Newcastle | Leeds | Manchester Income Recovery Leasehold Management John Murray, Ward Hadaway February 2016

Newcastle | Leeds | Manchester Maximising Income Sources of Leasehold Income 1.Ground Rent 2.Rent (Shared Ownership) 3.Breach of lease (lessee’s repairs, damage, atleration etc) 4.Legal Costs 5.Service Charges 6.Administration Charges: a.Grant of approvals b.Provision of information c.Late or failed payment d.Breach of covenant

Newcastle | Leeds | Manchester Checklist for Recovery 1.Ability to charge a. Lease wording: does it permit? b. Proof of liability i.Copy rent/service charge accounts ii.Surveyor/photographic evidence of breach c. Interest: in accordance with the lease or S69cca 1984

Newcastle | Leeds | Manchester Checklist for Recovery 2.Notices a.Service Charges: Summary of Rights and Obligations: i.S21b LTA 85 ii.Tenant can withhold rent until this prescribed notice served iii.Must include an address for service of notices (s47 LTA 85)

Newcastle | Leeds | Manchester Checklist for Recovery b. Administration Charges: Summary of Rights and Obligations i.s158 and Schedule 11(4)(1) CLRA02 ii.Tenant can withhold charge until this prescribed notice served

Newcastle | Leeds | Manchester Checklist for Recovery c.Rent i.S166(1) CLRA 2002 ii.For rent, including ground rent or service charges reserved as rent iii.Prescribe payment date between 30 and 60 days from date of service of notice

Newcastle | Leeds | Manchester Checklist for Recovery 3.Service of Notices: in accordance with lease Akorita v36 Gensing Road Ltd LRX Lands Tribunal

Newcastle | Leeds | Manchester Checklist for Recovery 4.Time Limits a.Serve within eighteen months of costs being incurred b.Unless Lessee notified in writing that costs had been incurred c.S20b(1) LTA 85 Gilje v Charlegrove Securities [2003]EWCH 1284: Jean-Paul v LB Southwark (2011):

Newcastle | Leeds | Manchester Enforcement 1.Money Claim 1.1Money Claims On Line (“MCOL”) including claim for interest a.Judgment in Default b.Defended proceedings/referred to FtT (PC) 1.2Enforcement a.Forfeiture (see below) b.Request for payment to Bank/Building Society if property mortgaged

Newcastle | Leeds | Manchester Enforcement 2.FtT application An application to the First tier Tribunal (Property Chamber) may be made under s27A(1) LTA 85 for a determination of service charge payable as a precursor to Forfeiture.

Newcastle | Leeds | Manchester Enforcement »Distress Abolished: s71 Tribunals Courts and Enforcement Act 2007

Newcastle | Leeds | Manchester Enforcement 4.s146 LPA 25 Notice Specify breach Require tenant to remedy the breach if capable of remedy Require the tenant to compensate the landlord for the breach s81 Housing Act 1996: no forfeiture unless: Tenant admits service charges payable Final determination s167(1) CLRA 2002: no forfeiture unless exceeds: £350; or Proportion more than 3 years old

Newcastle | Leeds | Manchester Enforcement 5.Forfeiture a. Premature bringing to an end of a lease by a landlord b. Right of is contained in the lease and service charges are reserved as rent by issue of possession proceedings c.Leaseholder may apply to the Court for relief from forfeiture: s138 County Courts Act 1984

Newcastle | Leeds | Manchester Enforcement 6.Shared Ownership Leases Application for possession Housing Act 1988 (assured) Housing Act 1985 (secure) Midland Heart v Richardson

Newcastle | Leeds | Manchester Contested Service Charges »Concurrent jurisdiction: County Court and First – tier Tribunal »County Court can transfer to FtT depending on complexity, benefits of FtT expertise, cost savings and whether any issues must remain in court. »Lennon v Ground Rents (Regisport) Limited [2011] UKUK »County Court claim for service charges + administration charges »DJ Transferred to Tribunal for service charges only. »FtT could not determine administration charges, interest or County Court costs. »But FtT should be "practical" : Cain v LB Islington [205] UKUT 117

Newcastle | Leeds | Manchester FtT Hearing »Follow Directions to hearing »Prepare Bundle of papers in compliance with directions »Consider carefully what needs to be proved »Alternative estimates »Surveyor's reports »Accounts »Invoices »Tribunal: Lawyer Judge, Surveyor Expert, Lay Member. »Expert Tribunal: Inquisitorial in style »Site visit prior to hearing »Judgement in writing with reasons for decision

Newcastle | Leeds | Manchester Possible Challenges »s19 Reasonableness: usually referred to FtT »s20C Consultation: £250/£100 limit unless compliance/dispensation »No Summary of Rights and Obligations »Late delivery of Demand (s20B) »Non service of Notice