Tenant Found in Breach of Lease Terms by First-tier Tribunal

OUTCOME: Allowed

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

LON/00AP/LBC/2021/0018 HMCTS code :

V: CVPREMOTE Property : [ADDRESS] [POSTCODE] Applicant: [redacted]

[NAME] : [COUNSEL] of Counsel Respondent : [redacted] : - Type of application : Application for a determination in respect of an alleged breach of covenant – section 168(4) of the Commonhold and Leasehold Reform Act 2002 Tribunal Members : Judge D Brandler Mr K Ridgeway MRICS Venue : 10 [ADDRESS] [POSTCODE] Date of hearing : 24th June 2021 Date of decision : 25th June 2021

DECISION

Covid-19 pandemic: description of hearing

2 This has been a remote video hearing which has been consented to by the parties. The form of remote hearing was V:CVPREMOTE. A face-to-face hearing was not held because it was not practicable and all issues could be determined in a remote hearing. The documents that we were referred to are in a bundle of documents produced by the applicant. The applicants’ bundle of 219 pages, referred to in this decision, the contents of which we have noted. The order made is described below.

Decision of the Tribunal

The Tribunal has determined that the Respondent is in breach of the following terms of the lease of the subject property:-

Clauses 3(a), 4(a), 4(c), 4(e), and paragraphs 4(b), 4(i) of the Fourth Schedule

The Tribunal makes no order under section 20C of the Landlord and Tenant Act 198 and no order under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

The Tribunal makes no order for costs. _________________________________________________ The Application 1. An Application dated 1st March 2021 was received by the Tribunal pursuant to section 168(4) of the Commonhold and Leasehold Reform Act (“The Act”) for a determination as to whether there has been a breach of covenant under the terms of the lease granted for the [ADDRESS] [POSTCODE] (“the flat”)

2. The flat is described as a basement flat in a converted terraced house (“the building”).

3. The Applicant holds the freehold interest of the building under title number MX312904.

4. The Respondent holds a long leasehold interest of the flat under title number NGL482326. The lease is dated 14th May 1983 between [COMPANY] ([NAME]) and [NAME] ([NAME]), and is for a term of 99 years from 24th June 1982. [36] The lease was assigned to the Respondent on 10/08/2007.

5. On 25th March 2021 the Tribunal made a Directions Order on the basis of the papers only. The Respondent was advised to seek legal advice.

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6. The Respondent has taken no part in these proceedings.

THE BACKGROUND

7. The Applicant acquired the freehold interest in the building on 8th October 1993. The building is a terraced house converted into three flats in the early 1980’s. Each flat had the benefit of a 99- year lease. [NAME] holds the leasehold interest of the top floor flat. The leasehold interest of the middle floor flat is held by another leaseholder, not connected to this application, and the basement flat is the subject of these proceedings.

8. The Applicant has had no contact with the Respondent, who has not paid any monies due under the terms of the lease since 2014. The last contact with the Respondent was in 2014 when he called [NAME] and they met outside the flat. The Respondent said that he had left the UK, but was back for a few days and promised to pay outstanding ground rent and insurance contributions. Since that time there have been episodes of anti-social behaviour in and around the flat and various complaints by neighbours were made. The Applicant’s tenants in the building gave notice because of the fights that occurred. One of the people occupying the property caused much of the nuisance and the police became involved and arrested him. The anti-social behaviour appears to have escalated in or around February 2020 when [NAME] in the flat threatened the Applicant’s sons, and it was at that stage that the Applicant decided to make this application to the Tribunal.

Preliminary issues

9. This matter initially came before the Tribunal for hearing on 27th May 2021. That hearing was adjourned for the Applicant to produce an up-to-date office copy entry (“OCE”) in relation to the flat, and for the Tribunal to send a copy of the application to [NAME] (“[NAME]”).

10. On 27th May 2021 the Tribunal sent a copy of the application to [NAME] and on 14th June 2021 [NAME]’s representatives, [NAME], emailed the Tribunal asking that [NAME] be joined as a party to the proceedings. On 15th June 2021 they emailed again to say that [NAME] had spoken to the Applicant and no longer sought to be joined.

4 11. The Applicant has provided an up-to-date OCE for the flat and has provided a revised appeal bundle with further evidence.

12. The Applicant has provided extensive photographic evidence of service of the application to the Respondent at the last known address.

The alleged breaches

13. The application seeks a declaration in relation to alleged breaches of the following clauses 3(a), 4(a), 4(c), 4(e), and paragraphs 4(b) and 4(i) of the First Schedule of the Lease.

