First-tier Tribunal Extends and Modifies Management Order

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : CAM/26UJ/LVM/2013/0001 CAM/26UJ/LVM/2024/0002 Property : Flats 1-5, 134 [NAME] [POSTCODE] Applicant/Manager : [APPELLANT] Respondents : [redacted]

2. Official Receiver 3. [NAME] [NAME] 4. [NAME] (Flat 1) 5. [NAME] (Flat 2) 6. [NAME] [NAME] (Flat 3) 7. [NAME] (Flat 4) 8. [NAME] [NAME] [NAME] & [NAME] (Flat 5) Tribunal members : Judge David Wyatt Date of decision : 7 February 2025

DECISION

Decision

(1) The tribunal finds that the management order dated 1 August 2013 is continuing in force.

(2) With effect from the date of this decision, the tribunal varies that order as set out in the accompanying management order.

(3) By 14 February 2025 the Applicant must send a copy of this decision and the accompanying management order to each Respondent (in the case of [NAME] [RESPONDENT], to his last known contact details as directed previously), to help ensure they receive them as soon as possible.

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Reasons

1. Under a management order dated 1 August 2013, a tribunal re- appointed the Applicant as manager of the five residential flats and common parts serving these at 134 High Street, [NAME] under section 24 of the Landlord and Tenant Act 1987 (the “Act”). The appointment was expressed to be for an indefinite term, subject to the right to apply for further directions/discharge.

2. The 134 High Street building has a ground floor shop, with the two floors above it accommodating the five residential flats. In 2001, a 999-year head lease of the upper floors and staircase was sold to [NAME] [NAME] [NAME], who granted at least one of the 125-year flat leases in 2002 but thereafter did not comply with the obligations under the head lease and the flat leases. As a result, the Applicant was appointed as manager for two years from April 2011. The management order made in August 2013 then re-appointed him.

3. In 2022, the Applicant discovered that [NAME] [APPELLANT] had been made bankrupt. The Applicant liaised with the Official Receiver about the rights and obligations under the head lease, and sums collected from the flat leaseholders as ground rent.

4. On 18 March 2024, the Applicant wrote to the tribunal office explaining that the freehold had been sold on 12 January 2024. He was unsure about the status of his appointment following that sale and was concerned that it might have terminated. In April 2024, the tribunal replied that (while it could not advise) it might be appropriate to consider applying to the tribunal to vary/terminate the management order. Following Urwick v Pickard [2019] UKUT 365 (LC) it appeared the purchaser may have taken the freehold title free of the management order but this may not have terminated the management order, particularly in view of the head lease.

5. On 30 August 2024, the Applicant made (in effect) an application for directions and/or termination. The Applicant understood that the [NAME] had insured the building, but had at that point been unable to communicate substantively with them. He noted that the Official Receiver had indicated that they may disclaim the head lease, but they have not yet done so. It appears there have since been discussions about potential purchase of the head lease from the Official Receiver.

6. On 10 September 2024, the tribunal gave case management directions, but these were set aside following a new application by the Applicant by letter dated 1 November 2024. The [NAME] and respondent, [RESPONDENT] (and [RESPONDENT]) had responded constructively to the earlier application, with a helpful statement of case and witness statement. They confirmed they have buildings insurance cover in place but they would otherwise like the Applicant to continue to manage the Property under the management order pending

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resolution of the position in relation to the head lease. The Applicant had responded helpfully in turn, by proposing to continue as manager on the terms described in his letter and it appeared the leaseholders essentially agreed. The Applicant confirmed that he was continuing his professional indemnity insurance cover and the Official Receiver still had not confirmed its position.

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Accordingly, the tribunal gave new directions on 26 November 2024. These treated the Applicant’s letter as an application under section 24(9) of the Act to vary the existing management order (instead of giving the directions he had previously been seeking). Since it appeared all active parties were keen to avoid the costs of a hearing, the directions noted the matters summarised above and proposed to decide on or after 3 February 2025 on paper, without a hearing, that the management order is continuing and to vary it essentially:

a. to confirm that the management order binds the Respondents, who must comply with it as varied;

b. so that [COMPANY] shall maintain appropriate buildings insurance cover and shall promptly send copies of the relevant policy documents and invoices to the Applicant so that he can seek to recover reasonable costs of insurance from leaseholders;

c. to prevent [COMPANY] from disposing of the freehold [if] the management order is continuing [unless] they have obtained a deed of covenant from the transferee to comply with it; and

d. to vary the management order so that it will continue until and terminate on 24 March 2026 (with the manager to then provide a report and closing accounts), with provision for any interested person to apply before then for earlier termination or for the order to be extended beyond that date.

