First-tier Tribunal Approves Lease Variation for Service Charges

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/45UH/LVT/2020/0005 & 0006

Property

:

[ADDRESS], [ADDRESS], Goring-by-Sea, Worthing

Applicant: [redacted] Limited and the long lessees

Representative

:

[COUNSEL] [RESPONDENT]

Respondent: [redacted]

(1) [COMPANY] (2) [RESPONDENT]

:

Type of Application

:

Landlord & Tenant Act 1987 Section 37 Variation of a lease

Tribunal Member(s)

:

Judge D. R. Whitney

Date of Determination

:

22nd January 2021

DETERMINATION

Background

2 1. The Applicant, [ADDRESS] Association Limited manages the Property, [ADDRESS], Worthing.

2. The Property consists of an estate made up of 6 blocks of flats with 48 flats in total. All 48 leaseholders joined in with making the application.

3. The two companies named as Respondents are the freeholders of [ADDRESS]. A separate application was made in respect of each separate freehold.

4. Directions were issued in respect of both claims on 4th December 2021. These directions provided that both claims would be consolidated and dealt with together. The Applicant’s solicitors have provided two electronic bundles. The bundles are in similar form and references in [] are to pages within the bundle of case CHI/45UH/LVT/2020/0005. In reaching its determination the Tribunal considered both bundles.

The Law

5. The relevant law is set out in section 37 of the Landlord and Tenant Act 1987 (“the Act”) a copy of which is annexed hereto marked A.

Determination

6. The directions provided that the matter was to be determined on paper. The Tribunal notes that no parties have objected to such determination. I did consider the bundle and I am satisfied that this case remains suitable for determination on the papers in accordance with the Tribunal rules.

7. The Application [1-12] sets out what is sought. The [COMPANY] manages the development as a whole. The [NAME] each own part of the freehold. The Application contains a full list of all 48 leaseholders and the freeholders [15-20].

8. Within the bundle are copy sample leases and deeds of variation for each of the 6 blocks within the estate. The Applicant confirms that all of the leases are substantially in the same form. The Applicant seeks to vary the leases to give effect to the method in practice adopted for dealing with service charges and to modernise the lease.

9. As drafted each block should pay for its own repairs and maintenance. In practice the [COMPANY] has dealt with the estate as one, with each flat contributing equally to the costs. I am told this has been the practice for many years.

10. Within the bundle are copies of consents from all 50 interested parties (48 leaseholders and two freeholders) other than the [COMPANY] [178-228]. It is confirmed within the Application that the

3 [COMPANY] itself consents to the proposed variation. In accordance with the directions the [COMPANY] served copies of the Application and the directions upon all parties and no objections have been received.

11. I am satisfied that the application to vary the leases is unanimously supported by all interested parties. I am satisfied that the qualifying requirements of section 37 of the Act are met.

12. Further I am satisfied that the object to be achieved by the variation requires all leases to be varied. I am satisfied that it is in the interests of justice to vary the leases in the way sought.

13. I confirm that I make order in the terms attached marked Annex B.

Annex A

Section 37 of the Landlord and Tenant Act 1987

Application by majority of parties for variation of leases.

(1)Subject to the following provisions of this section, an application may be made to the appropriate tribunal in respect of two or more leases for an order varying each of those leases in such manner as is specified in the application.

(2)Those leases must be long leases of flats under which the landlord is the same person, but they need not be leases of flats which are in the same building, nor leases which are drafted in identical terms.

(3)The grounds on which an application may be made under this section are that the object to be achieved by the variation cannot be satisfactorily achieved unless all the leases are varied to the same effect.

(4)An application under this section in respect of any leases may be made by the landlord or any of the tenants under the leases.

(5)Any such application shall only be made if—

(a)in a case where the application is in respect of less than nine leases, all, or all but one, of the parties concerned consent to it; or

(b)in a case where the application is in respect of more than eight leases, it is not opposed for any reason by more than 10 per cent. of the total number of the parties concerned and at least 75 per cent. of that number consent to it.

(6)For the purposes of subsection (5)—

(a)in the case of each lease in respect of which the application is made, the tenant under the lease shall constitute one of the parties concerned (so that in determining the total number of the parties concerned a person who is the

4 tenant under a number of such leases shall be regarded as constituting a corresponding number of the parties concerned); and

(b)the landlord shall also constitute one of the parties concerned.