The Hearing

14. Mr [APPELLANT] (“The Applicant”) joined the hearing by way of a video link and was represented by Mr [COUNSEL] of Counsel. Also present at the hearing was Mr [COUNSEL], [NAME].

15. The Applicant confirmed his witness statements dated 1st March 2021 [23] and 9th June 2021 [149]. Mr [NAME] confirmed his witness statements dated 1st March 2021 [117] and 6th June 2021 [167].

16. Mr [NAME] took the Tribunal through the alleged breaches, and referred us to the relevant evidence as follows.

Alleged breach of clause 3(a) “3. [NAME] with [NAME] as follows:- (a) To pay the said rents during the said term at the times and in the manner aforesaid without any deduction”

17. The Applicant has produced letters sent to the Respondent in relation to his failure to pay ground rent and buildings insurance as well as evidence of legal proceedings issued against him in 2016. [66-75] 18. The Applicant’s confirms that the Respondent has not been seen or heard from since 2014 and that he has paid no ground rent or insurance contributions since that time.

5 19. The Applicant confirms that when the Respondent left the flat in 2014 he provided a forwarding address that proved to be a development site, an invalid email address and an invalid telephone number.

20. By way of supporting evidence the Applicant has provided evidence of non-payment of Council tax, and the summons that was issued against him in this regard. Further to solicitors writing on his behalf to the Local Authority and explaining that he is not the leaseholder, that summons was deleted [151]

21. The Applicant has been in communication with [NAME] over many years in relation to sums owed to him by the Respondents in relation to his obligations under the terms of the lease.

Alleged breach of clauses 4(a),4(c),4(e) “4. [NAME] with [NAME] and with the owners and lessees of the other Flats comprised in the Building and [NAME] will at all times hereafter (a) Keep the demised premises and all walls party walls sewers drains pipes cables wires and appurtenances thereto in good and tenantable repair and condition and in particular (but without prejudice to the generality of the foregoing) so as to support shelter and protect the parts of the Building other than the demised premises (b) …. (c) In every third year of the said term to paint all the outside wood and ironwork usually painted in a colour or colours approved by [NAME] (such approval not unreasonably to be withheld) and in every seventh year of the said term to paint all the inside of the demised premises now or usually painted in a proper and workmanlike manner with three coats at least of good paint and after every internal painting to repaper with paper of a quality equal at least to that hung at the date hereof such parts of the demised premises as are now papered and to stain varnish distemper stop whiten and colour such parts of the demised premise as have been previously so treated (d) … (e) Not to do or permit or suffer to be done any act deed matter or thing whatsoever whereby the risks or hazard of the Flat or building being destroyed or damaged by fire shall be increased so as to require an additional premium for insuring the same or which may make void or voidable any policy for such insurance”

6 22. The Applicant has provided a schedule of condition and dilapidations report in relation to the flat dated 27th August 2020, prepared by [NAME] [47-64]. The report confirms that the “property is presented in dilapidated condition and in need of a complete refurbishment/overhaul. Parts of the property have been vandalised by the previous occupier.” [50].

23. The schedule of dilapidations describes the extent of external and internal issues. These include damaged boundary walls and fences, overgrown tree at front elevation close to the building structure, boundary walls to the front elevation and front left elevation damaged, fence to the front left elevation damaged an unsecured, accumulation of debris at the basement level, in the garden and in the rear passageway, cracked window panes, damaged front bay sash windows, kitchen timber casement window damaged and rotten, bathroom timber casement window and cill in need of redecoration, rear and side elevations requiring redecoration, the main entrance frame is damaged, radiator removed from brackets, internal damp walls, electrical sockets damaged, ceiling light point exposed, internal doors removed from hinges, door frames damaged, walls damaged/vandalised, the kitchen and bathroom, tiles and floors all require replacing further to damage by [NAME]. The cost for the works is said to be £50,616.62. [58]

24. The photographs exhibited to the report show the extent of the dilapidations [60-64] as well as significant rubbish, and evidence of rodents.

25. Photographs demonstrate painting of all over the communal external steps and walls in bright blue paint [60,61,92-100].

26. Photographs show that internal walls have been painted in bright pink/red/blue/yellow [110-112].

Alleged breach of paragraphs 4(b), 4(i) of the First Schedule 27. “The First Schedule ….. 1…. 2…. 3…. 4. [NAME]: (a) … (b)Shall not erect any stove or pipe or cause or permit any offensive or inflammable materials to remain or collect in the demised premises or do

7 anything which may affect or invalidate any fire insurance in respect of the Building or any part thereof or increase the rate of premium of such insurance (c) … (d)… (e)… (f)… (g)… (h)… (i) Shall not do or suffer to be done any act or thing in the demised premises or any part thereof to the annoyance or injury of [NAME] or other tenants of the Building or of adjoining premises”

28. Evidence in the dilapidations report demonstrate damage to the property, including exposed electrical sockets, removed doors, damaged door frames and extensive debris and rubbish in the property. This has resulted in the increase in buildings insurance is evidenced by invoices in 2019 and 2020 which show in increase from £517.34 in 2019 prior to the vandalism [116] to £1422.76 in 2020 [115].

