First-tier Tribunal Issues Management Order for London Property

OUTCOME: Allowed

1

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME])

Case Reference : LON/00BE/LAM/2023/0008 [NAME] : 338-344 [ADDRESS] [POSTCODE] Applicants : [redacted] : [COUNSEL] LLP Respondent : [redacted] : [COUNSEL] [COMPANY] The Manager : [COUNSEL] of [COMPANY] [NAME] Tribunal members : Judge [NAME] of Order : 14th May 2024

Management Order

1 INTERPRETATION In this Order: The [NAME] means the flats and other premises known as known as and registered at HM Land Registry under title number TGL13322 and shall include the building, amenity space, passages, bin- stores, common parts, storage rooms basements, electricity and power rooms; and all other parts of the [NAME]. The Landlord shall mean Mr [RESPONDENT] or their successors in title to the reversion immediately expectant upon the Leases.

2 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 and commercial units in the [NAME]. The Manager means [NAME] of [NAME] The Tribunal

means the First-tier Tribunal ([NAME] Chamber)

ORDER 2 With the consent of the Respondent to such appointment and in accordance with section 24(1) of the Landlord and Tenant Act 1987 ("the Act") [APPELLANT] of [NAME] is appointed as Manager of the [NAME]. 3 The Manager’s appointment shall start on 14th May 2024 ("the start date") and shall end on 13th May 2026 ("the end date"). 4 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. 5 The purpose of this Management Order is to provide for the management of the [NAME]: 5.1 to ensure the [NAME] is validly and currently insured; 5.2 to ensure the provision of electricity and lighting to the common areas of the [NAME]; and 5.3 to provide valid and substantiated service charge demands; and 5.4 to provide valid ground rent demands. 6 The Manager shall manage the [NAME] in accordance with: 6.1 the terms of this Order and the Directions set out below;

3 6.2 the respective obligations of the Landlord and the Tenants under the Leases whereby the [NAME] is demised by the Landlord (save where modified by this Order); 6.3 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 6.4 the provisions of sections 18 to 30 of the Landlord and Tenant Act 1985. 7 From the date this Order comes into effect, no other party shall be entitled to exercise a management function in respect of the [NAME] where the same is the responsibility of the Manager under this Order. 8 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. 9 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. 10 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 [NAME] 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. 11 The Tribunal may, upon application with supporting evidence, issue directions to the parties, or any other interested person, concerning the operation of this Order, both during its term, and after expiry. 12 The Manager is appointed to take all decisions about the management of the [NAME] necessary to achieve the purposes of this Order. If the 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), Landlord and Tenant Act 1987. Circumstances in which a request for such directions may be appropriate include, but are not limited to:

4 12.1 a serious or persistent failure by any party to comply with an obligation imposed by this Order; 12.2 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 12.3 where the Manager is in doubt as to the proper construction and meaning of this Order. Contracts 13 Rights and liabilities arising under contracts, including any contract of insurance and/or any contract for the provision of any services to the [NAME], to which the Manager is not a party, but which are relevant to the management of the [NAME], shall upon the date of appointment become rights and liabilities of the Manager, save that: 13.1 the Landlord shall indemnify the Manager for any liabilities arising before commencement of this Order; and 13.2 the Manager has the right to decide, in their absolute discretion, the contracts in respect of which they will assume such rights and liabilities, with such decision to be communicated in writing to the relevant parties within 56 days from the date this order. 14 The Manager may place, supervise and administer contracts and check demands for payment of goods, services and equipment supplied for the benefit of the [NAME]. 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 [NAME]. Legal Proceedings 17 The Manager may bring or defend any court or Tribunal proceedings relating to management of the [NAME] (whether contractual or tortious) and, subject

5 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 [NAME], 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. Remuneration 20 The Tenants are responsible for payment of the Managers’ fees (including VAT), which are payable under the provisions of this Order but which may be collected under the service charge mechanisms of their Leases. The sums payable are: (a) an annual fee of £300.00 per flat or commercial unit for performing the duties set out in paragraph 3.4 of the RICS Code (so far as applicable); (b) 12.5% of the costs of any works carried out pursuant to or in accordance with s.20 of the Landlord and Tenant Act 1985. (c) any additional fees for the duties set out in paragraph 3.5 of the RICS Code (so far as applicable); and (d) VAT on the above fees. Ground Rent and Service charge 21 The Manager shall collect the ground rents payable under the residential Leases from the date of appointment. 22 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 from the date of appointment.

