First-tier Tribunal Denies Certificate for Tenant Association

OUTCOME: Refused

1 Case reference: MAN/00CA/HTA/2023/0002 Property: Kenworthy’s [ADDRESS] [POSTCODE] Applicant: [redacted] Respondent: [redacted] recognition of a tenants’ association Tribunal Members: Judge J.M.[NAME_2] A.[NAME_2] Date of Hearing: Determined without an oral hearing Date of Decision: 3 May 2024 _______________________________________________

DECISION ____________________________________ © CROWN COPYRIGHT 2024 FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 The Decision The Application for a certificate of recognition of [COMPANY_1] is refused. Background 1. By an Application (“the Application”) dated 1 November 2023, the Applicant, [COMPANY_1], (“[NAME_1]”) a recently established tenants’ association at [NAME_3], [ADDRESS] [POSTCODE] applied to the Tribunal under Section 29(1) of the Landlord and Tenant Act 1985 (“the Act”) for a certificate of recognition.

2. The Respondent (“the Landlord Management Company”) is [COMPANY_7].

3. The Tribunal issued Directions on 26 January 2024, setting out the issues for it to consider, how the parties should prepare, the timetables for the provision of relevant documents and confirming that it considered it appropriate for the matter be determined by way of a paper determination, but that any of the parties could request an oral hearing.

4. The bundle of documents supplied by [NAME_1] included a statement of case and responses, extracts from of a registered lease, copies of a Decision of the Tribunal under section 20ZA of the Act dated 27 November 2023, various letters, an undated constitution, a list of members, emails, texts, notices, agendas, minutes of 3 meetings, a newsletter and posters/flyers advertising social gatherings.

5. The Landlord Management Company’s bundle of documents included its statement of case and responses, statements from its Chairperson Director, another Director, 2 past Directors, and its consultant surveyor, plans, letters, emails, text messages, review documents, reports and photographs. The Property and its ownership 6. [NAME_3] has not been inspected by the Tribunal. The papers confirm that it is classed as a non-designated heritage asset and that the original part which was originally a Victorian hydropathic establishment dates from around 1860. An Edwardian part of the building was added in 1908 and there have been various subsequent extensions. The Tribunal has been able to gain useful insights from Google’s [ADDRESS] and satellite images.

7. It is understood that [NAME_3] now consists of 42 flats each held under comparable [NAME_4] 999-year term leases whereby each owner is due to pay through the service charges a proportion of the costs, of inter alia, maintaining, repairing, decorating and renewing the main structure and roof, the common parts and other specified matters. It is also understood that the Landlord Management Company is owned by all the [NAME_4] owners, with each [NAME_4] owner being a shareholder.

3 The parties’ written submissions 8. The parties have made wide-ranging and lengthy submissions.

9. Because of the extent of the written representations, which are on record and which the parties have access to, it would be superfluous and in Tribunal’s opinion, particularly because of the palpable antipathy between certain individuals and various entrenched positions, counter-productive to attempt set out their full detail in these reasons. Very many of the submissions refer to matters which are largely outside its present jurisdiction, and do not bear directly on the Application.

10. The Tribunal has instead decided that it is sufficient to note the following matters as being relevant to, and to help explain, its decision-making.  [NAME_1]’s inaugural meeting was held on 12 October 2022. The minutes refer to 5 attendees including 2 from the same [NAME_4], and agreement as to the appointment of the Chair and Secretary;  it appears that at some time in 2023 the constitution document was drafted. It is not clear from the papers how, if, or when it was adopted by the members of [NAME_1]. (The undated copy submitted with the Application had a space at the end for signature by the Chair but was unsigned. A later copy has the Chair and Secretary’s signatures typed in);  an email in March 2023 from the Secretary of [NAME_1] to the Landlord Management Company’s managing agents referred to the inaugural meeting, that the numbers of interested residents were growing, and requested contact information for other owners;  a later email in May 2023 from the Secretary stated, inter alia, “on 24th January we sent out a request for you to consider granting us recognition of our residents’ association. You responded that you would discuss the subject at the next meeting, we have not yet received an answer. We also await details after our request for contact information from other owners, (we realise that the time limit for this aspect of our enquiry has not yet passed)..”;  the minutes of a second meeting on 21 June 2023 refer to 7 people being present, of whom 4 are noted as [NAME_4] owners on the list later supplied with the Application. The Chair is not noted as having been present at this meeting;  the minutes of a third meeting on 4 October 2023 refer to 11 people being present (with 2 separate instances of 2 individuals representing a single [NAME_4]). 7 of those attending are noted as [NAME_4] owners on the members list later supplied with the Application;  on 1 November 2023 the Application was made to the Tribunal. The list of members of [NAME_1] referred to there then being 16 owners (38.1%) and 6 “[NAME_4]- term renters” (14.2%);

4  2 of the 7 [NAME_4] owners who had been 4 October 2023 meeting, later in November and December, asked the Landlord Management Company to remove their names from the list of [NAME_1]’s members. One stated “I don’t agree with what was said on my behalf in the minutes of the Residents Meeting of 4 October 2023. I am not aware that any of the issues in the minutes were discussed at what seemed to be merely a social gathering”;  [NAME_1]’s Secretary maintains the withdrawals were obtained by the Chair of the board of the Landlord Management Company using “misinformation and emotional manipulation”. The Landlord Management Company aver to those running [NAME_1] using the same tactics to secure their aims. The Law 11. Section 29(1) of the Act begins with the words “a recognised tenants association is an association of qualifying tenants (whether with or without other tenants) which is recognised for the purposes of the provisions of this Act relating to service charges…” 12. The definition of qualifying tenants is found in section 29(4) which confirms that “tenants are qualifying tenants if each of them may be required under the terms of his lease to contribute to the same costs by the payment of a service charge.” 13. An association of qualifying tenants may be recognised for these purposes by notice given by the landlord. Alternatively, it may be recognised by a certificate given by the Tribunal under section 29(1)(b)(i).

