First-tier Tribunal Extends Management Order for Two Years

OUTCOME: Allowed

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference : LON/00AP/LVM/2021/0015

HMCTS code

(paper, video,

audio) : V: CVP REMOTE

Property : 32 [ADDRESS] [POSTCODE]

Applicant: [redacted]

Respondent: [redacted]

Type of application : Application for the variation of a management order

Tribunal members : Judge N [NAME] of Decision : 30 November 2021

DECISION

Covid-19 pandemic: description of hearing

This has been a remote video hearing which has been consented to by the parties. The form of remote hearing was V: CVP REMOTE. A face-to-face hearing was not held because it was not practicable. The documents that the Tribunal was referred to are in a digital Applicant’s bundle of 160 pages and in a digital Respondent’s bundle of 157 pages. The order made is described below.

Decisions of the Tribunal

(1) The management order dated 16 January 2020 shall continue until 9 October 2022.

(2) The case management decisions made by the Tribunal are set out in the body of this decision.

The application

1. The Applicant, Mr [APPELLANT], was appointed [APPELLANT] of 32 [ADDRESS] [POSTCODE] (“[NAME]”) by a decision of a differently constituted Tribunal dated 16 January 2020. This decision was made under case reference number LON/00AP/LAM/2019/0024.

2. The Respondent, Mrs [RESPONDENT], is the freehold owner of [NAME]. [NAME] is an Edwardian house which has been converted into six flats. Mr and Mrs [NAME] are the long leasehold owners of flats 5 and 6 at [NAME]. The Respondent is the long leasehold owner of the remaining flats which do not yet form part of the freehold.

3. The Tribunal was informed that the Respondent moved into one of the flats as her principal residence on 10 October 2021 and that she has taken or is taking steps to merge the long leases of the flats which are not let to Mr and Mrs [RESPONDENT] with the freehold. The flats in the Respondent’s ownership which she does not herself occupy are occupied by [NAME].

4. Mr [APPELLANT] seeks an order varying the management order dated 16 January 2020 pursuant to section 24(9) of the [RESPONDENT] and Tenant Act 1987 (“the 1987 Act”).

5. The management order runs for a period of 2 years from 1 March 2020. It is therefore due to expire on 28 February 2022. It is common ground that proposed major work to [NAME], including fire safety work, remains outstanding.

6. Directions were given by the Tribunal on 24 August 2021 and varied on 19 October 2021 (“the Directions”).

The hearing

7. A remote video hearing took place in this matter on 22 November 2021. Mr [APPELLANT] represented himself at the hearing. Mrs [APPELLANT] attended the hearing and was represented by Mr [COUNSEL] of Counsel. Mrs [COUNSEL] solicitor, Mr [COUNSEL], also attended the hearing as did Mr and Mrs [NAME].

8. The Tribunal heard oral evidence of fact from Mr [APPELLANT] and from [NAME].

9. Mr [APPELLANT] seeks a variation of the management order so as to require the Respondent’s [NAME] to pay their rent directly to him. He initially also sought a variation of the terms of management order concerning insurance but this proposed variation is no longer pursued. Further, in a letter dated 31 August 2021 and in his Statement of Case dated 24 September 2021, Mr [APPELLANT] seeks an extension of the Management Order, although this not set out in his application. The proposed period of the extension is 2 years.

10. At the commencement of the hearing, the Tribunal expressed the preliminary view that we would exercise our discretion to permit Mr [APPELLANT] to amend his application to include a proposed extension of the management order on the basis that if, during the course of the hearing, it became apparent that the Respondent would be prejudiced by the fact that the issue had not been raised until 31 August 2021, we would take any such prejudice into account. Mr [NAME] was content to proceed on this basis.