8. The directions provided that if any party opposed this proposal, they must by 3 January 2025 send any representations and other documents (including any witness statement) they wish to rely upon, and send to the tribunal any request for a hearing. Otherwise, the tribunal would decide the matter on paper, without a hearing.

9. The solicitors for [COMPANY] initially responded arguing that there should not be any restrictions on sale, having been concerned by words in the directions which were typographical errors. They said they also trusted that management would be restricted to the flats. On 7 January 2025, I apologised for and corrected the typographical errors, as shown in square brackets above. I explained the standard provisions now in management orders to require a covenant from a purchaser to avoid the type of uncertainty which had

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been caused by the freehold sale in this case. I observed that there was no proposal to change the property covered by the existing management order, which appeared to apply to the five residential flats and common parts serving the same.

10. On 14 January 2025, the solicitors for the freeholders responded: “As the management order is terminating on the 24 March 2026 our clients are happy for the matter to be dealt with on paper to save costs based on the representations made to date on behalf of our clients and would request that there be no restrictions on our client’s title.”

11. I understand there were no other objections or proposals. Pursuant to the directions, the Applicant produced his electronic bundle for the determination, which included his draft management order. This was based on the current standard form of management order used by the tribunal, with the Applicant’s proposed amendments (to incorporate specific details and specific provisions from the existing management order, together with provision for [NAME] to insure) marked up. I understand there have been no comments on the draft.

12. I am satisfied that the 2013 management order is continuing (since that is not disputed), that variation of the order will not result in a recurrence of the circumstances which led to the order being made and that in the circumstances it is just and convenient to vary the order as set out in the accompanying management order. This largely follows the draft provided, but does not include some of the additional proposed wording because the substance of this is covered elsewhere in the template order.

13. I note that the [NAME] appears to be insuring and engaging constructively with the Applicant. I recognise that they would naturally prefer to have no restrictions in relation to their title. However, the interference is balanced by the termination date (subject to the protective extension provisions) in place of an indefinite order. It is merely procedural, requiring only a deed of covenant from the purchaser to comply with the order if they wish to dispose of the freehold while the management order is continuing. This is necessary to avoid the type of uncertainty caused by the sale of the freehold last year, or other potential problems.

14. Further, it will be open to [NAME] or any other interested person to apply to the tribunal for earlier termination or variation of the terms of the order.

15. For the avoidance of doubt, the extension provisions in the order should not be used lightly. The expectation is that the management order should terminate on 24 March 2026 unless there are very good/unforeseen reasons which mean an interested person has to apply to continue it temporarily. As has already been pointed out, the order is being continued and the specified date was proposed because it

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appears to allow sufficient time for matters in relation to the head lease to be resolved and/or for [NAME] and flat leaseholders to make appropriate arrangements for future management.

Judge David Wyatt

7 February 2025

Rights of appeal 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 person making the application. 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 making 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).

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2. Official Receiver 3. [NAME] [NAME] 4. [NAME] (Flat 1) 5. [NAME] (Flat 2) 6. [NAME] [NAME] (Flat 3) 7. [NAME] (Flat 4) 8. [NAME] [NAME] [NAME] & [NAME] (Flat 5) Tribunal members : Judge David Wyatt Date of Order : 7 February 2025

MANAGEMENT ORDER

Interpretation 1. In this Order:

the “Act” means the Landlord and Tenant Act 1987.

the “[NAME]” means [APPELLANT] or their successors in title to the reversion immediately expectant upon the Headlease.

the “Property” means the five residential flats, and the common parts serving the same, at 134 High Street, [NAME], Hertfordshire [POSTCODE].

the “Landlord” means [RESPONDENT] or their successors in title to the reversion immediately expectant upon the Leases.

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the “Headlease” means the head lease dated 26 May 1999 made between (1) [APPELLANT] [COMPANY] and (2) [COMPANY].

the “Tenants” shall mean the proprietors for the time being of the Leases whether as lessee or under-lessee and “Tenant” shall be construed accordingly.

the “Leases” shall mean all leases and/or underleases of flats in the Property.

the “Manager” means [NAME] (Open) FTPI AssocRICS.

the “2013 Order” means the management order dated 1 August 2013 appointing the Manager under section 24(1) of the Act as the manager of the Property (following the previous such order from 2011).

the “Tribunal” means the First-tier Tribunal (Property Chamber).

