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Manager under 1987 Act
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Manager under 1987 Act

Introduction

Part II of the Landlord and Tenant Act 1987 (as amended by the Commonhold and Leasehold Reform Act 2002) gives the Leasehold Valuation Tribunal power to appoint a manager where there has been failed management of the block. The LVT may appoint a manager to carry out functions in connection with the management of the premises as it thinks fit, including include repair, maintenance and improvement. A tenant in a multi-tenanted block of flats can apply to the LVT for the appointment of a manager "in relation to" premises to which Part II applies.


Extent of land that can be covered by the order appointing the manager

Cawsand Fort Management Company Ltd v Stafford
[2007] EWCA Civ 1187

Facts

In this case an application was made to the LVT by a number of long leaseholders for the appointment of a manager. The application was not, in principle, opposed by the freehold owner. The dispute centred on the extent of the property over which a manager may be granted powers by the LVT. The freehold owner objected to the order being made in respect of land over which it has granted recreational rights to residents and other land over which the lessees enjoyed appurtenant incorporeal rights.

The decision

The freehold owner's arguments were rejected. It was held that the LVT does have power to make an order which extends to premises which are not comprised in the buildings containing the leasehold flats and their curtilages. Mummery LJ:
    "The practical purpose of Part II is to protect the interests of lessees of premises, which form part of a building, by enabling them to secure, through the flexible discretionary machinery of the appointment of a manager, the carrying out of the management functions which they are entitled to enjoy 'in relation to' the premises of which their flats are part. There is nothing in the language of Part II or in its aim to justify limiting a manager's functions to those which must be carried out on 'the premises to which the Act applies' in section 24(1) in the way suggested by the Company by reference to Parts I and III of the 1987 Act."

Interim Management Orders

Jurisdiction to extend interim order

Eaglesham Properties Ltd v Jeffrey
[2012] UKUT 157 (LC)

Once an interim management order has lapsed and the functions of the management of the block have reverted to the freehold owner, through their appointed manager, there is no jurisdiction to extend the original order.


Qualifying tenants

Death of one tenant

Assethold Ltd v 7 Sunny Gardens Road TRM Co. Ltd
[2013] UKUT 509

Summary

A “Right to Manage” company was not entitled to acquire the right to manage where the tenant of one of the three flats in the building, whose name had appeared in the respondent’s register of directors and members, had died before the formation of the RTM company because on her death she ceased to be a tenant.

Facts

Three flats were held by long lessees. The three tenants decided to take steps to acquire the right to manage the Property under Part 2 of the Commonhold and Leasehold Reform Act 2002. The formation of the RTM company was resolved upon and each of the three tenants agreed to become a director and shareholder and to make a contribution towards the costs of incorporation and of the application to the LVT. However, some months later, before any formal steps to bring the project to fruition had been completed, one of the tenants (T) died.

The company advising the leaseholders was not aware of T’s death when it took the steps necessary to incorporate the RTM company. All of the relevant documents were signed by T before her death. T was listed with her fellow leaseholders in its register of directors, the same three individuals were recorded in its register of members as its sole shareholders. The company’s articles of association were in the form of the model articles prescribe by the RTM Companies Model Articles (England) Regulations 2009 (“the 2009 Regulations”).

The RTM company applied to the LVT for a determination under s84(3) of the 2002 Act that it was entitled to acquire the right to manage. It was not until receipt of the landlord’s statement of case in the proceedings before the LVT that the respondent and those promoting the application were made aware of the death of the tenant.

First instance

The LVT decided that the respondent was entitled to acquire the right to manage notwithstanding the fact that the long leaseholder of one of the three flats in the building, had died before the formation of the respondent. The LVT decided the case on the basis that for as long as the deceased leaseholder remained registered as the proprietor of the lease of one of the flats she remained a qualifying tenant, and that for as long as her name appeared on the company’s register of members it was unnecessary to serve a notice inviting participation or a claim notice on her personal representatives. The case was appealed to the Upper Tribunal.

Decision on appeal

The Upper Tribunal allowed the appeal. The LVT had based its conclusion that the deceased remained the qualifying tenant of her flat after her death on the fact that she continued to be shown as the registered proprietor by the Land Registry. By s27(5)(a) of the Land Registration Act 2002, however, a transfer by operation of law on the death of an individual proprietor is excepted from the general rule that registrable dispositions do not operate at law until registration is complete.

The effect of sections 1(1) and 9(1) of the Administration of the Estates Act 1925 was that on T’s death, the leasehold interest in her flat passed by operation of law either to the executors of her will, if she left one, or to the Public Trustee if she did not. That disposition took effect by operation of law without the need for any transfer and, critically, without the need for registration.

The failure to invite the personal representatives of the deceased tenant would not automatically invalidate the RTM process but the Respondent had failed to file any evidence to show that no prejudice was caused and therefore the application was dismissed.


Set-off: manager under 1987 Act

Maunder Taylor v Blaquiere
[2002] EWCA Civ 1633

The tenants were not allowed to set off, against a managers claim for service charges, a claim for damages for breaches of the landlords repairing covenants. The manager is not appointed as a manager of the landlord. He is appointed by the LVT. There is therefore no mutuality between the claim and that of the defendant. Set-off is not therefore possible.
    "[T]he purpose of Part II of the 1987 Act is to provide a scheme for the appointment of a manager who will carry out the functions required by the court. That manager carries out those functions in his own right as a court-appointed official. He is not appointed as the manager of the landlord, or even of the landlord's obligations under the lease... [T]he manager acts in a capacity independent of the landlord... In my view, Mr. Maunder Taylor's right to the money claimed arose from his appointment [as manager], not from the lease. It follows that there was no mutuality between his claim and that of Mr. Blaquiere [the tenant]. That being so, set-off is not possible." (Aldous LJ, paras 41 and 42).

    "It is clear to my mind that parliament intended that a manager should, when appointed pursuant to section 24(1) of the 1987 Act, come in with a clean sheet and be able to collect service charges due from the tenants and use the money so obtained for repair of the premises. It would make a nonsense of the legislation if any or all of the tenants could set off, against that claim for service charges, claims that they might have against the landlord. Most tenants would have such claims. Some of those claims will have accrued before the appointment of their manager; other claims may be for continuing breaches, and thus continue to accrue after the manager's appointment." (Longmore LJ, para 50).

Variation - 1987 Act manager

Orchard Court Residents Association v St. Anthonys Homes Ltd
[2003] EWHC 1049 (Admin); [2003] 33 EG 64

When considering whether or not to vary an order for the appointment of a manager under section 24 of the Landlord and Tenant Act 1987 (in this case by extending the term of the order) the Leasehold Valuation Tribunal does not have to reconsider the various factors in s24(2) which lead to the appointment in the first place.

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