The April 2019 update is now available.
Topics this month:
- Easements: Statutory lease extension – modification of rights granted in existing lease
- Landlord & Tenant (General): Repairing covenant – specific performance; Forfeiture - s146 notice - triggering the right to forfeit
- Long Leases: Service charges – apportionment – costs – identification – representation; Service charges – Major Works – improvement or repair; Defective Premises Act 1972 – Landlord and Tenant; Collective enfranchisement – extent of entitlement
- Mortgages: Short term lending – interest rates – unfair relationship
- Property Litigation: Residential property possession – discrimination; Contract terms – Estate agents commission – Implied terms – Interpretation – Oral contracts.
- Restrictive Covenants: Discharge or modification under s84 Law of Property Act 1925 – limit on number of dwellings; Discharge or modification under s84 Law of Property Act 1925 – Obsolete Covenant
- Solicitors Practice Points: Solicitors Regulation Authority Code of Conduct; New Protocol Enquiry Form.
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4 April 2019
Statutory lease extension - Modification of rights granted in existing lease
Park v Morgan
 UKUT 20 (LC)
A restriction of a right of way in a lease over a driveway leading to a garage on foot only was not a defect that needed to be remedied on an application for a statutory lease extension. The clause contained no ambiguity, inconsistency or other difficulty of interpretation and there was a rational explanation as to why the right of way was limited in the way that it was.
Landlord and tenant (general)
There are two cases this month:
- Whether a landlord was in breach of a repairing covenant and if so whether an order for specific performance was appropriate.
- Whether a s146 notice could be served where a breach of covenant is alleged, but before a right to re-enter as a result of the breach has arisen.
Repairing covenant - Specific performance
Blue Manchester Limited v North West Ground Rents Limited
 EWHC 142 (TCC)
The tenant successfully obtained an order for specific performance of the landlord’s repairing covenant.
Forfeiture - s146 notice & triggering the right to forfeit
Toms v Ruberry
 EWCA Civ 128
The Court of Appeal upheld the first instance decision that the ability to serve a notice under s146 of the Law of Property Act 1925 only arose, in the case of this lease, after service and expiry of a defined default notice
There are four cases this month:
- Whether in making an order under s20C of the Landlord and Tenant Act 1985, the Tribunal was correct to take into account the issue of the tenant’s representation.
- Whether it is relevant to determine if works are an improvement or a repair where they are in furtherance of a landlord’s obligation to provide a service.
- Whether s4 of the Defective Premises Act 1972 requires a landlord to implement a system of regular inspection is fact specific.
- Whether a basement, sub-soil and airspace were part of the common parts.
Service charges - Apportionment - costs – identification - representation
Rotenberg v Point West GR Limited
 UKUT 68 (LC)
In deciding whether to make an order in the leaseholders’ favour under s20C of the Landlord and Tenant Act 1985, the First-Tier Tribunal had wrongly taken into account the issue of their representation. The landlord, Point West GR Limited (“Point West”) had unreasonably taken issue with the list of clients produced by Wallace LLP (solicitors for the leaseholders) (“Wallace”) given the effect of Rule 14 of The Tribunal Procedure (First-Tier Tribunal) (Property Chamber) Rules 2013 (“the 2013 Rules”).
Service Charges - Major Works - improvement or repair
London Borough of Southwark v Baharier
 UKUT 0073 (LC)
Whether works are an improvement or a repair is irrelevant where they are in furtherance of a landlord’s obligation to provide a service.
Defective Premises Act 1972 - Landlord and Tenant
Rogerson v Bolsover District Council
 EWCA Civ 226
Whether s4 of the Defective Premises Act 1972 requires a landlord to implement a system of regular inspection is fact specific, one aspect is the landlord’s knowledge as to any likely or known risks in the property.
Collective enfranchisement - Extent of entitlement
LM Homes Ltd v Queen Court Freehold Company Ltd
 UKUT 367 (LC)
Leaseholders exercising the right to collective enfranchisement were entitled to acquire the airspace, basement and subsoil of the building not withstanding that the freeholder had granted leases for the purpose of development.