ORDER

2. The 2013 Order is continuing, as varied below with effect from the date of this Order. It is hereby varied to bind all of the Respondents, who must comply with it.

Variation to terminate appointment on 24 March 2026

3. Paragraph 7 of the 2013 Order is varied by deleting the words after “7. The Manager shall be appointed from the date of this Order” and substituting the words:

“and the Manager’s appointment shall end on 24 March 2026 (the “end date”).”

Variations of the management order terms 4. For ease of reference in future, the other paragraphs of the 2013 Order are replaced with the following provisions. These require [NAME] to continue to insure the relevant building(s), with provisions in case they fail to provide evidence of sufficient insurance, and follow specific provisions in the 2013 Order. Otherwise, they follow the current standard form of management order used by the Tribunal.

5. For the avoidance of doubt this Order supplements but does not displace covenants under the Leases and the Tenants remain bound by them. Where there is a conflict between the provisions of the Order and the Leases, the provisions of the Order take precedence.

6. The purpose of this Order is (and the purpose of the previous management orders was) to provide for the interim management of the

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Property in the continuing absence of the Landlord. The termination date above has been set because it appears to allow sufficient time for matters in relation to the Landlord/Headlease to be resolved and/or for [NAME] and Tenants to make appropriate arrangements for the future management of the Property.

7. The Manager shall manage the Property in accordance with: (a) the terms of this Order and the Directions set out below; (b) the respective obligations of the Landlord and the Tenants under the Leases (save where modified by this Order); (c) the obligations of the Landlord (and where appropriate [NAME]) under the Headlease; (d) the duties of a Manager set out in the Service Charge Residential Management Code (the “Code”) (3rd Edition) or such other replacement code published by the Royal Institution of Chartered Surveyors (“RICS”) and approved by the Secretary of State pursuant to section 87 Leasehold Reform Housing and Urban Development Act 1993(whether the Manager is a Member of the RICS or not; and (e) the provisions of sections 18 to 30 of the Landlord and Tenant Act 1985.

8. From the date of this Order, no other party shall be entitled to exercise a management function in respect of the Property where the same is the responsibility of the Manager under this Order.

9. The tribunal requires the Manager to act fairly and impartially in the performance of their functions under this Order and with the skill, care and diligence to be reasonably expected of a Manager experienced in carrying out work of a similar scope and complexity to that required for the performance of the said functions.

10. The Manager or any other interested person may apply to vary or discharge this Order pursuant to the provisions of section 24(9) of the Act.

11. The Tribunal may, upon receipt of information or notification of change of circumstances, issue directions to the parties, or any other interested person, concerning the operation of this Order, both during its term, and after its expiry.

12. Any application to extend or renew this Order must be made before the end date, preferably at least three months before that date, and supported by a brief report of the management of the Property during the period of the appointment. Where an application for an extension or renewal is made prior to the end date, then the Manager’s appointment will continue until that application has been finally determined.

13. The Manager is appointed to take all decisions about the management of the Property necessary to achieve the purposes of this Order. If the

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Manager is unable to decide what course to take, the Manager may apply to the Tribunal for further directions, in accordance with section 24(4) of the Act. Circumstances in which a request for such directions may be appropriate include, but are not limited to: (a) a serious or persistent failure by any party to comply with an obligation imposed by this Order; (b) circumstances where there are insufficient sums held by the Manager to discharge their obligations under this Order and/or for the parties to pay the Manager’s remuneration; and (c) where the Manager is in doubt as to the proper construction and meaning of this Order. Contracts 14. The Manager may place, supervise and administer contracts and check demands for payment and make payment(s) in respect of goods, services and equipment supplied for the benefit of the Property. Licences to assign, approvals and pre-contract enquiries 15. The Manager shall be responsible for carrying out those functions in the residential Leases concerning approvals and permissions, including those for sublettings, assignments, alterations and improvements, that the Leases provide should be carried out by the Landlord.

16. The Manager shall be responsible for responding to pre-contract enquiries regarding the sale of a residential flat at the Property. Legal Proceedings 17. The Manager may bring or defend any court or tribunal proceedings relating to management of the Property (whether contractual or tortious) and may make any arrangement or compromise on behalf of the Landlord in connection with the Headlease and, subject to the approval of the Tribunal, may continue to bring or defend proceedings relating to the appointment, after the end of their appointment.

