Tenant Found Guilty of Breaching Lease Through Unauthorised Alterations

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference :

LON/00AG/LBC/2024/0033 Property : Flat 15 [APPELLANT], [ADDRESS] [POSTCODE] Applicant: [redacted] : [COUNSEL] [NAME], Counsel Respondent : [redacted] : Mr [COUNSEL], Director Type of application : Application for a determination in respect of an alleged breach of covenant pursuant to section 168(4) Commonhold and Leasehold Reform Act 2002 Tribunal Members : Judge D [NAME], FCIEH CEnvH M.Sc Date and venue of hearing : 25 November 2024 at 10 [ADDRESS] [POSTCODE] Date of decision : 5 December 2024

DECISION

2 Decision of the Tribunal

• The Tribunal has determined that the Respondent is in breach of Clause 2(13) of the lease for Flat 15 [APPELLANT], [ADDRESS] [POSTCODE].

• The Respondent is ordered to repay the application fee in the sum of £110 within 28 days of the date of this decision

_________________________________________________ The Application 1. An application dated 26 June 2024 was received by the Tribunal under section 168(4) of the Commonhold and Leasehold Reform Act (“CLARA”) for a determination as to whether there has been a breach of covenant under the terms of the lease granted in relation to Flat 15 [APPELLANT], [ADDRESS] [POSTCODE] (“the property”).

2. The property is a third floor one-bedroom flat in a small block over lower ground, ground and three upper floors with a split level between the front and rear of the property. The flat is the top flat located directly below a flat roof. The block contains 15 one-bedroom flats.

3. [APPELLANT] (“the applicant”) hold the freehold interest in the property under title number LN210475.

4. [RESPONDENT] (“the respondent”) holds the leasehold interest of the property under title number NGL787549 and was registered on the [NAME] as of 26/08/2022. The property was demised by a lease dated 3 November 1970 for a term of 99 years commencing on 25 December 1969 (“the existing lease”). By a lease dated 19 June 2000 made between (1) [APPELLANT] and (2) [NAME], the existing lease was surrendered and the property was demised to [NAME] for a term of 999 years from 25 December 1969 (“the new lease”). By clause 3.3 of the new Lease, it was made upon the same terms and subject to the same covenants as those contained in the existing lease.

5. On 17 July 2024 the Tribunal issued Directions.

6. The Tribunal had the benefit of the applicant’s bundle of 185 electronic pages together with a response to the respondent dated 24 October 2024 and the respondent’s bundle of 26 pages.

3 The Tribunal also had the benefit of the applicant’s skeleton argument and authorities. Reference to any document in the applicant’s bundle will appear as [A/electronic page number] or in the respondent’s bundle as [R/electronic page number].

7. An inspection was not considered necessary as the parties had provided all the evidence upon which they wished to rely.

The Lease 8. The relevant clause relied upon in the application is: Clause 2(13) “Not at any time without the licence in writing of the Lessor obtained or except in accordance with plans and specifications previously submitted in triplicate to the Lessor and approval by the Lessor and to their reasonable satisfaction to make any alteration or addition whatsoever in or to the flat either externally or internally or to make any alteration or aperture in the plan external construction height walls timbers elevations or architectural appearance thereof nor to cut or remove the main timbers or walls of the flat unless for the purpose of repairing and making good any defect therein or to do or suffer in or upon the flat any wilful or voluntary waste or spoil” [A/49]. The particulars of alleged breach 9. It is alleged that the respondent made alterations to the property without seeking or obtaining the applicant’s consent; namely, the installation of a fully operational kitchen in the original living room, the change of use of the original kitchen to a bedroom and the creation of a hole in the rear wall of the property

10. The applicant submits that the alteration came to light following reports of water ingress into flat 11, which is directly below the property. The applicant then instructed [APPELLANT] to inspect Flat 11 and the property. Inspections were carried out on 9 December 2022 to flat 11, and on 18 January 2023 to both flat 11 and the property when the respondent granted access for an inspection.

