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TYPES OF LEASEHOLD DISPUTE APPLICATIONS

Applications about service charges

What are service charges?

Service charges are sums of money payable by a tenant to a landlord for the costs of services, repairs, some improvements, maintenance or insurance or the landlord's costs of management under the terms of his/her lease.
 

Can the Leasehold Valuation Tribunal make decisions about all aspects of a service charge?

The Leasehold Valuation Tribunal can decide about all aspects of the liability to pay a service charge. It can decide by whom, to whom, how much and when a service charge is payable. A service charge is only payable insofar as it is reasonable. Therefore in deciding liability a tribunal also decides whether service charge costs are reasonable and whether the standard of any works for which the costs are charged is reasonable. Applications can be made either before or after service charge costs have been incurred. Applications are made under section 27A of the Landlord and Tenant Act 1985.
 

What is the Leasehold Valuation Tribunal's power to dispense with service charge consultation requirements?

The law requires landlords to consult with tenants about expenditure for service charge costs in respect of works or in respect of the costs of long term agreements for services the cost of which exceeds prescribed limits. The consultation requirements are very detailed and are contained in section 20 of the Landlord and Tenant Act 1985 and associated regulations. An application may be made to the Leasehold Valuation Tribunal to dispense with all or any of these requirements. An application to dispense with or to modify consultation may either be made before works are carried out. Alternatively an application can be made after or during works where a dispute about consultation has arisen. In either case the Leasehold Valuation Tribunal can only make a determination to dispense if it is satisfied that it is reasonable to do so. Applications for dispensation are made under section 20ZA of the Landlord and Tenant Act 1985.
 

Leasehold Dispute Applications about administration charges

What are administration charges?

 Administration charges are payments by a tenant of residential property for:
 
(a) the grant of approvals or applications for approvals;
(b) in connection with the provision of information or documents;
(c) in respect of a failure to make a payment by the due date;
(d) in connection with a breach of a covenant or condition in the lease.
 
Administration charges can be variable or fixed. A variable charge is one that is neither specified in the lease (eg £50) nor is calculated in accordance with a formula specified in the lease.
 

 

Can the Leasehold Valuation Tribunal make decisions about all aspects of administration charges?

The Leasehold Valuation Tribunal can decide about all aspects of the liability to pay an administration charge. It can decide by whom, to whom, how much and when an administration charge is payable. A variable administration charge is only payable insofar as it is reasonable. Therefore in deciding liability to pay a variable administration charge, a tribunal also decides whether the costs are reasonable. Where the Leasehold Valuation Tribunal is dealing with a fixed administration charge, it has the power to vary the lease on the ground that the charge specified or the formula by which the charge is calculated, is unreasonable. Applications are made under Schedule 11 of the Commonhold and Leasehold Reform Act 2002.

Applications about estate charges

What are charges under estate management schemes (estate charges)?

These are charges made under schemes which were created under section 19 of the Leasehold Reform Act 1967 or Chapter 4 of Part I and section 94(6) of the Leasehold Reform Housing and Urban Development Act 1993. Estate charges can be variable or fixed, A variable charge is one that is neither specified in the lease nor is calculated in accordance with a formula specified in the lease.
 

Can the Leasehold Valuation Tribunal make decisions about all aspects of estate charges?

The Leasehold Valuation Tribunal can decide about all aspects of the liability to pay estate charges. It can decide by whom, to whom, how much and when an estate charge is payable. A variable estate charge is only payable insofar as it is reasonable. Therefore in deciding liability to pay a variable estate charge, a tribunal also decides whether the costs are reasonable. Where the Leasehold Valuation Tribunal is dealing with a fixed estate charge, it has the power to vary the lease on the ground that the charge specified or the formula by which the charge is calculated, is unreasonable. Applications are made under section 159 of the Commonhold and Leasehold Reform Act 2002.
 
 

Applications to Vary a Lease or Leases

What types of leases can the Leasehold Valuation Tribunal vary?

The Leasehold Valuation Tribunal has power to vary long leases of flats. A long lease is one which has been granted for a term exceeding 21 years. This is separate from the power to vary leases in relation to Administration and Estate charges which is dealt with above.
 

Can the Leasehold Valuation Tribunal vary all and any type of provision in a lease?