6 23 Whether or not the terms of any Lease so provides, the Manager shall have the authority to: 23.1 demand payments in advance and balancing payments at the end of the accounting year; 23.2 allocate credits of service charge due to Tenants at the end of the accounting year to the sinking fund; and 23.3 alter the accounting year and to collect arrears of service charge and insurance that have accrued before their appointment. 24 The Manager is entitled to recover through the service charge the reasonable cost and fees of any surveyors, architects, solicitors, counsel, and other professional persons or firms, incurred by them whilst carrying out their functions under the Order. Administration Charges 25 The Manager may recover administration charges from individual Tenants 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. The Details of the fees charged are set out in the Appendix of additional fees. Disputes 26 In the event of a dispute regarding the payability of any sum payable under this Order by the lessees, 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 Landlord and Tenant Act 1985 as to whether the sum in dispute is payable and, if so, in what amount. 27 In the event of a dispute regarding the payability of any sum payable under this Order by the landlord, other than a payment under a Lease, the Manager or the Landlord may apply to the Tribunal seeking a determination as to whether the sum in dispute is payable and, if so, in what amount. 28 In the event of dispute regarding the conduct of the management of the [NAME] 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.

7 29 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 the Landlord 30 The Landlord must comply with the terms of this Order. 31 On any disposition other than a charge of the Landlord’s estate in the [NAME], the Landlord will procure from the person to whom the [NAME] 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 [NAME] is to be conveyed. 32 The Landlord shall 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. 33 The Landlord is to allow the Manager and their employees and agents access to all parts of the [NAME] and must provide keys, passwords, and any other documents or information necessary for the practical management of the [NAME] in order that the Manager might conveniently perform their functions and duties, and exercise their powers under this Order. 34 Within 28 days from the date of this Order the Landlord must provide all necessary information to the Manager to provide for an orderly transfer of responsibilities, to include the transfer of: 34.1 all accounts, books and records relating to the [NAME], including a complete record of all unpaid service charges; and 34.2 all funds relating to the [NAME] including uncommitted service charges and any monies standing to the credit of a reserve or sinking fund. Directions to Manager 35 The Manager must adhere to the terms of the Order above. Entry of a Form L restriction in the Register of the Landlord’s Registered Estate

8 36 To protect the direction in paragraph 31 for procurement by the Landlord, of a direct covenant with the Manager, the Manager must apply for the entry of the following restriction in the register of the Landlord’s estate under title no TGL13322: “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 31 of an Order of the Tribunal dated 3 May 2024 have been complied with.” Registration 37 The Manager must make an application to HM Land Registry for entry of the restriction referred to in paragraph 36, within 14 days of the date of this Order. A copy of the Order should accompany the application (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. • 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 38 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 39 The Manager must operate a complaints procedure in accordance with, or substantially similar to, the requirements of the Royal Institution of Chartered Surveyors.

9 Insurance 40 The Manager must maintain appropriate building insurance for the [NAME] and ensure that the Manager’s interest is noted on the insurance policy. 41 From the date of appointment, and throughout the appointment, the Manager must ensure that he/she has appropriate professional indemnity insurance cover in the sum of at least £2 million and shall provide copies of the certificate of liability insurance to the Tribunal, and, upon request, to any Tenant or the Landlord. The Certificate should specifically state that it applies to the duties of a Tribunal appointed Manager. Accounts 42 The Manager must: 42.1 prepare and submit to the Landlord and the Tenants an annual statement of account detailing all monies receivable, received and expended. The accounts are to be certified by the external auditor, if required under the Leases; 42.2 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 Landlord and Tenant Act 1985; 42.3 maintain on trust in an interest-bearing account 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; and 42.4 hold all monies collected in accordance with the provisions of the Code. Repairs and maintenance 43 The Manager must: 43.1 by 6th August 2024 draw up a planned maintenance programme for the period of the appointment, allowing for the periodic re-decoration and repair of the exterior and interior common parts of the [NAME], as well as any roads, accessways, mechanical, electrical and other installations serving the [NAME], and shall send a copy to every Tenant and to the Landlord; 43.2 subject to receiving sufficient prior funds: 43.2.1 carry out all required repair and maintenance required at the [NAME], in accordance with the Landlord’s covenants in the Leases, including

10 instructing contractors to attend and rectify problems, and is entitled to recover the cost of doing so as service charge payable under the Leases or in accordance with the Order. 43.2.2 arrange and supervise any required major works to the [NAME], including preparing a specification of works and obtaining competitive tenders. 43.3 liaise with all relevant statutory bodies in the carrying out of their management functions under the Order; and 43.4 ensure that the Landlord, and the Tenants, are consulted on any planned and major works to the [NAME] and to give proper regard to their views. 44 The Manager has the power to incur expenditure in respect of health and safety equipment reasonably required to comply with regulatory and statutory requirements. Reporting 45 By no later than six months from the date of appointment (and then annually) the Manager must prepare and submit a brief written report to the Tenants, and the Landlord, on the progress of the management of the [NAME] up to that date, providing a copy to the Tribunal at the same time. End of Appointment 46 No later than 56 days before the end date, the Manager must: 46.1 apply to the Tribunal for directions as to the disposal of any unexpended monies; 46.2 include with that application a brief written report on the progress and outcome of the management of the [NAME] up to that date (a "Final Report"); and 46.3 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). 47 Unless the Tribunal directs otherwise the Manager must within two months of the end date:

11 47.1 prepare final closing accounts and send copies of the accounts and the Final Report to the Landlord and Tenants, who may raise queries on them within 14 days; and 47.2 answer any such queries within a further 14 days. 48 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.