18. Such entitlement includes bringing proceedings in respect of arrears of service charge and rent attributable to any of the Flats in the Property, including, where appropriate, proceedings before this tribunal under section 27A of the Landlord and Tenant Act 1985 and in respect of administration charges under schedule 11 of the Commonhold and Leasehold Reform Act 2002 or under section 168(4) of that Act or before the courts and shall further include any appeal against any decision made in any such proceedings.

19. The Manager may instruct solicitors, counsel, and other professionals in seeking to bring or defend legal proceedings and is entitled to be reimbursed from the service charge account in respect of costs, disbursements or VAT reasonably incurred in doing so during, or after, this appointment. If costs paid from the service charge are subsequently recovered from another party, those costs must be refunded to the service charge account.

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20. The Manager may rank and claim in the bankruptcy, insolvency, sequestration or liquidation of any Tenant owing sums of money under their Lease. Remuneration 21. The Tenants are responsible for payment of the Managers’ fees, which are payable under the provisions of this Order but may be collected under the service charge mechanisms of their Leases.

22. The sums payable are those set out in the Schedule to this Order. Ground rent and service charge 23. The Manager shall collect the ground rents payable under the residential Leases.

24. The Manager shall collect all service charges and insurance premium contributions payable under the Leases, in accordance with the terms and mechanisms in the Leases (including any arrears, the recovery of which shall be at the discretion of the Manager).

25. Whether or not the terms of any Lease so provides, the Manager shall have the authority to: (a) demand payments in advance and balancing payments at the end of the accounting year; (b) establish a sinking fund to meet the Landlord’s obligations under the Leases; (c) allocate credits of service charge due to Tenants at the end of the accounting year to the sinking fund; and (d) alter the accounting year and to collect arrears of service charge and insurance that have accrued before their appointment.

26. The Manager is entitled to instruct and recover through the service charge the reasonable cost and fees of any managing agents, surveyors, architects, solicitors, counsel, and other professional persons or firms, incurred by them whilst carrying out their functions under the Order. Administration Charges 27. The Manager may recover administration charges from [NAME] for their costs incurred in collecting ground rent, service charges and insurance which includes the costs of reminder letters, transfer of files to solicitors and letters before action. Such charges will be subject to legal requirements as set out in schedule 11 of the Commonhold and Leasehold Reform Act 2002. Disputes 28. In the event of a dispute regarding the payability of any sum payable under this Order by any Tenant, additional to those under the Leases (including as to the remuneration payable to the Manager and litigation costs incurred by the Manager), a Tenant, or the Manager, may apply to the Tribunal seeking a determination under section 27A of the

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Landlord and Tenant Act 1985 as to whether the sum in dispute is payable and, if so, in what amount.

29. In the event of a dispute regarding the payability of any sum payable under this Order by the [NAME], other than a payment under a Lease, the Manager or the Landlord or [NAME] may apply to the Tribunal seeking a determination as to whether the sum in dispute is payable and, if so, in what amount.

30. In the event of dispute regarding the conduct of the management of the Property by the Manager, any person interested may apply to the Tribunal to vary or discharge the Order in accordance with section 24(9) of the Landlord and Tenant Act 1987.

31. In the event of a dispute regarding the reimbursement of unexpended monies at the end of the Manager’s appointment, the Manager, a Tenant, or the Landlord may apply to the Tribunal for a determination as to what monies, if any, are payable, to whom, and in what amount.

DIRECTIONS TO LANDLORD AND [NAME]

32. The Landlord and [NAME] must comply with the terms of this Order.

33. On any disposition other than a charge of the Landlord’s estate in the Property, the Landlord must procure from the person to whom the Property is to be conveyed, a direct covenant with the Manager, that the said person will (a) comply with the terms of this Order; and (b) on any future disposition (other than a charge) procure a direct covenant in the same terms from the person to whom the Property is to be conveyed.

34. On any disposition other than a charge of [NAME]’s estate in the Property, [NAME] must procure from the person to whom the Property is to be conveyed, a direct covenant with the Manager, that the said person will (a) comply with the terms of this Order; and (b) on any future disposition (other than a charge) procure a direct covenant in the same terms from the person to whom the Property is to be conveyed.

35. The Landlord and [NAME] shall each give all reasonable assistance and co-operation to the Manager in pursuance of their functions, rights, duties and powers under this Order, and shall not interfere or attempt to interfere with the exercise of any of the Manager’s said rights, duties or powers except by due process of law.