No. The grounds for seeking a variation of a lease are set out in Part IV of the Landlord and Tenant Act 1987. If you are in doubt about whether the Leasehold Valuation Tribunal can vary a lease you should take independent advice.

Who can apply for the variation of a lease?

Any party to a long lease of a flat may apply for the variation of a lease. Also, applications for variation may be made in respect of two or more flats where there is a consensus for that variation from the majority of parties to the leases. Furthermore, where the variation of one lease would affect other leases, then an application may be made to vary those other leases.

Must I notify any other person of my intention to apply for a variation?

Yes. If you wish to apply for a variation of a lease, you must give notice of the application to any person whom you know or have reason to believe may be affected by the variation. For example, this may include other tenants or any superior landlord or mortgagee. Those persons notified may apply to join in the proceedings as either applicants or respondents. If you are the respondent to an application for variation you also have a duty to notify persons who may be affected and who have not been notified by the applicant. 

Must I provide theLeasehold Valuation Tribunal with a draft of the variation I seek?

Yes. You must provide a draft of the wording of the variation. If the Leasehold Valuation Tribunal decides that it will vary the lease it will either adopt that wording or substitute other wording as it considers appropriate.

Applications about the Right to Manage

What is the Right to Manage?

This is a right for tenants to take over the management of a property from the landlord without the need to show fault on the part of the landlord or any manager. The requirements to exercise the right are set out in Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002. The right is exercised through a Right to Manage company ?
 

Can the Leasehold Valuation Tribunal deal with all disputes under the Right to Manage?

No. The detailed procedures for exercising the right and for running an Right to Manage company are relatively complex and are not dealt with in this guidance. However, the Leasehold Valuation Tribunal can deal with the following applications:
 
(a) Applications by an Right to Manage company for a determination that it was entitled to acquire the right to manage on the relevant date where the landlord disputes the entitlement;
(b) Applications by an Right to Manage company for a determination that it is entitled to acquire the right to manage where the landlord is missing
(c) Applications by either the landlord or the Right to Manage company for a determination of the amount of landlord’s cost incurred in association with the exercise of the right;
d) Applications by either the landlord or the Right to Manage company for a determination of the amount of accrued uncommitted service charges to be paid by landlord/third party/manager to Right to Manage company;
(e) Applications for a determination whether approval is to be given under terms of lease;
(f) Applications by an Right to Manage company for a determination that the right may be exercised early
 

Applications to Appoint a Manager

What power does the Leasehold Valuation Tribunal have to appoint a manager?

The Leasehold Valuation Tribunal has the power to appoint a manager under section 24 of the Landlord and Tenant Act 1987 where it is satisfied that grounds to do so have been proved. Usually it is necessary to prove that there is fault with the management of the property, for example - a failure to carry out obligations under a lease; the charging of unreasonable service charges or a failure to comply with a Management Code of Practice issued by the RICS (Royal Institution of Chartered Surveyors).
 

Who can make an application to appoint a manager?

Applications can be made by a tenant or group of tenants or by a landlord.
 

Must I take any preliminary steps before I make an application?

Yes. An application to appoint a manager cannot be made unless a notice which complies with section 22 of the 1987 Act has been served. Exceptionally, the Leasehold Valuation Tribunal has power to dispense with the service of this notice if it is satisfied that the grounds set out in section 22(3) apply.
 

Applications about insurance

Can the Leasehold Valuation Tribunal deal with disputes about insurance?

Yes. The Leasehold Valuation Tribunal can deal with insurance disputes in two circumstances:
(a) Where a lease requires that a tenant insures a property with an insurer nominated or approved by the landlord, the Leasehold Valuation Tribunal may determine whether the insurance provided is unsatisfactory in any respect and/or whether the premiums payable are excessive;
(b) Where insurance is payable as part of a service charge, then the Leasehold Valuation Tribunal can decide on its recoverability under the lease and its reasonableness.

When can I make an application to the Leasehold Valuation Tribunal

Applications about the liability to pay service charges, administration charges and estate management charges, the right to manage, appointment of a manager and variation of leases can be made from September 30, 2003. Applications about the dispensation of service charge consultation requirements can be made from October 31, 2003. There are some transitional provisions and if you are in any doubt about whether the Leasehold Valuation Tribunal can deal with your application you may wish to take independent legal advice.

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