Transcript Understanding your rights Service Charges

Understanding your rights
Service Charges
Ealing Council Leaseholders Association
29 February 2012
Dona Awano
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LEASE and what it does
• LEASE is an NDPB providing free initial advice on
residential leasehold law for England and Wales
• We run training, outreach events and on location advice
surgeries
• We provide input to government through working parties
and consultations
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How we deal with enquiries
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Who we help
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Areas of advice
• The leasehold system
− The duties and obligations of the landlord and leaseholder
• Service charge
− Statutory consultation on charges arising from works or contracts
− Right to challenge service charge
− How to apply to the Leasehold Valuation Tribunal (LVT)
• Rights and information
− Summaries of service charge and accounts
− Right to inspect documents
− Information on landlord
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Areas of advice
• Right to manage
− Statutory right for leaseholder to take over the management of the
building
• Extending the lease
− Statutory rights and procedures
• Buying the freehold
− Statutory rights for leaseholder of houses
− Collective enfranchisement for leaseholder of flats
− The Right of First Refusal
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Areas of advice
• Management issues
− What a managing agent does and how to appoint one
− Forfeiture
− Administration charges
− Appointment of a manager by the LVT
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Additional roles
• Chairing
− Leasehold Reform Working Party
− Social Sector Working Party
• Participating in government advice groups
− Department for Work and Pensions
− Law Commission
• Responding to consultation paper on residential leasehold
• Cooperating with other organisations in producing
materials e.g. ARMA, ARHM and AIMS
• Staging annual conference and seminars
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What is a lease
• A document setting out the terms for the occupation of the
premises by the tenant
• A contractual agreement between the parties
• Capable of assignment
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Problems with leasehold
• Lack of understanding of the nature of the tenancy
• Different perspectives of the parties
• Diminishing asset
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Rights and obligations
• The contractual relationship
− Specific terms on the lease
− Implied terms
• Common law
• Statutory requirements
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Statutory Authority
• Landlord and Tenant Act 1985
• Landlord and Tenant Act 1987
• Commonhold and Leasehold Reform Act 2002
• Housing and Regeneration Act 2008
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Crucial questions
• Are costs payable
• Are costs reasonable
• LVT vs. County Court
• Section 27A LTA 1985
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The service charge demand
• Section 47 and 48 LTA 1987
− Must be accompanied by the summary of the rights and
obligations, since October 2007
− Administration charges must also be accompanied by similar
summary
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Construction of lease
• Entitled to recover
• Improvement vs. repairs
• Management costs
• Legal costs
− Section 20C LTA 1985
• Sinking fund
• Sweeper clause
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Machinery in the lease
• Advance payments
− When due
• Certification
− By whom
• Audited accounts required
• Inspection of documents
• Sections 21 and 22 of LTA1985
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Historic service charge
• Section 20B LTA 1985
− City of Westminster vs. Hammond
− Limitation Act 1980
• Rent
− 6 years
• Service charges
− 12 years
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Statutory consultation
• Section 20 LTA 1985
− As amended by Section 151 of the CLRA 2002
− 3 stage process
− Applicable to QLTA
− LVT can determine
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Right to buy
• Section 125 notice
− Payment options
− Various public sector landlords will have payment options
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Continental vs. White
• Historic neglect
• Set - off
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Quantum
• Reasonably incurred
• Reasonable standard
• Advance payments reasonable
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Decent homes
• National strategy for renewal of local authority housing
designed to deal with disrepair issues
• Certain requirements to be met by 2010: “all property the
Decent Homes Standard. To meet the standard, property
must have reasonably modern facilities, be warm and
weatherproof.” (DirectGov website)
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Decent homes
• Huge service charge demands for local authority lessees
• Huge number of enquiries for LEASE
• LVT applications
• Limited if within reference period for RTB leases
• Has to be recoverable under the lease
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Assistance for decent homes
• Landlord may provide a loan
• Mandatory and discretionary directions
• Buy – back
• Exchange sale scheme
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Questions?
The Leasehold Advisory Service
020 7383 9800
[email protected]
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Maple House, 149 Tottenham Court Road
London W1T 7BN
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