11. Mr [RESPONDENT] report, dated 13 March 2023 (“the report”), found that the kitchen had been relocated into the living room and the original kitchen had become a bedroom. The report states:

4 2.1.3 We suspect the dripping maybe caused by the washing machine of (sic) sink and would recommend that these are inspected and repaired in the first instance and then the leaseholder requests a licence to alter the premises or put it back to the original configuration. Including making good any of the structure affected by the works.

2.2.4 The flat has been altered with the kitchen now a bedroom and the kitchen in the living room, the relocation of the kitchen may also be adding to the moisture in the room from cooking and washing. 2.2.5 We inspected the roof and found repairs had been undertaken in the past, however, we do not believe the roof is leaking and causing the damp staining.

3.1.2 Flat 11 leak we suspect is from unlicensed plumbing works in Flat 15. In the first instance the service should be checked for any leaks or damage which is causing the leak into the floor below [A/116]

12. Even if the respondent has now put the kitchen back into the original space, there is no evidence of it being to an acceptable standard, with the plumbing being of particular concern.

13. It is further submitted that even if the kitchen has been moved back, the question for the Tribunal is whether a breach has occurred. [NAME] v [NAME] [2021[ UKUT 288 (LC) at [36]. The respondent’s opposition to the application

14. The respondent denies that he breached clause 2(13) of the lease at all, and further relies on the wording of clause 2(13) to the effect that alterations are not permitted “unless for the purpose of repairing and making good any defect therein” and that he is entitled under the terms of that clause to remedy the defects caused by what he says are a leak from the flat roof.

15. The respondent denies moving the kitchen to the living room or creating a new bedroom in the original kitchen space, or cutting holes in the walls. He submits that the leak on the flat roof above the property was so severe that it caused water to be pouring through the ceiling onto the floor and caused the ceiling in the kitchen to collapse damaging kitchen equipment. However, he also confirms that “it was necessary to put in a temporary kitchen elsewhere” [paragraph 13, R/5].

16. The respondent’s case is that he had a tenant in the property and when the original kitchen was unusable, he installed a second- hand kitchen into the living room while the original kitchen was

5 drying out from the leak. He “connected the cooker in the living room as there were no cooking facilities in the kitchen. The ‘new’ sink and washing machine were not plumbed in and the tenant continued to use the sink in the kitchen” [paragraph 8, R/4]

17. The respondent’s case is also that “I never breached any covenant in the lease. I never moved the kitchen. The kitchen was always there as a kitchen and was only removed due to damage caused by the leak from the ceiling” [paragraph 16 R/5]

18. On 10 November 2023 the respondent wrote to the applicant denying the allegation stating “I have made no structural changes or taking walls or adding walls to the property the room where the sink was situated was very small and changes done accordingly the small area is now a storage room not a bedroom [A/179]”

19. Finally, the respondent seeks to rely on his assertion that he has put the kitchen units and white goods back into the original kitchen. He relies on a photograph to demonstrate this assertion. He advised the applicant of this reinstatement in October 2024. The Hearing

20. The applicant was represented by [COUNSEL] [NAME] of counsel. No one from the applicant company were available to attend the hearing with her and in the absence of any oral evidence at the hearing, the applicant relied on documentary evidence and the legal submissions made on its behalf. The respondent was represented by Mr [RESPONDENT], the director of the respondent company.

21. The report relied upon by the applicant is not an expert report, no permission having been sought or granted in this regard. The Tribunal accepted that the report provided background and photographic evidence.

22. The respondent challenges the report on the basis that it is biased towards the applicant’s case. The respondent does not challenge the photographs contained in the report. He provides no evidence to support his position that the leak into the original kitchen was so severe that it had to be left for 2 months to dry out before moving the kitchen back into its original space.