36. The Landlord and [NAME] shall each allow the Manager and their employees and agents access to all parts of the Property and must provide keys, passwords, and any other documents or information necessary for the practical management of the Property in order that the Manager might conveniently perform their functions and duties, and exercise their powers under this Order.

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DIRECTIONS TO MANAGER 37. The Manager must adhere to the terms of this Order.

Entry of a Form L restriction - Landlord’s title

38. To protect the direction in paragraph 33 above, the Manager must apply to the Land Registry for the entry of the following restriction in the register of the Landlord’s estate under title number HD376604:

“No disposition of the registered estate (other than a charge) by the proprietor of the registered estate, or by the proprietor of any registered charge, not being a charge registered before the entry of this restriction, is to be completed by registration without a certificate signed by the applicant for registration or their conveyancer that the provisions of paragraph 33 of an Order of the Tribunal dated 7 February 2025 have been complied with.”

Entry of a Form L restriction - [NAME]’s title

39. To protect the direction in paragraph 34 above, the Manager must apply to the Land Registry for the entry of the following restriction in the register of [NAME]’s estate (registered in the name of [COMPANY]) under title number HD348423:

“No disposition of the registered estate (other than a charge) by the proprietor of the registered estate, or by the proprietor of any registered charge, not being a charge registered before the entry of this restriction, is to be completed by registration without a certificate signed by the applicant for registration or their conveyancer that the provisions of paragraph 34 of an Order of the Tribunal dated 7 February 2025 have been complied with.”

Registration 40. The Manager must make applications to HM Land Registry for entry of the restrictions referred to above, within 14 days of the date of this Order.

41. A copy of the Order should accompany the applications (unless it is submitted by a solicitor able to make the necessary declaration at Box 8(c) of the RX1 application form). The application should confirm that: • this is an Order made under the Landlord and Tenant Act 1987, Part II (Appointment of Managers by a Tribunal) and that pursuant to section 24(8) of the 1987 Act, 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 receiver or sequestrator of land; and

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• consequently, pursuant to Rule 93(s) of the Land Registration Rules 2003, the Manager is a person regarded as having sufficient interest to apply for a restriction in standard Form L or N. Conflicts of interest 42. The Manager must be astute to avoid any conflict of interest between their duties and obligations under this Order, and their contractual dealings. Where in doubt, the Manager should apply to the Tribunal for directions. Complaints 43. The Manager must operate a complaints procedure in accordance with, or substantially similar to, the requirements of the Royal Institution of Chartered Surveyors. Insurance 44. [NAME] must maintain appropriate buildings insurance for the Property (in the terms required by the Headlease) and ensure that the Manager’s interest is noted in the Property.

45. Within 14 days from the date of this Order (and within 14 days of a request from the Manager for copies of future documents) [NAME] must provide to the Manager all information reasonably requested by the Manager in respect of the insurance of the Property, including copies of all relevant policy documents and invoices. The Manager may collect contributions from the Tenants towards the relevant insurance costs and pay these to [NAME].

46. If [NAME] fails to comply with paragraph 45 above: a. the Manager shall take out and maintain appropriate buildings insurance for the Property (and if necessary the ground floor commercial parts in the building of which the Property forms part), making all necessary arrangements with the insurers/brokers to ensure cover will not be jeopardised by any insurance policy of [NAME], and ensure that the Manager’s interest is noted on the insurance policy; and b. to enable the Manager to comply with this paragraph, the Manager may collect advance and/or subsequent payments: i. from the Tenants to enable the Manager to procure such buildings insurance; and ii. if the Manager needs to procure insurance which includes the commercial parts, from [NAME] and/or, if [NAME] fails to pay promptly, from the occupiers for the time being of the commercial parts, for any proportion of the insurance costs which relates to the commercial parts.

47. Throughout the appointment, the Manager must ensure that he has appropriate professional indemnity insurance cover in the sum of at least £1 million and shall upon request provide copies of the certificate of liability insurance to the Tribunal and to any Tenant or the Landlord

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or [NAME]. The certificate should specifically state that it applies to the duties of a Tribunal appointed Manager. Accounts 48. The Manager shall deal separately with and shall distinguish between monies received pursuant to any reserve fund (whether under the provisions of the Leases (if any) or otherwise) and all other monies received pursuant to his appointment and shall keep in a separate bank account or accounts established for that purpose monies received on account of the reserve fund.

