First-tier Tribunal Corrects Lease Terms Due to Original Mistake

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/47UB/LVT/2022/0001 Property : The leasehold properties listed in Part 1 the Schedule 1 Applicant :

[redacted] : [COMPANY] Respondent : [redacted] Schedule 1 Type of application :

To vary two or more leases by a majority pursuant to section 37 of the Landlord and Tenant Act 1987 ("the 1987 Act").

Tribunal : Judge D Barlow Date of Decision : 14 December 2022 Date Decision issued : 19 December 2022

DECISION

2 DECISION The Tribunal orders that the leases listed in Part 1 of Schedule 1 hereto, held by the leaseholders listed in Parts 2 of Schedule 1 hereto, are varied in accordance with the terms of the Order accompanying this decision.

REASONS The Application 1. The Applicant is the freeholder landlord of the 98 purpose-built flats listed in Part 1 of Schedule 1. The Respondent leaseholders listed in Part 2 of Schedule 1 are the current tenants of the flats, which they hold under their respective leases listed in Part 1 of Schedule 1 (“the leases”).

2. The Applicant seeks an order under s37 of the 1987 Act, varying the leases. The variation sought is straightforward. Due to a mistake on the grant of the original leases they were demised to the tenants for a term of 125 years from a specified date which was earlier than the date of the lease. Consequently, the unexpired term of the leases when granted, was less than the term of 125 years required by Schedule 6 Part III paragraph 12(1) of the Housing Act 1985 (the appropriate lease term under the right to buy scheme).

3. To correct the mistake the Applicant’s proposed variation is to delete reference to the term commencement date specified in Clause 1 of the leases and replace it with the words “from the date of this lease”. The effect of the variation will be to vary the unexpired term of the leases, so that all leases will have been granted for be for a term of 125 years from the date of the lease. Compliance with s37 of the 1987 Act 4. The relevant statutory provisions are set out in Schedule 2.

5. Notice of the application has been served on the leaseholders and interested parties. The Tribunal has not received any objections from the leaseholders.

6. The landlord states that prior to filing the application it balloted the leaseholders on the proposed variation. 81 leaseholders consented to the variation, the landlord has unsurprisingly consented to the variation, 17 did not return the ballot. 82 of the possible 99 participants have therefore consented to the proposed variation which is 82.83%. The 1987 Act requires that at least 75% of the relevant parties to have consented. There are no objectors.

3 Decision and reasons 7. I am satisfied that the requirements of section 37(5) are met, namely that the application was not opposed by more than 10 per cent of the total number of relevant parties and at least 75 per cent of that number consented to it.

8. Can the object be achieved satisfactorily without all the leases being varied to the same effect? (s.37(3)) The object of the application is to correct a mistake made on grant of the leases concerning the term that should have been granted pursuant to the Schedule 12 of the Housing Act 1985. All leases contain an identical mistake. The objective of correcting the mistake can only be accomplished by varying all affected leases, which in this case means all the leases being varied to the same effect.

9. If an order varying the leases is made, should the Tribunal order a person to pay compensation to any [NAME] (s.38(10)). The order corrects a mistake. The mistake did not confer any advantage on the leaseholders that could be prejudiced by its correction. There is therefore no loss or disadvantage that requires me to consider compensation.

10. I have considered the method by which the variations should be made. To order a formal written deed for each lease is disproportionately expensive and time consuming. It is also not practicable to order endorsement of the variation on the original and counterpart leases. The Applicant prepared a draft order for the approval of the Tribunal. It is on substantially the same terms as the Order which accompanies this decision. The Order should enable an application to be made to HM Land Registry for the variation to be noted on the register of each leasehold title and on each relevant reversionary title.

11. Within 21 days of this decision the Applicant shall file stamped addressed envelopes addressed to each leaseholder, (all 98), to enable the Tribunal to serve a copy of this Decision on the leaseholders (as required following the Upper Tribunal decision in Hyslop v 38/41 CHG Residents Co Ltd [2017] UKUT 0398 (LC)).

Name: Judge D Barlow Date: 14 December 2022

4 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 application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The application 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 application is not made within the 28 day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit.

The application 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 application is seeking.

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

5 Schedule 1, Part 1

Freehold Title – WR86218 [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS],[POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

Freehold Title – WR85921 [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – WR86807 [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

6 Freehold Title – WR85881 Leasehold Title Leasehold Address N/A [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

7 Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – WR86461 Leasehold Title Leasehold Address WR85082 26 Shawfield, Hollywood, Birmingham, [POSTCODE] WR70719 7 Shawfield, Hollywood, Birmingham, [POSTCODE] WR107107 19 Shawfield, Hollywood, Birmingham, [POSTCODE]

Freehold Title – WR86405 [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – WR129563 [ADDRESS], [POSTCODE]

8 Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

9 Freehold Title – [ADDRESS], [POSTCODE] [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

Freehold Title – [ADDRESS], [POSTCODE]

10 Schedule 1, Part 2

[COMPANY] [NAME] Mr [NAME] Mr [NAME] & Ms [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME]

11 Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mr [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME]

12

[NAME] Mrs L [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Mrs [NAME] Ms [NAME] Ms [NAME] Ms [NAME] Ms [NAME] Ms [NAME] Ms [NAME] [COMPANY]

13 Schedule 2- the relevant Law

Sections 37 & 38 of the Landlord and Tenant Act 1987

37.— 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 [NAME] 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 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.

38.— Orders varying leases.

(1) ……

(2) ……

14 (3) If, on an application under section 37, the grounds set out in subsection (3) of that section are established to the satisfaction of the tribunal with respect to the leases specified in the application, the tribunal may (subject to subsections (6) and (7)) make an order varying each of those leases in such manner as is specified in the order.

(4)……

(5) If the grounds referred to in subsection (2) or (3) (as the case may be) are established to the satisfaction of the tribunal with respect to some but not all of the leases specified in the application, the power to make an order under that subsection shall extend to those leases only.

(6) A tribunal shall not make an order under this section effecting any variation of a lease if it appears to the tribunal —

(a) that the variation would be likely substantially to prejudice— (i) any [NAME], or (ii) any person who is not a party to the application,

and that an award under subsection (10) would not afford him adequate compensation, or

(b) that for any [NAME] reason it would not be reasonable in the circumstances for the variation to be effected.

(7) …….

(8) A tribunal may, instead of [NAME] an order varying a lease in such manner as is specified in the order, make an order directing the parties to the lease to vary it in such manner as is so specified; and accordingly any reference in this Part (however expressed) to an order which effects any variation of a lease or to any variation effected by an order shall include a reference to an order which directs the parties to a lease to effect a variation of it or (as the case may be) a reference to any variation effected in pursuance of such an order.

(9) A tribunal may by order direct that a memorandum of any variation of a lease effected by an order under this section shall be endorsed on such documents as are specified in the order.

(10) Where a tribunal makes an order under this section varying a lease the tribunal may, if it thinks fit, make an order providing for any party to the lease to pay, to any [NAME] party to the lease or to any [NAME], compensation in respect of any loss or disadvantage that the tribunal considers he is likely to suffer as a result of the variation.

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