2014: a month by month review

The mechanics of consulting exercised HHJ Huskinson in Trafford Housing Trust Ltd v Rubinstein [2013] UKUT 0581 (LC). Rather startlingly, it transpired that the meaning of “the date of the notice” in the Service Charges (Consultation Requirements) Regulations 2003/1987 had not been the subject of an Upper Tribunal decision before.

HHJ Huskinson held that the date of the notice must mean the date on which the notice came to the attention of the lessee, rather than the actual date printed or written on a consultation notice.

The service charge year would not be complete without an appearance from Morshead Mansions. The unfortunate Mansions made just one appearance in the courts of record this year, in an appeal which contains a useful review of the law of breach of statutory duty.

The point at issue before the Court of Appeal in Morshead Mansions Ltd v Di Marco [2014] EWCA Civ 96 was the nature of the sanction for failure to comply with section 22 of the Landlord and Tenant Act 1985. Section 22 allows a lessee to request certain information from his/her landlord. Mr Di Marco had made such a request, but no information had been forthcoming. Mr Di Marco had sued for an injunction to compel disclosure of that information.

In a judgment which reviews the remedies for a wide range of breaches of landlord and tenant law, Lewison LJ., held that the only sanction available for breach of section 22 was a prosecution.

Back in the Upper Tribunal, Martin Rodger QC applied his mind to administration charges in McGhee v Proxima GR Properties Ltd [2014] UKUT 0059 (LC). It was the first of two useful cases this year on administration charges as defined by Schedule 11 to the Commonhold and Leasehold Reform Act 2002. I should note that I published my review of it in September.

With the advent of spring came Red Kite Community Housing Ltd v Robertson [2014] UKUT 0134 (LC). Siobhan McGrath, the President of the First-tier Tribunal (Property Chamber) decided this case, which gave guidance on the extent to which the FTT can rely on its own knowledge and expertise in determining a case.

Costs are never far from the minds of parties to proceedings in the FTT. In April, in Virani v Chelsea Harbour Ltd LON/00AN/LSC/2013/0467, the Tribunal considered and applied its new powers to award unlimited costs under rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013/1169.

May was bookmarked in everyone’s diaries as the month in which the on-off affair between Phillips v Francis and the Court of Appeal would finally be put to bed.

We were however all foiled. Ten days or so before the hearing, the Secretary of State for Communities and Local Government woke up to the brouhaha surrounding the case. His intervention resulted in the hearing being adjourned to October.

May was also the month in which the Court of Appeal was due to hear the appeal from Mann J’s judgment in Morshead Mansions Ltd v Mactra Properties Ltd [2013] EWHC 224 (Ch). Sadly for the legal and accounting professions however, the parties settled their differences without the assistance of the Court of Appeal. The hearing was therefore vacated.

I am ashamed to say that I published just one post in May, and that from a decision handed down in December 2013. It was Part II of another Upper Tribunal decision on costs: Conway v Jam Factory Freehold Ltd [2013] UKUT 0592 (LC). This time Martin Rodger QC’s beady eye was turned on the justice and equity of making a section 20C order in favour of lessees who had failed in their application for the appointment of a manager. The FTT had considered that a section 20C order was just and equitable. Martin Rodger QC disagreed.

Windermere Marina Village Ltd v Wild, Barton [2014] UKUT 0163 (LC) took us up to the Lake District for a firm reminder that there can be no contracting out of section 27A of the Landlord and Tenant Act 1985. In that context, the surveyor’s decision on apportionment cannot be final.

Folllowing my debut in 2013, I recorded another podcast for LEASE, the leasehold advisory service, this month. This time we tackled forfeiture.

Just before the tennis began in Wimbledon, Portcullis House provided the setting for a meeting, organised by Martin Boyd of the Leasehold Knowledge Partnership, to debate the ups and downs of commonhold. I started from a position of considerable ignorance of that form of tenure. I was glad of the opportunity to learn.

And finally, at the end of June, in a coup for women in property, Louise Brooke-Smith became President of the RICS.

High summer came in with a bang.

Qdime Ltd v Bath Building (Swindon) Management Company Ltd [2014] UKUT 0261 (LC) looked at terrorism insurance and the meaning of “explosion”.

Following the settlement of Morshead Mansions Ltd v Mactra Properties Ltd [2013] EWHC 224 (Ch), the 19 July edition of the Estates Gazette carried an article on the meaning of the word “incurred” in the service charge context. Co-authored by Gordon Whelan, a chartered accountant, and me, it was entitled “Two professions divided by a common language”. Enough said.

On 25 July, about six weeks after my guinea pigs’ second birthday, Law and Lease turned two.

I posted Daejan Properties Ltd v Griffin [2014] UKUT 0206 (LC) in August.

Griffin is no poor relation to Daejan Properties Ltd v Benson [2013] UKSC 14. It is a stand alone case on historic neglect, and the first on the subject in eight years since Justin Bates’s first reported case in the then Lands Tribunal, Continental Property Ventures Inc v White [2006] 1 EGLR 85.

If time is short, it is worth reading just paragraphs 89 and 90 of Griffin for the kernel of the decision as to how to set up the equitable set off of historic neglect to a claim for service charges.

The second case on administration charges came into our lives in the second half of the year.