6 23. In oral evidence Mr [NAME] was asked about the photographs showing what appears to be a fully fitted kitchen in the living room [A/70]. The photographs show an L-shaped work surface above base units, a washing machine, a hob and oven. The work surface area has a sink inset into it, with taps, and cutting boards resting against the taps. There are 2 wall mounted cupboard units on either side of an extractor fan attached to the wall above the hob. The photographs also show a tiled area on the wall around the top of the work surface. The tile coverage is around 18 inches high from the work surface, running along the length of the L-shaped kitchen. Electric cooker sockets have been installed above the height of the work surface and an additional 4 electric sockets at that height appear in the photographs. A kettle is plugged into one of the sockets, and another appliance is plugged into another socket. Mr [NAME] confirmed he had had the electrical cooker socket installed at the time the kitchen was put together in the living room, and he had his electrician test it for safety some days later. He denied that the other sockets had been installed by him, stating that there had already been sockets installed at work surface level in a room used as a living room.

24. Mr [NAME] initially told the Tribunal that he had purchased the kitchen from someone he knew in Nottingham. That person had transported the kitchen in pieces to the flat and when he arrived he carried up all the panels and parts of the kitchen up 3 flights of stairs. A few small items had been carried up in the lift, but the majority of the dismantled pieces had been carried up the stairs by the seller of the kitchen, Mr [APPELLANT] and Mr [APPELLANT] tenant who was at the time living in the property. However, despite the clear appearance in the undisputed photographs of a fully installed kitchen, Mr [NAME] said it was only there to be stored and no cupboards were attached to the walls. He also denied that the tiles on the wall were ceramic, despite their appearance. His oral evidence was that they were sticky back plastic.

25. It was put to him that the wall cupboards and extractor fan were clearly attached to the walls, which he was then forced to accept.

26. He denied that the sink or washing machine were plumbed in, contrary to the surveyor’s report which suggested the plumbing works in the property may be the cause for the leak into flat 11 [A/116]. Contrary to what the photographs depicted, Mr [NAME] asserted that the sink in the living room was not plumbed in and that the tenant at the property had to get the water from the sink in the original kitchen and carry it to the new kitchen in the living room.

7 27. Mr [NAME] was asked why, if indeed he was just storing the kitchen in the flat, he had it put together to look as if it was fully fitted. His response was somewhat inconsistent. He stated the units had been sold to him already constructed and were just put into the living room as they were. This contradicted his earlier statement that they had carried the parts of the kitchen upstairs and spent some 3 hours putting it all together. He was asked why his tenant, who was contracted to pay £1,250 pcm for the use of the flat, would tolerate the storage of an unusable kitchen in the space. In his response Mr [APPELLANT] claimed that he had compensated the tenant with £2,000 and that the tenant then moved out.

28. In oral evidence Mr [APPELLANT] asked the Tribunal to accept that the only reason the kitchen had been moved to the living room was because of a leak from the flat roof above the flat which caused such severe damage to the kitchen that it had to dry out for several months. The only evidence produced to support that assertion were:

(i) a video which he said demonstrated water pouring from the ceiling onto the property floor, which in fact only showed condensation on the ceiling. Mr [NAME] confirmed that the video was taken in the living room. No water pouring down from the ceiling could be seen in the video. (ii) Photographs of various ceilings showed condensation. None of the photographs are dated or timed, nor is there a description on the photograph as to the location of that particular ceiling. None of the photographs show anything in the room other than the ceiling. Mr [NAME] after some consideration told the Tribunal that the photo [R12] was taken of the ceiling in the original bedroom, the photo [R13] was taken of the ceiling in the living room, and the photo [R14] was of a TV mounted on the wall in the living room. The photo [R15] was of the ceiling in the original kitchen.

29. Mr [NAME] asked the Tribunal to note that the new kitchen has now been relocated from the living room to the original kitchen as depicted in photographs [R/17-18] and he confirmed that one of the units had to be discarded as the room was too small to accommodate all of the units purchased and put into the living room originally.

8 30. Mr [NAME] asked the Tribunal to accept the email from Management Company dated 7 November 2022 as evidence of the severe leak into the property from the flat roof. That email states “Further to your call to our out of hours line today, I can confirm that we have spoken to the [NAME] that attended over the weekend. He has advised that the gutters were cleared and you may need to wait another 1-2 days for the residual water to dry out. Please monitor and if it doesn’t stop then let us know” [ R/8].

