Landlord and Tenant Digest Volume 20 (6)

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Commercial Update

Break notices

Vanquish Properties (UK) Ltd Partnership v Brook Street (UK) Ltd [2016] EWHC 1508 (Ch);

An overriding lease was granted to Vanquish Properties (UK) Limited Partnership acting by its general partner Vanquish Properties GP Limited. In law the lessee under the lease was Vanquish Properties GP Limited because it was not clear without consulting extraneous material who were the partners in Vanquish Properties (UK) Limited Partnership. Vanquish Properties (UK) Limited Partnership served a break notice on the under lessee. The break notice was invalid as Vanquish Properties (UK) Limited Partnership was not the lessee.

Residential Update

Service Charges

Cardiff Community Housing Association v Kahar [2016] UKUT 279 (LC)

A weekly tenancy agreement recorded expressly that the weekly payments for the premises included a service charge of £14.60, variable on four weeks notice and provided for the tenant to pay the same weekly in advance. The tenancy omitted to include details of the services for which the charge was payable. Where those services should have been set out there were blank lines. The Upper Tribunal held, overturning the decision of the LVT, that the tenant was liable to pay the service charge.

Cannon v 38 Lambs Conduit LLP [2016] UKUT 371 (LC)

Where a landlord had not complied with s. 47 LTA 1987 (landlord’s name and address to be contained in demands for rent or service charge) so that no service charge was due this did not deprive the FTT of jurisdiction to assess what sum would be due as a service charge once the landlord had complied.

23 Dollis Avenue (1998) Ltd v Vejdani  [2016] UKUT 365 (LC)

The UT held that there is no statutory limit to the amount that can be recovered by way of an on account demand under a lease other than under s 19(2) LTA 1985.In particular it is not necessary that there should be a valid consultation process before a sum in excess of £250 can be recovered by way of a service charge in respect of intended works.

Leaseholders of Foundling Court and O’Donnell Court v Camden LBC [2016] UKUT 366 (LC)

Where a superior landlord intended to carry out works which triggered the consultation requirements of s.20 of the Landlord and Tenant Act 1985, it was for the superior landlord to carry out the consultation process with the residential tenants (being the ultimate payer of the service charge monies).  It was not the responsibility of the intermediate landlord to carry out that exercise.  

Lease interpretation

Fairhold Freeholds No. 2 Ltd v Moody [2016] UKUT 311 (LC)

Where a tenant fails to pay a £50 instalment of ground rent the landlord was not entitled to charge a further £50 for a letter demanding payment of the arrears where the only relevant covenant on the part of the tenant is an obligation “to indemnify the Lessor against all actions proceedings costs claims and demands in respect of any breach non-observance or non-performance” of the tenant’s obligations under the lease.

Sinclair Gardens Investments (Kensington) Ltd v Avon Estates (London) Ltd [2016] ukut 317 (LC)

This was a claim by a landlord to recover the legal costs (solicitor’s costs and counsel’s fees) of proceedings before the FtT under the service charge. 

The lease was in the following terms:

By Clause 3(A) the Lessee covenants with the Lessor that the Lessee will at all times during the term:

Pay to the Lessor such annual sum as may be notified to the Lessee by the Lessor from time to time as representing the due proportion of the reasonably estimated amount required to cover the costs and expenses incurred or to be incurred by the Lessor in carrying out the obligations or functions contained in or referred to in this Clause and Clauses 4 and 6 hereof and in the covenants set out in the Ninth Schedule hereto…

The ‘costs and expenses’ are referred to in clause 3A as “the Management Charges”, the clause making further provision for the calculation and the time for payment of such charges and the establishment of a reserve fund.

By Clause 4 the Lessor covenants with the Lessee that the Lessor will perform and observe and carry out the covenants and obligations set out in the Ninth Schedule and the obligations on its part contained in the lease.

By Clause 6(A) it is agreed and declared as follows:

That the Lessor shall at all times during the term hereby granted manage the Estate and the Block in a proper and reasonable manner and shall be entitled:

(i) to appoint if the Lessor so desires managing agents for the purpose of managing the Estate and Block and to remunerate them properly for their services;

(ii) to employ architects surveyors solicitors accountants contractors builders gardeners and any other person firm or company properly required to be employed in connection with or for the purpose of or in relation to the estate and the Block or any part thereof and pay them all proper fees charges salaries wages costs expenses and outgoings;

(iii) to delegate any of its functions under Clause 6 and sub-clause A(i) and (ii) of this clause and the Ninth Schedule hereof to any firm or company or any other body of persons whose business it is to undertake such obligations upon such terms and conditions and for such remunerations as the Lessor shall think fit.

After reviewing Arnold v Britton [2015] UKSC 36 and Union Pension Trustees Ltd v Slavin [2015] UKUT 103 (LC), and expressing caution in applying previous decisions as authoritative or precedential in respect of the construction of particular lease terms, the Upper Tribunal considered that the proper construction of the lease terms in this case did not enable recovery of the legal costs claimed. 

Breach of covenant

Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC).

Where a long lease contained a covenant not to use the demised premises or permit them to be used for any illegal or immoral purpose or for any purpose whatsoever other than as a private residence, and the leaseholder advertises on the internet the availability of the premises (a flat) for short term lettings and grants a series of such lettings, the covenant was not breached.

Offer and acceptance for tenancy agreement

Publity AG v Chesterhill Properties Ltd [2016] EWHC 1994 (Ch)

A dispute arose over whether there was a binding tenancy agreement.  Due to disagreement over the commencement date, after reviewing the various tenancy documents passing, the Judge considered that there had been no time at which the parties had agreed as to the commencement date nor encapsulated any agreement in the formal documentation both parties required.  The initial offer with a commencement date of 14th January 2016 was rejected by counter-offer when the Claimant amended the tenancy agreement to put in a date of 1st February.  There was no subsequent offer that was capable of acceptance.  Accordingly, sums paid in anticipation of the tenancy agreement being entered into were repayable.

Lease extensions

Greenpine Investment Holding Ltd. v Howard de Walden Estates Ltd [2016] EWHC 1923 (Ch)

In this case two Part 8 claims were heard together.

The first action was a claim by the Greenpine under section 48(3) of the Leasehold Reform, Housing and Urban Development Act 1993 for an order that Howard de Walden Estates grant Greenpine new residential leases.  Greenpine is a BVI registered company.  The question was when terms of acquisition had been agreed.  As well as the usual terms, it had also been agreed that Greenpine provide an opinion on Greenpine’s status. It was held that the agreement to provide an opinion was a term of acquisition and the terms were agreed when the broad terms of the agreement to provide it were agreed, rather than when agreement on the finer detail of the contents were agreed.  The result of that in this case was that the notice seeking a new lease was deemed withdrawn as an application to the County Court had not been made in time. 

The second action was a claim by Greenpine to enforce a professional undertaking. It was alleged to have been given by solicitors in an email in which they sought to complete the grant of the new leases on receipt of funds.  It was held that a promise to complete “on receipt of funds” did not amount to a solicitor’s undertaking.

Assured Tenancy Rent Increases

Chouhan v Earls High School [2016] ukut 405 (LC)

A FtT did not have jurisdiction to determine the market rent of a tenancy under ss.13 and 14 of the Housing Act 1988 because the tenancy agreement contained contractual provisions for rent increases.