14. An association which is a “recognised tenants’ association” as defined by section 29(1) of the Act has certain rights concerning the management of the premises concerned: it has the right:– • to receive notices and propose names of contractors for tender in a statutory consultation process carried out by the landlord under section 20 of the Act; • to be sent copy estimates obtained for the purposes of such a consultation process; • to ask for a summary of costs incurred (section 21); • to inspect relevant accounts and receipts (section 22); • to ask for a written summary of insurance cover (Schedule para 2(1)); • to ask to be consulted about appointment or re-appointment of a managing agent (section 30B); and • to appoint a surveyor to advise on any matter relating to service charges, who would have the right to see and copy relevant documents held by the landlord and be able to inspect the communal areas and appoint assistants (section 84 of the Housing Act 1996).

15. In deciding whether to grant a certificate of recognition, the Tribunal must apply the Tenants’ Associations (Provisions Relating to Recognition and Provision of Information) (England) Regulations 2018 (“the Regulations”).

5 16. Regulation 3 lists the following matters to which the Tribunal must have regard when deciding whether to give a certificate of recognition, and which were referred to in the Directions: • the composition of the membership of the tenants’ association; • the tenants’ association’s rules regarding membership, including whether tenants who are not qualifying tenants are entitled to become members; • the tenants’ association’s rules regarding decision making; • the tenants’ association’s rules regarding voting; • the extent to which any fees or charges payable in connection with membership of the tenants’ association apply equally to all members; • the extent to which the constitution of the tenants’ association takes account of the interests of all members; • the extent to which the tenants’ association is independent of the landlord of the dwellings to which the association relates; • whether the tenants’ association has a chairperson, secretary and treasurer; • whether the constitution of the tenants’ association may be amended by resolution of the members and the rules regarding amendment; • whether the tenants’ association’s constitution, accounts and list of members are kept up to date; and available for public inspection; and • the extent to which the association operates in an open and transparent way.

17. Regulation 4 provides that the Tribunal must not give a certificate of recognition in certain circumstances: where the tenants’ association represents fewer than 50% of the qualifying tenants (save for one instance which does not apply to the present case); where a previous certificate is still in force; and where the Tribunal is not satisfied that the constitution and rules of the tenants’ association are fair and democratic. The Tribunal’s Reasons and Conclusions 18. The Tribunal convened on 2 May 2024 to determine the Application.

19. The Tribunal began with a general review to decide whether the case could be dealt with properly without holding an oral hearing. None of the parties have requested one and the Tribunal is satisfied that this matter is suitable to be determined on the papers, which provide sufficient evidence of the relevant facts, allowing conclusions to be properly reached in respect of the issues to be determined.

20. The qualifying tenants at [NAME_3], as defined by section 29(4) of the Act, are restricted to the [NAME_5] who are obliged to contribute to the service charges levied by the Landlord Management Company. Those occupiers under short-term leases or otherwise, who do not have a liability to contribute to the service charges, are not qualifying tenants.

21. The percentage of qualifying tenants ie [NAME_4] owners on [NAME_1]’s list of members as presented to the Tribunal was but 38.1%, and that percentage is further reduced when taking out of account those [NAME_4] owners who confirmed that they did not want their names to be included in support of the Application, even if some may have later reversed that decision.

6 22. The Application inevitably therefore fails at the first hurdle because [NAME_1] represents fewer than 50% of the qualifying tenants. As regulation 3 confirms, in such circumstances the Tribunal is prohibited from issuing [NAME_1] with a certificate of recognition.

23. Even if [NAME_1] had been able to satisfy the necessary precondition of having sufficient numbers of qualifying tenants, the Tribunal would not, as matters stand, have felt able to grant it recognition because of not being satisfied as to the mechanics of governance or that its rules and constitution are fair, democratic or sufficient - the constitution makes no distinction between qualifying tenants and other occupiers as regards decision-making and voting; contains little or no guidance as to how or when it might legitimately be amended; a quorum is referred to, but not specified; and the constitution states “the association will be run by a committee consisting of a chair, and secretary, as yet no treasurer is needed…”.

24. The Tribunal also has concerns, from its analysis of the papers, as to the extent to which [NAME_1] has operated in an open and transparent way; noting particularly the proportion of qualifying and other tenants included at one time or another on [NAME_1]’s lists of members who had felt the need to signal that they had not known exactly, or properly understood, what they were being asked to lend their names to.

25. For all these reasons, the Tribunal is unable to issue the requested certificate.