11. Mr and Mrs [NAME] asked if they could make representations at the hearing. There was no provision in the Tribunal’s Directions for them to participate and neither party had sought to call Mr and Mrs [NAME] as witnesses. The Tribunal is aware that Mr and Mrs [APPELLANT] support the application but it is for Mr [APPELLANT] to choose how to present his case. Mr [APPELLANT] is aware of his obligation to act impartially, in all the circumstances, we do not find it surprising that Mr [APPELLANT] did not call Mr and Mrs [APPELLANT] to give evidence against Mrs [APPELLANT]. On the Tribunal noting that this is Mr [APPELLANT]’s application, Mr [APPELLANT] withdrew Mr and Mrs [APPELLANT] request to participate.

12. During the course of the hearing, Mr [APPELLANT] referred to an issue concerning the installation of CCTV cameras at [NAME]. This matter is not before the Tribunal and the Tribunal’s jurisdiction is limited to determining the issues raised in Mr [APPELLANT]’s application (as amended to include the proposed extension of the management order).

The law

13. Section 24 of the 1987 Act includes provision that:

“24.— Appointment of manager by a tribunal

…

(9) The appropriate tribunal may, on the application of any person interested, 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 application 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.”

14. Section 21 of the 1987 Act includes provision that:

“21.— Tenant's right to apply to court for appointment of manager.

(1) The tenant of a flat contained in any premises to which this Part applies may, subject to the following provisions of this Part, apply to the appropriate tribunal for an order under section 24 appointing a manager to act in relation to those premises.

(2) Subject to subsection (3), this Part applies to premises consisting of the whole or part of a building if the building or part contains two or more flats.

(3) This Part does not apply to any such premises at a time when—

(a) the interest of the [RESPONDENT] in the premises is held by

(i) an exempt [RESPONDENT] or a resident [RESPONDENT], or

…

(3A) But this Part is not prevented from applying to any premises because the interest of the [RESPONDENT] in the premises is held by a resident [RESPONDENT] if at least one-half of the flats contained in the premises are held on long leases which are not tenancies to which Part 2 of the [RESPONDENT] and Tenant Act 1954 (c. 56) applies.”

The Tribunal’s determinations

Whether the Respondent’s [NAME] should be ordered to pay their rent directly to the Manager

15. Mr [APPELLANT] seeks this variation on the grounds that he has had difficulties obtaining funds from Mrs [APPELLANT]. Mrs [APPELLANT] states that Mr [APPELLANT] asked her to pay estimated service charges of £79,728.60 within eight days and that she then agreed to carry out gutter, sill and window repairs to [NAME] herself without requesting any contribution from Mr and Mrs [NAME].

16. There is a dispute between the parties concerning whether or not Mrs [APPELLANT] has sought to engage with Mr [APPELLANT] and it is not necessary for the purposes of this decision to set out every element of this dispute.

17. At the time of the January 2020 Tribunal hearing, Mrs [NAME] wished to manage [NAME] herself with the assistance of members of her family and, at paragraph 27 of the 2020 decision, the Tribunal stated in respect of Mr [APPELLANT]’s period of appointment:

“In this two year period it is hoped that Mrs [APPELLANT] can learn from Mr [APPELLANT] and be in a position to take over the management of [NAME] again at the expiration of the management agreement the details of which are annexed hereto.”

18. As a result of this statement, Mr [APPELLANT] viewed his role as that of a mentor for Mrs [APPELLANT], although there is in fact no requirement for him to act as a mentor in the Tribunal’s Schedule of Functions and Services which formally defines Mr [APPELLANT]’s role as Tribunal appointed Manager. Since the hearing of 8 January 2020, Mrs [NAME] has instructed solicitors to represent her. During the hearing before this Tribunal, Mr [APPELLANT] expressed the view that he would be better able to mentor Mrs [NAME] if she did not communicate with him via solicitors.

19. Mrs [COUNSEL] is entitled to instruct solicitors and/or counsel to represent her and it would be wrong to seek to discourage her from doing so. The “hope” which is recorded at paragraph 27 of the Decision dated 16 January 2020 that Mrs [APPELLANT] might learn from Mr [APPELLANT] was clearly expressed in the context of Mrs [APPELLANT] wishing to manage [NAME] without any professional assistance. Mrs [NAME] now accepts that she requires professional assistance and the Tribunal was informed that, if the management order comes to an end, she will instruct professional managing agents to manage [NAME].