31. He was asked whether he had contacted them again further to that email. He initially said no he had not, and that the leak had stopped after that intervention. However, he then sought to admit late evidence in the form of piece of paper which he said was from a [NAME]. The respondent’s counsel opposed the application for admission of late evidence that her client had had no opportunity to consider and suggested that she would need to seek instructions if it were admitted. It was submitted that Mr [NAME] had received legal assistance to prepare his bundle which contained documents to support his case, and it was difficult to understand why he now sought to admit evidence during the hearing and why it had not been included in his bundle of evidence.

32. Having considered the submissions on this issue, the Tribunal determined that admission of late evidence at this stage would require an adjournment to allow the applicant’s counsel to seek instructions. That would be disproportionate given the evidence already available to the Tribunal and the application to admit late evidence was refused.

Findings 33. The respondent has breached clause 2(13) by installing a functional kitchen into the living room at the property without seeking or obtaining permission from the applicant.

34. The kitchen that appears in the photographs taken by the surveyor on 18 January 2023 shows what appears to be a fully functioning kitchen that had been installed and attached to the walls. In addition to the hob and the cooker points that Mr [NAME] admitted were installed and attached to the living room walls, the Tribunal found that on balance the sink had been plumbed in and was functional and there were ceramic tiles adhered to the walls.

35. The Tribunal found that on balance there would be no reason for someone to install a ‘show kitchen’ into a flat with a tenant in situ. The only reason for installing the kitchen which appeared

9 from the photographs to be fully attached to the walls and functional, with signs of use around the sink, is that it was fully functional. At no time did the respondent seek permission from the applicant for this alteration.

36. The Tribunal do not accept the respondent’s argument that he was permitted by Clause 2(13) to remedy a defect. For that argument to have any chance of success, the remedial works would have had to occur in the original kitchen, not in the living room.

37. While there may have been some dampness caused from the blocked gutters on the flat roof, the leak claimed by the respondent was exaggerated. There was no evidence to support the requirement to leave the original kitchen to dry out for 2 months.

38. The allegation of a hole having been cut through the outside wall of the property was not made out.

39. For all the above reasons, the Tribunal finds the respondent breached Clause 2(13) by making an alteration and addition to the living room by installation of a functioning kitchen.

Application for a costs order under Rule 13 40. The applicant seeks an order for costs on the basis that the respondent has acted unreasonably by:

(i) Failing throughout to acknowledge the breach of covenant (ii) Failing to inform the applicant until October 2024 that the kitchen installed in the living area had been moved back to the original kitchen (iii) Leaving the applicant no alternative but to pursue this claim in the Tribunal.

41. In response the respondent argued that he had received many telephone calls from the applicant’s solicitor, that he had asked the solicitor to come and inspect, that the solicitor for the applicant had wasted lots of time and money with his phone calls and failure to inspect the property, and that the applicant’s solicitor had just wanted to increase costs unnecessarily.

10 42. The respondent remains adamant that he has not breached any covenant.

Determination on costs and reasons 43. The Tribunal has to consider the test in [ADDRESS] (1985) [COMPANY] v Alexander [2016] 0290 UKUT (LC) in assessing whether a costs order under Rule 13 should be made.

44. The first stage is to consider whether the respondent has acted unreasonably. This is a high bar. The tribunal found that the respondent was unwise in the manner in which he defended the proceedings. On the one hand acknowledging at the very least that he had installed a working cooker into the living room for use by the tenant, and on the other hand that this did not constitute a breach of covenant.

45. The respondent has made an attempt to remedy the breach by putting the kitchen back to the original kitchen area, albeit leaving it rather late to inform the applicant of this action which again was rather an unwise decision on his behalf. However, an unwise defence or decision-making process does not necessarily constitute unreasonable behaviour. The respondent appears to believe that he did not breach the covenant and the Tribunal determined that the high bar of unreasonable behaviour is not met. There is therefore no need to move on to the next stages of the test.

