The contentious Housing and Planning bill has now been enacted after much debate in Parliament. The bill was not originally intended to address any leasehold legislation but, during its passage, two key leasehold amendments were introduced in the Commons and the Lords. These amendments went on to be supported by both the government and the opposition and now come into force. These are amendments which should be welcomed by all leaseholders.
Section 130 – Tenants’ associations: power to request information about tenants
This gives the Minister the power to create detailed regulations entitling tenants groups (in this case ‘tenants’ = long leaseholders) to request contact information regarding fellow leaseholders so that they can then create and maintain a Recognised Tenants Association.
Regulations will now be produced to set out how and when the landlord must supply this information. The provisions only apply to England. Wales has the right bring forward its own wording on these matters.
LKP hopes to play an active role in suggesting those issues which officials will need to consider as part of the new regulations.
RTA’s are important, not because they provide many additional powers, but because they are the best means for leaseholders to effectively present their joint interests. As many of you will know RTA’s are often strongly resisted by many landlords. At the West India Quay hearing in 2014, where the landlord sought to oppose the formation of an RTA under any circumstances, surveyor Bruce Maunder Taylor, expert witness for the landlord, explained that RTA’s are sometimes comparable to trade unions from the 1970’s.
The fact that the landlord in the West India Quay case felt it relevant to spend over £75,000 resisting the creation of an RTA would go on to mean that it would became one of two key cases which finally led the government to review the rules and understand why the legislation needed to be changed.
LKP would like to acknowledge the work of both Sir Peter Bottomley MP and Lord Young in introducing the relevant wording, and offer thanks to barrister Amanda Gourlay who helped draft the initial wording.
This has been an issue which LKP has campaigned on for a number of years, in a project supported by groups such as the London Assembly, AgeUK, the British Property Federation, Centre Forum and the FPRA.
There have of course been many in the sector who have been less keen to see the law change. We still have far too many groups who want to blame the sectors problems on a lack of leaseholder understanding. Many of these same groups choose not to notice that a large number of landlords and managing agents do all in their power to ensure that forming an RTA is currently almost impossible.
We now know that preventing leaseholders from forming an RTA in one of the best ways to suppress the leaseholders joint understanding of the problems they face. It seems ironic that in the same week that the new legislation comes into force the landlord who spent £75,000 opposing an RTA faced a different sort of hearing for another site they own. Surprise surprise, landlords counsel made a point of noting that the applicants in the case regarding an appointment of a receiver manager had not succeeded in forming an RTA.
Section 131 – Limitation of administration charges: costs of proceedings
This is a major change in the costs regime at both the Tribunal and the County Courts. In situations where a landlord initiates an action against a leaseholder, the Courts and Tribunals are now allowed to use their discretion in limiting any costs which the landlord seeks to pass on to the leaseholder as administrative charges. Under the previous system there had been a growing number of cases where landlords had run up what the courts have described as “astronomical” costs, knowing that they could pass them on to the leaseholder.
S131 gives the Courts and Tribunals discretion to prevent the landlord from passing on some or all of those costs. Hopefully we will now see no more disputes starting in the County Court over debts of two or three thousand pounds, which turn into legal bills of ten or twenty thousand pounds. For those cases which are currently in progress both parties will need to consider how the new legislation applies. (as noted by anon in comments the commencement date for s131 has yet to be set and will not apply until that date is set)
Readers may remember that LKP reported the case of Dennis Jackson, where the landlord’s actions almost led to Mr Jackson’s £800,000 flat being forfeited, due to the landlord’s massive and spiraling legal costs.