20. There is no requirement in the management order for Mr [APPELLANT] to act as Mrs [APPELLANT] mentor and, now that Mrs [APPELLANT] is professionally represented, there is no need for Mr [APPELLANT] to attempt to do so. It is possible that, with the best of intentions, Mr [APPELLANT] has sought to take on a greater role than is necessary and that this has led to a degree of misunderstanding.

21. During the course of the hearing, Mrs [APPELLANT] agreed that she would pay Mr [APPELLANT] the sum of £7,000 by the end of January 2022 (in addition to the monies already paid by her) and Mr [APPELLANT] agreed that he would recover an equivalent sum from Mr and Mrs [NAME], in accordance with their service charge percentage. Mr [APPELLANT] stated that he believes that this application has “concentrated minds” and that, if Mrs [NAME] pays the agreed sum by the end of January and the [NAME] pay their share, he will be able to move forward constructively. The payment of £7,000 by Mrs [NAME] is, of course, without prejudice to her right to challenge the reasonableness and/or payability of any charges.

22. Mr [APPELLANT] informed the Tribunal that he had not considered in detail the obligations which stepping into the shoes of a [RESPONDENT] of the [NAME] may bring and that he does not yet have the approval of his insurers for this proposed variation of the management order. Mrs [NAME] gave evidence that she receives rent in the sum of approximately £3,365 per month from the [NAME] but that she also makes mortgage payments in the sum of £3,200. Further, the [NAME] are not party to this application and have not had the opportunity to make representations concerning the proposed variation.

23. In all the circumstances, we are not satisfied that it is just and convenient to vary the management order so as to require the Respondent’s [NAME] to pay their rent directly to Mr [APPELLANT].

The proposed two-year extension of the management order

24. As stated above, it is common ground that proposed major work to [NAME], including fire safety work, remains outstanding. During the course of the hearing, Mr [APPELLANT] and the Respondent’s representatives expressed a willingness to cooperate with each other going forward and Mr [APPELLANT] is now familiar with [NAME] and well placed to carry out the outstanding work.

25. It is also common ground that relations between Mrs [NAME] and Mr and Mrs [NAME] have entirely broken down. At paragraph 27 of her witness statement dated 29 October 2021, Mrs [NAME] states: “whenever the families meet in communal spaces, it feels as if there will be an incident where the police may need to be called.”

26. Mrs [NAME] intends to instruct a professional managing agent to manage [NAME] when the management order comes to an end and she has identified a managing agent who is willing to undertake this role. However, in the absence of a management order, the managing agent would be answerable to Mrs [NAME] rather than to the Tribunal and would not be subject to the same duties as Mr [APPELLANT].

27. Further, in the absence of a management order there would be no ongoing requirement for Mrs [NAME] to use the services of professionals although we accept that it is her present intention to do so.

28. In our view, the criteria set out in the 1987 Act are satisfied and it is, in all the circumstances, fair and just to extend the Management Order.

29. In her Statement of Case, the Respondent contends that:

“pursuant to section 21(3) of the [RESPONDENT] and Tenant Act 1987, the Tribunal’s jurisdiction under Part II of that Act expires 12 months from the date when the Respondent first began to occupy [NAME] as her principal residence, which was on 10 October 2021. The Tribunal’s jurisdiction therefore expires after 9 October 2022.”

30. We recognise that Mr and Mrs [NAME] are likely to have been unaware of this issue prior to the hearing (because the Respondent was not directed to serve her Statement of Case on them) and that they may wish to take independent legal advice and to make representations on this point.

Accordingly, we will extend the term of the management order to 9 October 2022 without making any determination on the issue of whether or not the Tribunal’s jurisdiction expires after 9 October 2022. Any interested party may apply for a further extension of the management order and should do so in good time for any extension to potentially be granted before 9 October 2022 when the management order is now due to expire.

Name: Judge N Hawkes Date: 30 November 2021

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 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, [NAME] 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).