46. The sum of £110 for the application fee is recoverable by the applicant. The hearing fee was not sought in the schedule of costs and therefore not claimed at the hearing. The Tribunal’s Determination 47. The Tribunal finds that the respondent has breached clause 2(13) of the lease.

48. The respondent is ordered to repay the application fee in the sum of £110 within 28 days of this decision

Tribunal Judge Brandler

5 December 2024

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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 should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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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Appendix of Relevant Legislation Commonhold and Leasehold Reform Act 2002 Section 168 - No forfeiture notice before determination of breach (1) A landlord under a long lease of a dwelling may not serve a notice under section 146(1) of the Law of Property Act 1925 (c. 20) (restriction on forfeiture) in respect of a breach by a tenant of a covenant or condition in the lease unless subsection (2) is satisfied. (2) This subsection is satisfied if— (a) it has been finally determined on an application under subsection (4) that the breach has occurred, (b) the tenant has admitted the breach, or (c) a court in any proceedings, or an arbitral tribunal in proceedings pursuant to a post-dispute arbitration agreement, has finally determined that the breach has occurred. (3) But a notice may not be served by virtue of subsection (2)(a) or (c) until after the end of the period of 14 days beginning with the day after that on which the final determination is made. (4) A landlord under a long lease of a dwelling may make an application to [the appropriate tribunal]1 for a determination that a breach of a covenant or condition in the lease has occurred. (5) But a landlord may not make an application under subsection (4) in respect of a matter which— (a) has been, or is to be, referred to arbitration pursuant to a post- dispute arbitration agreement to which the tenant is a party, (b) has been the subject of determination by a court, or (c) has been the subject of determination by an arbitral tribunal pursuant to a postdispute arbitration agreement. (6) For the purposes of subsection (4), “appropriate tribunal” means— (a) in relation to a dwelling in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; and (b) in relation to a dwelling in Wales, a leasehold valuation tribunal.

Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013/1169 Rule 13.— Orders for costs, reimbursement of fees and interest on costs (1) The Tribunal may make an order in respect of costs only—

13 (a) under section 29(4) of the 2007 Act (wasted costs) and the costs incurred in applying for such costs; (b) if a person has acted unreasonably in bringing, defending or conducting proceedings in— (i) an agricultural land and drainage case, (ii) a residential property case, (iii) a leasehold case, (iv) a tenant fees case; or (c) in a land registration case. (2) The Tribunal may make an order requiring a party to reimburse to any other party the whole or part of the amount of any fee paid by the other party which has not been remitted by the Lord Chancellor. (3) The Tribunal may make an order under this rule on an application or on its own initiative. (4) A person making an application for an order for costs— (a) must, unless the application is made orally at a hearing, send or deliver an application to the Tribunal and to the person against whom the order is sought to be made; and (b) may send or deliver together with the application a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal. (5) An application for an order for costs may be made at any time during the proceedings but must be made within 28 days after the date on which the Tribunal sends— (a) a decision notice recording the decision which finally disposes of all issues in the proceedings; or (b) notice of consent to a withdrawal under rule 22 (withdrawal) which ends the proceedings. (6) The Tribunal may not make an order for costs against a person (the “[NAME]”) without first giving that person an opportunity to make representations. (7) The amount of costs to be paid under an order under this rule may be determined by— (a) summary assessment by the Tribunal; (b) agreement of a specified sum by the [NAME] and the person entitled to receive the costs (the “[NAME]”); (c) detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by the [NAME] by the Tribunal or, if it so directs, on an application to a county court; and such assessment is to be on the standard basis or, if specified in the costs order, on the indemnity basis. (8) The Civil Procedure Rules 1998, section 74 (interest on judgment debts, etc) of the County Courts Act 1984 and the County Court (Interest on Judgment Debts) Order 1991 shall apply, with necessary modifications, to a detailed assessment carried out under paragraph (7)(c) as if the proceedings in the Tribunal had been proceedings in a court to which the Civil Procedure Rules 1998 apply.

14 (9) The Tribunal may order an amount to be paid on account before the costs or expenses are assessed.