49. The Manager must: (a) prepare an annual service charge budget (consulting with the Tenants and other parties as appropriate); (b) prepare and submit to [NAME], the Landlord and the Tenants an annual statement of account detailing all monies receivable, received and expended; (c) maintain efficient records and books of account and to produce for these for inspection, to include receipts or other evidence of expenditure, upon request by the Landlord or a Tenant under section 22 of the Landlord and Tenant Act 1985; (d) maintain on trust in an interest-bearing account or accounts at such bank or building society as the Manager shall from time to time decide, into which ground rent, service charge contributions, insurance rent, and all other monies arising under the Leases shall be paid; (e) hold all monies collected in accordance with the provisions of the Code; and (f) deal with all enquiries, complaints and other correspondence from Tenants or other parties, or their representatives, about matters arising from the day to day financial management of the Property. Repairs and maintenance 50. The Manager must: (a) deal with all reasonable enquiries raised by Tenants in relation to repair or maintenance work and, where appropriate, liaise with [NAME]/Landlord in relation to matters which may concern them or for which they may be responsible; (b) carry out regular basic inspections (not less than once per year); (c) subject to receiving sufficient prior funds: (i) procure the carrying out of all required repair and maintenance required at the Property, in accordance with the Landlord’s covenants in the Leases, including instructing contractors to attend and rectify problems, and is entitled to

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recover the cost of doing so as service charge payable under the Leases or in accordance with the Order; (ii) where required, arrange and supervise any required major works to the Property, including preparing a specification of works and obtaining competitive tenders. (d) liaise with all relevant statutory bodies in the carrying out of their management functions under the Order; and (e) ensure that [NAME] (and the Landlord, if practicable) and the Tenants, are consulted on any planned and major works to the Property and to give proper regard to their views.

51. The Manager has the power to incur expenditure in respect of health and safety equipment reasonably required to comply with regulatory and statutory requirements. Records and reporting 52. The Manager must keep appropriate professional records in relation to the management of the Property, including any agreements entered into by the Manager and any changes in the Tenants or other parties.

53. By no later than six months from the date of this Order the Manager must prepare and submit a brief written report to the Tenants, and the Landlord, on the progress of the management of the Property up to that date, providing a copy to the Tribunal at the same time. End of appointment 54. No later than 56 days before the end date, the Manager must: (a) apply to the tribunal for directions as to the disposal of any unexpended monies; (b) include with that application a brief written report on the progress and outcome of the management of the Property up to that date (a “Final Report”); and (c) seek a direction from the tribunal as to the mechanism for determining any unresolved disputes arising from the Manager’s term of appointment (whether through court or tribunal proceedings or otherwise).

55. Unless the Tribunal directs otherwise the Manager must within six months of the end date: (a) prepare final closing accounts and send copies of the accounts and the Final Report to [NAME], Landlord and Tenants, who may raise queries on them within 14 days; and (b) answer any such queries within a further 28 days.

56. The Manager must reimburse any unexpended monies to the paying parties, or, if it be the case, to any new Tribunal appointed Manager within three months of the end date or, in the case of a dispute, as decided by the Tribunal upon an application by any interested party.

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Schedule - Manager’s fees

(1) The annual fee of £268.66 plus VAT per flat for performing the duties set out in paragraph 3.4 of the RICS Code (so far as applicable), including the general duties in this Order (with the exception of supervision of any major works). Such fee hourly rate may be subject to annual increase as provided for in paragraph (5) below.

(2) Fees for collecting ground rent of 10% (or up to 20%, if the relevant party agrees or the Tribunal determines this is reasonable) of the amount collected, plus VAT, to be split equally between the Manager and his appointed managing agent, if any.

(3) An additional reasonable charge may be made in relation to the arrangement and supervision of major works, if these are needed.

(4) An additional charge for dealing with solicitors enquiries on proposed transfer, or the further tasks set out in paragraph 3.5 of the RICS Code or any other appropriate tasks which fall outside the duties described above. This will be made on a time-spent basis (and in the case of solicitors enquiries on transfer will be payable by the [NAME]; the Manager should obtain an undertaking from their solicitors to pay such costs before carrying out such work) at the hourly rate of £250 plus VAT. Such hourly rate may be subject to annual increase as provided for in paragraph (5) below.

(5) Upon presenting the service charge budget for the next financial year and each subsequent financial year (if relevant) the Manager shall notify the Tenants of any changes to his management fees provided always that the increase for each financial year shall not exceed 5% of the previous management fee.

Judge David Wyatt

7 February 2025

Corrected by the Judge under Rule 50 as shown underlined/struck out in paragraphs (1) and (3) above, on 11 February 2025 with effect from 7 February 2025.