I found Barrett v Robinson [2014] UKUT 0322 (LC) a challenging read, but well worth the effort. It has probably altered the way in which landlords across the country formulate their chaser letters for unpaid service charges.

In short:

• It is no longer enough for a landlord to demand payment of legal costs relating to recovery of service charges
• By relying on a lease clause permitting recovery of the costs incurred in the preparation of a notice under section 146 of the Law of Property Act 1925,
• If it cannot be shown that the landlord had forfeiture in mind when incurring those costs.

September closed with the second annual Tanfield Chambers service charge summit, ably and indispensably supported by News on the Block. If you missed it, you missed – amongst other things:

• A case law update from Philip Rainey QC;
• A workshop on the whys and wherefores of communal heating systems from Rob Bowker;
• A session on estate rentcharges from Tim Polli and Michael Walsh; and
• A debate with James Fieldsend and Cecily Crampin on the as-yet unresolved consultation issues which can arise in major works projects.

I loved it, and plans are already afoot for next year’s summit: limitation is already on the list of potential sessions.

October was a busy month service charge-wise, both generally and personally. My personal busy-ness was sandwiched between two events of general importance.

On 01 October 2014, it became mandatory for all lettings agents and property managers in England to be members of a Government approved redress scheme. Three schemes have been approved:

(1)  The Property Ombudsman;

(2)  Ombudsman Services: Property, and

(3)  The Property Redress Scheme.

You can read more about the redress schemes here.

Over the first ten days of the month, I confronted my demons – aka the camera – in order to film my one minute video submission to the Property Management Awards. I now know why films take such a long time to wrap. It took the best part of two hours to record just one minute of acceptable(ish) footage.

The ARMA conference took place on 16 October. Delegates heard from the organisation’s new Chairman, Martin Perry, and the outgoing Chief Executive of the British Property Federation, Liz Peace.

It was an enjoyable day all round, but the stand-out speaker was that force of nature, the RICS’s Global Residential Director, Peter Bolton King. He gave a vivid presentation on BIM, otherwise known as Building Information Modelling. You can download a free introductory paper on BIM from the RICS’s website here. If you are truly enthused, you may be interested in the Fourth RICS BIM Conference, which takes place on 12 February 2015.

The month closed with Halloween, and the Court of Appeal’s handing down of its judgment in Phillips v Francis, except that it in appeal speak it is described as Francis v Phillips, Secretary of State for Communities and Local Government intervening [2014] EWCA Civ 1395.

So many of us had been eagerly awaiting that witching hour, but it passed with scarcely a cackle. As had broadly been expected, the Court of Appeal reversed the former Chancellor’s judgment of December 2012. The twenty-two anguished months of debate between the Chancellor’s judgment and the Court of Appeal’s correction will, I suspect, be but a minor smudge in the margin when the history of residential service charges comes to be written.

It could perhaps be said that, in terms of consultation, the Court of Appeal has been Sense and Sensibility’s steadfast Colonel Brandon. Its judgment in Martin v Maryland Estates [1999] 2 EGLR 53 was practical authority for the scope of consultation before the former Chancellor’s unruly Willoughby of a decision in December 2012, and it restored a degree of balance after nearly two years of upheaval.

In November, our attention moved from consultation to limitation, with Parissis v Blair Court (St John’s Wood) Management Company Ltd [2014] UKUT 0503 (LC). Neither party was legally represented in the appeal, leading HHJ Huskinson to comment that this was not the case for an exhaustive examination of limitation in the sphere of residential service charges.

The appeal did however remind First-tier Tribunals that the doctrine of laches, the equitable doctrine of delay, was generally not relevant to section 27A applications because those applications are not founded in equity.

December was rather a front-loaded month.

First, on 02 December, the Competition and Markets Authority (the erstwhile Office of Fair Trading) published its market study of the residential property management sector. The CMA concluded that the sector was not in need of statutory regulation.

Reviews of the study populated the web throughout the month. Among the commentators were ARMA, the Leasehold Knowledge Partnership and David Clark, the current chair of the IRPM.

Two days after the publication of the CMA study, hundreds of property management people gathered at the Troxy in East London for the Property Management Awards 2014. It transpired that my two-hour investment in one minute of video footage had been worthwhile when Law and Lease won the Best Services Provider category.

In the rather odd case of Nogueira v Lord Mayor & Citizens of Westminster [2014] UKUT 0327 (LC), the FTT declined to reduce the amount payable by lessees for unsatisfactory major works, deciding instead that the local authority’s undertaking to remedy that work should stand in place of a reduction in cost. The Upper Tribunal refused to allow the FTT’s decision to stand.

On 15 December, LEASE announced that Roger Southam FRICS had been appointed as its new non-executive Chairman. Roger took up his new post for a five year term, starting on New Year’s Day 2015.

As the year drew to a close, there was a flurry of ARMA-Q accreditations, many of them announced by ARMA on twitter. The scheme is due to go live in early 2015.

We enter the New Year with new faces in key positions of the British Property Federation, the RICS, ARMA and LEASE.

Which issues will exercise them, the courts, tribunals, landlords, lessees and managing agents in 2015? Will a new bête noire replace consultation? Will there be further scrutiny of the scope of clauses allowing landlords to recover the costs of and incidental to the preparation of a section 146 notice?

Whatever the answer to these questions, I am looking forward to another year of recording service charge decisions.

In the meantime, I wish you a very Happy New Year.

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