The Tribunal’s jurisdiction was not ousted by agreement between the freeholder and the leaseholders as to the terms of acquisition if contracts were also required for the acquisition of other leasehold interests.
Short term lending – interest rates – unfair relationship
Greenlands Trading Ltd v Pontearso
 EWHC 278 (Ch)
The High Court dismissed an appeal against an order for possession and money judgment, in which the judge had accepted the lender’s evidence about industry standard default rates of interest and rejected a defence of unfair relationship.
There are two cases this month:
- Whether a possession order should be made on a discretionary ground despite the fact that the landlord, exercising a public function, had failed to conduct a proper PSED impact assessment.
- Whether an oral agreement between a vendor and an estate agent would be complete and enforceable even if it did not expressly specify the event that would trigger the vendor's obligation to pay commission to the agent.
Residential property possession - Discrimination
Forward v Aldwyck Housing Group Limited
 EWHC 24 (QB)
On appeal the Court found that the failure of the trial judge to take structured approach to the question of whether the landlord (a Housing Association) had carried out a Public Sector Equality Duty Assessment prior to seeking possession did not mean that the possession order should be set aside. In the instant case, on the evidence before the Court, it was clear that carrying out such an assessment would have made no material difference to the landlord’s decision to evict and the Judge’s decision that that eviction was reasonable and proportionate.
Agency - Contract terms - interpretation
Wells v Devani
 UKSC 4
An oral agreement between a vendor and an estate agent, the substance of which was that the agent would find a buyer for the vendor's property, would be complete and enforceable even if it did not expressly specify the event that would trigger the vendor’s obligation to pay commission to the agent.
There are two cases this month:
- Whether a Restrictive Covenant restricting the number of dwellings on land could be modified;
- Whether a Restrictive Covenant restricting the redevelopment of land except in certain specified circumstances was obsolete
Modification under s84 - Number of dwellings
Hancock v Scott
 UKUT 16 (LC)
The Tribunal permitted the modification of a restrictive covenant which restricted the number of private detached dwellings permitted on the land, based on grounds (a), (aa) and (c) of s84 LPA 1925.
Discharge or modification under s84 - Obsolete Covenant
Adams v Sherwood
 UKUT 411 (LC)
In relation to a covenant restricting the redevelopment of land except in certain specified circumstances, the Tribunal found that changes to the area – including in breach of the covenant – had eroded the protection which the covenant was intended to achieve. It therefore decided that the covenant was obsolete.
A different restriction – limiting the number of houses permitted on a neighbouring parcel of land – was found still to be useful and was therefore not obsolete.
The Tribunal concluded that this covenant did not secure any practical benefit to the objectors since the relevant proposed houses would not share a boundary with the objectors and would not have a view over any of their houses. Modification of the covenant was therefore permitted subject to payment of compensation to the objectors of £7,500 each.
Solicitors' Practice Points
There are two points this month:
Solicitors Regulation Authority Code of Conduct
- Solicitors Regulation Authority Code of Conduct
- New Freehold Enquiry Form
The Solicitors Regulation Authority’s new rulebook will come into force on 25 November 2019. The new rules will be known as SRA Standards and Regulations (S&R). The S&R consists of 130 pages and is significantly shorter than the existing rules.
The S& R include a code of conduct for solicitors and a code for firms that describe the standards of professionalism that the regulator and the public expect of those the SRA regulates.
Use of the SRA Digital badge on forms websites will be compulsory from November 2019.
New Freehold Enquiry Form
A Freehold Management Enquiries (FME1) form has been introduced. The aim of the form is to raise standard questions relating to a freehold property that shares services with other properties. Use of the form is not a mandatory part of the Protocol but the form’s format and questions cannot be altered.
The FME1 will need to be answered by the rent charge owner, the management company, the managing agent or their appointed representative. The enquiries include request for information about the amount of estate rent charges or equivalent.
Form FME1 is available for download free of charge from the Law Society website.
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