First-tier Tribunal Appoints Property Manager Due to Ineffective Management

OUTCOME: Allowed

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case reference : LON/00AW/LAM/2023/0009

Property : 117 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted]

[NAME] : (1) [RESPONDENT] [NAME] (Flat B)

(2) [COMPANY] (Flat C)

(3) [COMPANY] (Flat D)

(4) [NAME] [NAME] (Flat E)

Type of [NAME] : Appointment of Manager

Proposed Manager : [NAME]

Tribunal : Judge [NAME]

[NAME] and venue of Hearing : 19th [ADDRESS] [POSTCODE]

Date of decision : 19th April 2024

DECISION

(1) In accordance with section 24 of the Landlord and Tenant Act 1987, the Tribunal appoints [NAME] [APPELLANT] as Manager of the property at 117 [ADDRESS] [POSTCODE] for a period of 3 years on the terms of the Order attached hereto.

(2) The Respondent shall reimburse the Applicant her Tribunal fees of £300.

Relevant legal provisions are set out in the Appendix to this decision.

Reasons

1. The subject property is a terraced house converted into 5 flats. The freehold is owned by the Respondent. The Applicant is the lessee of Flat A. The [NAME] are the lessees of the other 4 flats.

2. The Applicant has applied for a management order under section 24 of the Landlord and Tenant Act 1987 (the “Act”) to appoint [NAME] [APPELLANT] as the manager of the property.

3. The [NAME] was heard on 19th April 2024. The only attendees were:

(a) The Applicant; and

(b) [NAME] [APPELLANT], the proposed manager.

4. A general meeting of the [COMPANY] was held on 5th February 2024. It was attended by the Applicant and by the sole director, her neighbour and fellow lessee, [NAME] [NAME] [NAME]. Mr [NAME], acting as the company secretary, also attended. [NAME] [NAME] agreed not to appoint [COMPANY] as managing agents (as Mr [NAME] had proposed) and told her that she was happy to leave the issue of the appointment of a manager in the Applicant’s hands. [NAME] [APPELLANT] indicated that she did not want to attend the hearing. She is in the process of refurbishing and selling her flat and so has little interest in the ongoing management of the building.

5. The documents before the Tribunal primarily consisted of a bundle of 184 pages from the Applicant.

6. It is clear that the property is not being managed effectively or at all. [COMPANY] claim to be the managing agents in succession to the previous agents, [COMPANY], but they are two different companies, despite the similarity in names. There is no evidence that they were validly appointed. In any event, the general meeting has put any dispute on that issue to bed.

7. Although the lessees are all members of the freehold company, none of them wish to take on any of its responsibilities over the medium to long term. The Applicant has had bad experiences with the company and fellow lessees over the years, including a 10-year dispute over rising damp, and understandably does not feel up to running the company now, particularly without any input from her fellow lessees. Therefore, the Respondent is not in a position to organise the management of the property.

8. In relation to the management, the Applicant raised a large number of concerns, including:

a) Lessees have carried out alterations to flats without permission or supervision.

b) Flats are being let through AirBnB and the residents are causing a nuisance, including by excessive noise and littering with objects such as condoms and cigarette butts, but no action is being taken against this.

c) Other lets have been made on terms inconsistent with the lease.

d) Service charge budgets were set without any consultation.

e) Service charge demands were not sent out for 2022-23.

f) The advance service charge demands have been excessive relative to previous years.

g) The building reinstatement value was over-estimated so insurance premiums were excessive.

h) Lessees who purchased their flats recently have not been charged any service charges.

i) Damp penetration and drainage problems have not been addressed.

9. In the absence of any other party, the Tribunal was unable to explore the veracity of these allegations. However, the Applicant came across as genuine, truthful and moderate. The Tribunal is satisfied that the Respondent is failing to manage the property in accordance with the leases. It is clear beyond any doubt that it is just and convenient for the Tribunal to appoint its own manager of the property.

10. The proposed manager, [NAME] [NAME], was able to expand on her CV and management plan (included in the bundle) and answer questions from the Tribunal members. She came across well and the Tribunal agrees with the summary contained in one of the 3 previous decisions appointing her as manager (Lytton House LON/00AN/LAM/2020/0002):

she has long experience in the construction industry. The company [[COMPANY]] is IRPM registered, and she has a particular expertise, as a member of the Institute of Occupational Safety and Health. The company has proper Indemnity Insurance (£1,000,000) and maintains separate bank accounts for each property it manages. The company has 45 different properties with which she is involved in West London, some of them very large properties (one a development of 180 flats). Her offices are very local and she has a tried and tested list of local contractors whose work she trusts.

11. [NAME] [NAME] explained that two of her appointments had come to an end after a successful 3 years of her management, with her being appointed by the parties to continue her management at one of the properties. The third will end within a few months but, while she feels she has carried out the essential tasks, 2 of the 3 lessees have been abusive and unco-operative so she will be relieved when it comes to an end. Despite this experience, she still enjoys the satisfaction from turning a building around as a Tribunal-appointed manager.

12. In the circumstances, the Tribunal is satisfied that [NAME] [NAME] is a suitable appointee as Manager of the subject property.

