There is no requirement that the potential membership of a proposed tenants’ association must be at least 60% for a certificate of recognition to be granted under section 29 of the Landlord and Tenant Act 1985.
Section 29(1) of the 1985 Act, defines a recognised tenants’ association as:
“an association of qualifying tenants (whether with or without other tenants) which is recognized for the purposes of the provisions of the Act relating to service charges either by notice given by the landlord or by a certificate in relation to dwellings in England of the First- tier Tribunal.”
Subsection (5) makes provision for the Secretary of State to make regulations specifying, inter alia the matters to which regard is to be had in giving a certificate and circumstances in which it is not to be given.
To date, no regulations have been made. Guidance, however, issued by the DCLG and the MoJ state to the effect that actual paid up membership of the association should represents a substantial proportion (as a general rule not less than 60%) of the potential membership.
The factual background
The Appellant association members were all tenants at Rosslyn Mansions, 21 Goldhurst Terrace, London, NW6 3HD (“Rosslyn Mansions”). The Respondent was the freehold owner of Rosslyn Mansions.
Rosslyn Mansions comprised 13 residential flats. 4 of the long lessees were members of the association. 4 other leaseholders, including a director of the landlord company, did not wish to join and the remaining 5 were let under a short term tenancies with no liability to pay a variable service charge.
Excluding the director, out of the leasehold owners of the 7 flats, the 4 who were members made up 57.1% of the service charge payers. The same members, however, were responsible for 70% of the quantum of the service charges payable by qualifying tenants.
An application was made to the FTT for a certificate of recognition.
The FTT refused to grant a certificate of recognition primarily on the basis that the Appellant fell short of the requirement in the criteria usually adopted that recognition should only be given to associations who represent at least 60% of the variable service charges. In refusing permission to appeal, the FTT held that:
“…there is nothing in the guidelines issued by the Secretaries of State for a Tribunal to take into account of the different percentages of service charge payable by any tenant. The Tribunal was and remains satisfied that insufficient membership of the proposed association exists for the grant of a certificate in this instance.”
Decision on appeal to the Upper Tribunal
Allowing the appeal, His Honour Judge Huskinson held that the FTT has a wide discretion under s. 29 which will include consideration as to whether the potential membership comprises a substantial proportion of the qualifying tenants. It is, however, only one relevant consideration. Section 29(1) does not impose any requirement for a minimum percentage. It is, therefore, wrong for the FTT to consider an application for a certificate on the presumption that, absent special circumstances, a certificate should be refused if the proposed membership represents less than 60% of the potential membership. Another factor will be the proportion of the overall variable service charges payable. HHJ Huskinson also considered that any history of complaints or apparent breakdown in relations would also be relevant.
This is an important breakthrough for tenants who wish to form recognised tenants’ associations and should stop the blind application of the 60% threshold. It was, indeed, unclear where the 60% figure was derived from and was in stark contrast with the right to appoint a manager or for an RTM company to take over the management of a block of flats.
One matter which was left undecided was whether, in considering whether a majority of qualifying tenants supported an application for a certificate, account should only be taken of qualifying tenants who are wholly independent of the landlord.
Following the Upper Tribunal decision in Rosslyn Mansions, the Department for Communities and Local Government has issued a “discussion paper” to explore ways in which to make it easier for tenants’ association to obtain recognition.
Rebecca Cattermole of Tanfield Chambers appeared for the Appellant.