominee purchaser in a collective enfranchisement dispute relating to 82 Portland Place, 82 Portland Place (Freehold) Limited v Howard De Walden Estates Limited [2014] UKUT 0133(LC), decided Martin Rodger QC, Deputy President and A J Trott FRICS on 8 September 2014. The decision considered three issues: (1) relativity; (2) the circumstances in which a tenant can become a participating tenant under s.14 of the 1993 Act, and (3) whether the freehold vacant possession value of the building should reflect a “purchaser’s margin” to be deducted from the aggregate value of the individual flats. The decision is available here.
Hogan Lovells and Falcon Chambers Develop Online Resource for Avoiding Disputes Between Landlords and Tenants in Lease Transactions
Hogan Lovells and Falcon Chambers have worked together to develop an online resource to help tenants and landlords navigate their way through the legal minefield of assigning or subletting a lease.
'The Protocol for Applications for Consent to Assign or Sublet' is an online resource which has been developed for those who want to assign or sublet part or all of their premises but require their landlord’s consent to do so, and for those landlords whose consent is being sought.
Leading real estate disputes specialists at Hogan Lovells and Falcon Chambers have worked together to create the first in a series of protocols, applying to commercial property situated in England and Wales. The Protocol is easily accessible at:
The Protocol will help to:
- Improve communication between landlords and tenants and ensure that applications are dealt with within a reasonable timeframe
- Smooth relations and avoid disputes because both parties are provided with all the information they need regarding procedure.
- Save the parties time and expense by allowing them to focus on the substance of an application, rather than wrangling over procedure
- In cases where disputes do arise, parties are guided towards alternative dispute resolution (ADR) through an experienced arbitrator or mediator, with recourse to the courts being an option of last resort.
Other leading practitioners and industry bodies, including the British Property Federation and the Property Litigation Association, have been invited to put forward ideas for further protocols aimed at avoiding or resolving real estate disputes to be included in the online Property Protocols hub.
Nicholas Cheffings, Chair of Hogan Lovells and head of real estate disputes, commented:
"We envisage the Protocol being disseminated by the legal and surveying professions as, in the first place, a ready reckoner for behaviour at the point of application. As the Protocol becomes embedded in practice, we would hope to see it being referred to in leases and other binding documents, as a behavioural code to which arbitrators and courts will have regard in assessing compliance."
Guy Fetherstonhaugh QC of Falcon Chambers said:
“We hope that this will be the first in a series of collaborative ventures by property professionals to facilitate good practice in the property industry, and enable disputes, if not avoided altogether, to be resolved by experts with minimum contention.”
The team who created the site included Nicholas Cheffings and Mathew Ditchburn, partners in Hogan Lovells real estate disputes team, and Guy Fetherstonhaugh QC and Jonathan Karas QC from Falcon Chambers.
- Right to Manage, Mandatory and Directory Requirements
Oliver Radley-Gardner appeared for one of the successful landlord appellants in Elim Court RTM Co Ltd v Avon Freeholds Ltd [2014] U.K.U.T. 0397 (LC), considering the right to manage provisions in Part 2 of the Commonhold Leasehold Reform Act 2002. The appeal concerned notices inviting participation under section 78, and, specifically, whether a failure to comply with the statutory requirements invalidated the right to manage process, or whether such a breach could be overlooked if there had been substantial compliance with those requirements and no material prejudice had been caused. The Deputy President decided that it was not open to the RTM Companies to argue that compliance had been defective but nonetheless substantial. This was because the requirements of section 78 were to be strictly interpreted as they affected the private law rights of landlords, tenants and RTM Companies. Where a statutory provision related to substantive rights or questions of jurisdiction, there was no room for arguing that substantial compliance sufficed. The decision considers the true effect of the principle of statutory interpretation set out in Jeyeanthan, R (on the application of) v Secretary of State for the Home Department respondent [1999] EWCA Civ 3010. It also considers technical issues in relation to the execution of notices under the Companies Act 2006.
-Leasebacks
Stephen Jourdan QC appeared in the Upper Tribunal (Lands Chamber) for the successful landlord in Queensbridge Investment Ltd v 61 Queens Gate Freehold Ltd [2014] UKUT 0437 (LC), decided by Martin Rodger QC, Deputy President, on 6 October 2014. In a collective enfranchisement claim, the landlord claimed leasebacks of three flats. The LVT determined a dispute about the terms of the leasebacks in favour of the tenants. The landlord appealed against that decision. While the appeal was pending, the landlord granted new leases of those flats to connected companies, on the terms it had proposed to the LVT but which had been rejected. It then contended, succsssfully, that this meant that it was under no obligation to proceed with the leasebacks, and that the acquisition of the freehold on behalf of the tenants would be subject to the new leases. The decision is available here
-Tenancy Deposit Schemes and penalties for non-compliance
Joe Ollech appeared for the successful respondent in Okadigbo v Chan & Chan on 24 October 20014 before Males J in an appeal from the County Court relating the exercise of judicial discretion and the multiple to be applied in assessing the payment of a penalty under s.214(4) of the Housing Act 2004. Issues raised by the appellants concerned the factors taken into account by the trial judge at first instances in considering culpability, and the application of Court of Appeal dicta in Ayannuga v Swindells[2012] EWCA Civ 1789, which was decided before changes to s.214(4) were introduced by the Localism Act 2011. The decision to award only a sum equal to the deposit at the lowest end of the spectrum of culpability was upheld.
- RTM companies – attribution of service charge liabilities
Judgment has been handed down in London Borough of Southwark v Theowal Ltd & Aspects RTM Company Ltd, heard by HHJ Taylor sitting at Central London CC in on the 15th and 1t6th of January 2014. Joe Ollech appeared for the intermediate landlord in a trial concerning the right to manage legislation under ss.91 - 97 of the Commonhold and Leasehold Reform Act 2002. In particular the court considered the apportionment of liability for service charges incurred by the headlessor before the RTM company had taken over management from the intermediate landlord, but only invoiced thereafter . The court decided that charges were payable by the intermediate lessee as primary obligor as soon as they had been incurred by the headlessor, even though the headlease expressed them to be payable on demand. The cases of Romain v Scuba TV Ltd [1997] QB 887, TS & S Global v Fithian Franks and ors [2007] EWHC 1401 and OM Limited v New River Head RTM Company (unrep.) were considered. The court also considered the issue of the RTM company having collected in service charge payments before it had taken a transfer of responsibilities from the intermediate landlord.
- Leasehold Enfranchisement
In Howard de Walden Estates Ltd v Accordway Ltd and Kateb [2014] UKUT 0486 (LC), the Upper Tribunal decided a point of statutory construction under the Leasehold Reform, Housing and Urban Development Act 1993 which had previously led to conflicting LVT decisions. It held that the freeholder, the competent landlord, was able to agree all the terms of acquisition with the lessee of the flat, even after a notice of separate representation had been served by the intermediate lessee. The intermediate lessee’s remedy was to claim a breach of statutory duty by the competent landlord, to which the latter has a defence if he acts in good faith and with reasonable care and diligence. The Tribunal also rejected the intermediate landlord’s arguments based on the Human Rights Act. The judgment is available here
Anthony Radevsky acted for the successful appellant.
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