13. The Applicant has had a lone and thankless task bringing this [NAME] to the Tribunal. She asked for an order that the Respondent should reimburse her fees of £300 and the Tribunal is satisfied that it is appropriate to do so.

Name: Judge Nicol Date: 19th April 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have.

If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case.

The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME].

If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit.

The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking.

If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

Appendix – relevant legislation

Landlord and Tenant Act 1987

Section 24

(1) The appropriate tribunal may, on an [NAME] for an order under this section, by order (whether interlocutory or final) appoint a manager to carry out in relation to any premises to which this Part applies--

(a) such functions in connection with the management of the premises, or

(b) such functions of a [NAME],

or both, as the tribunal thinks fit.

(2) The appropriate tribunal may only make an order under this section in the following circumstances, namely–

(a) where the tribunal is satisfied–

(i) that any relevant person either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them or (in the case of an obligation dependent on notice) would be in breach of any such obligation but for the fact that it has not been reasonably practicable for the tenant to give him the appropriate notice, and

(ii) . . .

(iii) that it is just and convenient to make the order in all the circumstances of the case;

(ab) where the tribunal is satisfied–

(i) that unreasonable service charges have been made, or are proposed or likely to be made, and

(ii) that it is just and convenient to make the order in all the circumstances of the case;

(aba) where the tribunal is satisfied–

(i) that unreasonable variable administration charges have been made, or are proposed or likely to be made, and

(abb) where the tribunal is satisfied–

(i) that there has been a failure to comply with a duty imposed by or by virtue of section 42 or 42A of this Act, and

(ac) where the tribunal is satisfied–

(i) that any relevant person has failed to comply with any relevant provision of a code of practice approved by the Secretary of State under section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 (codes of management practice), and

or

(b) where the tribunal is satisfied that other circumstances exist which make it just and convenient for the order to be made.

(2ZA) In this section "relevant person" means a person–

(a) on whom a notice has been served under section 22, or

(b) in the case of whom the requirement to serve a notice under that section has been dispensed with by an order under subsection (3) of that section.

(2A) For the purposes of subsection (2)(ab) a service charge shall be taken to be unreasonable–

(a) if the amount is unreasonable having regard to the items for which it is payable,

(b) if the items for which it is payable are of an unnecessarily high standard, or

(c) if the items for which it is payable are of an insufficient standard with the result that additional service charges are or may be incurred.

In that provision and this subsection "service charge" means a service charge within the meaning of section 18(1) of the Landlord and Tenant Act 1985, other than one excluded from that section by section 27 of that Act (rent of dwelling registered and not entered as variable).

(2B) In subsection (2)(aba) "variable administration charge" has the meaning given by paragraph 1 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

(3) The premises in respect of which an order is made under this section may, if the tribunal thinks fit, be either more or less extensive than the premises specified in the [NAME] on which the order is made.

(4) An order under this section may make provision with respect to–

(a) such matters relating to the exercise by the manager of his functions under the order, and

(b) such incidental or ancillary matters,

as the tribunal thinks fit; and, on any subsequent [NAME] made for the purpose by the manager, the tribunal may give him directions with respect to any such matters.

(5) Without prejudice to the generality of subsection (4), an order under this section may provide–

(a) for rights and liabilities arising under contracts to which the manager is not a party to become rights and liabilities of the manager;

(b) for the manager to be entitled to prosecute claims in respect of causes of action (whether contractual or tortious) accruing before or after the date of his appointment;

(c) for remuneration to be paid to the manager by any relevant person, or by the tenants of the premises in respect of which the order is made or by all or any of those persons;

(d) for the manager's functions to be exercisable by him (subject to subsection (9)) either during a specified period or without limit of time.

(6) Any such order may be granted subject to such conditions as the tribunal thinks fit, and in particular its operation may be suspended on terms fixed by the tribunal.

(7) In a case where an [NAME] for an order under this section was preceded by the service of a notice under section 22, the tribunal may, if it thinks fit, make such an order notwithstanding–

(a) that any period specified in the notice in pursuance of subsection (2)(d) of that section was not a reasonable period, or

(b) that the notice failed in any other respect to comply with any requirement contained in subsection (2) of that section or in any regulations applying to the notice under section 54(3).

(8) The Land Charges Act 1972 and the Land Registration Act 2002 shall apply in relation to an order made under this section as they apply in relation to an order appointing a [NAME] or sequestrator of land.

(9) The appropriate tribunal may, on the [NAME] of any [NAME], vary or discharge (whether conditionally or unconditionally) an order made under this section; and if the order has been protected by an entry registered under the Land Charges Act 1972 or the Land Registration Act 2002, the tribunal may by order direct that the entry shall be cancelled.

(9A) The tribunal shall not vary or discharge an order under subsection (9) on the [NAME] of any relevant person unless it is satisfied–

(a) that the variation or discharge of the order will not result in a recurrence of the circumstances which led to the order being made, and

(b) that it is just and convenient in all the circumstances of the case to vary or discharge the order.

(10) An order made under this section shall not be discharged by the appropriate tribunal by reason only that, by virtue of section 21(3), the premises in respect of which the order was made have ceased to be premises to which this Part applies.

(11) References in this Part to the management of any premises include references to the repair, maintenance, improvement or insurance of those premises.