As the end of 2020 beckons, we take a look at what progress the Sterling market has made in its preparations for the end of the London Interbank Offered Rate (LIBOR) on 31 December 2021.
A recent decision of the Upper Tribunal has held that residents are unable to make applications to prohibit landlords from seeking to recover the cost of legal proceedings through the service charge on behalf of other residents, without their consent or authority, in accordance with Section 20C of the Landlord and Tenant Act 1985 (the “Act”).
Leases commonly provide that landlords can recover their legal costs arising out of a dispute with leaseholders through the service charge. If a lease contains such a clause, the leaseholder may make an application to the court or First-tier Tribunal that the landlord cannot rely on the wording of the lease in order to recover some or all of the legal costs of the dispute.
The relevant court or Tribunal to which the application is made may make an order on the application if it is just and equitable to do so in accordance with Section 20C(3) of the Act.
The case – Plantation Wharf Management Limited v Fairman  UKUT 236 (LC)
Plantation Wharf Management Company Limited (“PWMC”) was a management company responsible for providing services to an estate of thirteen blocks of flats. The flats were all let on long-leases. Under the terms of those leases, PWMC was entitled to recover legal and professional costs incurred in the management of the estate from the leaseholders by way of service charge.
PWMC was in dispute with a group of leaseholders on the estate concerning the apportionment of service charge levied to the respective leaseholders in accordance with the terms of their leases, and subsequently made an application to the Tribunal for a determination that the service charge was payable by the leaseholders in accordance with Section 27A of the Act.
The Tribunal held that the service charges in dispute were not due for payment from the leaseholders. One of the leaseholders made applications under Section 20C of the Act that PWMC be prohibited from including the legal costs arising out of the dispute in the service charge. The leaseholder made an application on his own behalf and a further application on behalf of all other leaseholders at the thirteen blocks.
The Tribunal granted both Section 20C orders, finding that it was not “just and equitable” for the cost of the Tribunal proceedings to be claimed by PWMC as part of the service charge.
PWMC appealed to the Upper Tribunal in respect of the second order on the basis that the leaseholder had no authority to act on behalf of all the other leaseholders and had no right to apply for an order on their behalf.
The Upper Tribunal allowed an appeal. The judge considered the meaning of the word “specified” for the purpose of Section 20C of the Act, finding that the word in this context did not simply mean “named”.
The Upper Tribunal found that the Tribunal would only have jurisdiction to make an order under Section 20C in respect of persons other than the applicant, if the person or persons “specified” in the application have consented or authorised the making of the application.
In this case, as the leaseholder did not have the authority to act on behalf of all leaseholders at the thirteen blocks, the Upper Tribunal held that the order made by the Tribunal under Section 20C relating to all leaseholders at the thirteen blocks should be set aside, save as it provided protection to the leaseholder himself.
This decision will be welcomed by landlords facing Section 20C applications from residents who claim to act on behalf of other residents but who have not sought the requisite authorisation or consent to the making of the application from the “other residents”.
It is crucial to note, however, that if a resident making the application does indeed have the express consent or authority from their fellow residents, then the court or Tribunal will have the jurisdiction to make an order under Section 20C in respect of all persons “specified” in the application.
For more information
For advice on service charges and other housing management matters, please contact Penny Bournes.
Finally, there is a glimmer of hope that perhaps the Covid-19 pandemic could be reaching its end.
For part 2 in this series of short podcasts, Chris Lloyd-Smith interviews senior associate Lisa Whitehouse on how she has been coping during these unprecedented times.
Delayed since Spring 2020 as the Government tackled the Covid-19 crisis, Tuesday 17 November saw the publication of the Social Housing White Paper, setting out the future regulation of the sector
In this ebriefing, we examine how the duty holder regime will apply to social housing providers with existing HRRBs in their housing stock.
Following Katherine's "heads up" last week, the Government has now confirmed that for claim periods post 1 December, employers will not be able to claim for employees who are serving their notice
For part 1 in this series of short podcasts, Chris Lloyd-Smith interviews solicitor Puja Desai on how she has been coping during these unprecedented times.
Over 100 trainees and future trainees from Birmingham joined the BTSS for a webinar to address concerns around training remotely and qualifying during a possible recession.
Anthony Collins Solicitors has supported Birmingham-based Complete Care Holdings in its acquisition of Amegreen Complex Homecare Ltd.
The Guidance for the extended Coronavirus Job Retention Scheme (CJRS) was released last night on 10 November 2020. We thought we knew what we were expecting or so we thought...
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.