29. Evidence has been produced in the form of emails from unhappy tenants and neighbours and correspondence with the police. These relate to anti-social behaviour and dilapidations and the effects on the neighbours.

30. The Applicant also asserts that for a time there was a brothel in the flat.

The Tribunal’s Determination

Clause 3(a) 31. The Tribunal are satisfied that the Respondent is in breach of his obligation under this clause to pay rent under the terms of the lease since 2014. The Applicant has proved relevant service of the application to the Respondent’s last known address, and instructed a tracing agent. No trace of the Respondent has been found.

Clauses 4(a), 4(c), 4(e) 32. The Tribunal is satisfied that the Respondent is in breach of these terms of the lease. There is overwhelming evidence in

8 the dilapidations report produced in the bundle that the property has been vandalised which will cost in excess of £50,000 to remedy. The evidence of the increased insurance premium demonstrate the possible risk or hazard to the property as a result of the damage caused.

Paragraphs 4(b) and 4(i) of the First Schedule 33. The Tribunal is satisfied that the Respondent is in breach of these terms of the lease. The photographic evidence of the rubbish collected internally and externally, as well as the exposed electrics and the insecurity of the flat.

34. The correspondence from neighbours and the police correspondence as well as the Applicant’s own evidence demonstrates the nuisance caused both to him, his family and the neighbours by the [NAME] in the flat.

35. No finding is made in relation to the allegation of a brothel in the flat.

Applications under s.20C Landlord and Tenant Act & Paragraph 5A to Schedule 11 of CLARA

36. The Respondent was not present to make any application and the Tribunal made no order.

Application for Costs

37. The Applicant seeks an order that the Respondent pay the Applicant’s legal costs in relation to this application.

38. The Tribunal makes no order as to costs as it cannot be said that the Respondent, having apparently disappeared, has demonstrated unreasonable behaviour in accordance with the Upper Tribunal guidance in [ADDRESS] Company (1985) [COMPANY] v Alexander [2016] UKUT 290 (LC) the Upper Tribunal (Lands Chamber) (UT)

D. Brandler

Tribunal Judge Brandler

25th June 2021

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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 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).

11 Appendix of Relevant Legislation Landlord and Tenant Act 1985 Section 20C.— Limitation of service charges: costs of proceedings. (1) A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court [, residential property tribunal] or leasehold valuation tribunal [ or the First-tier Tribunal] , or the [Upper Tribunal] , or in connection with arbitration proceedings, are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant or any other person or persons specified in the application. (2) The application shall be made— (a) in the case of court proceedings, to the court before which the proceedings are taking place or, if the application is made after the proceedings are concluded, to [the county court] ; (aa) in the case of proceedings before a residential property tribunal, to a leasehold valuation tribunal; (b) in the case of proceedings before a leasehold valuation tribunal, to the tribunal before which the proceedings are taking place or, if the application is made after the proceedings are concluded, to any leasehold valuation tribunal; (ba) in the case of proceedings before the First-tier Tribunal, to the tribunal; (c) in the case of proceedings before the [Upper Tribunal], to the tribunal; (d) in the case of arbitration proceedings, to the arbitral tribunal or, if the application is made after the proceedings are concluded, to [the county court]. (3) The court or tribunal to which the application is made may make such order on the application as it considers just and equitable in the circumstances.

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

12 (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. Section 169 - Section 168: supplementary (1) An agreement by a tenant under a long lease of a dwelling (other than a postdispute arbitration agreement) is void in so far as it purports to provide for a determination— (a) in a particular manner, or (b) on particular evidence, of any question which may be the subject of an application under section 168(4). (2) For the purposes of section 168 it is finally determined that a breach of a covenant or condition in a lease has occurred— (a) if a decision that it has occurred is not appealed against or otherwise challenged, at the end of the period for bringing an appeal or other challenge, or (b) if such a decision is appealed against or otherwise challenged and not set aside in consequence of the appeal or other challenge, at the time specified in subsection (3). (3) The time referred to in subsection (2)(b) is the time when the appeal or other challenge is disposed of— (a) by the determination of the appeal or other challenge and the expiry of the time for bringing a subsequent appeal (if any), or (b) by its being abandoned or otherwise ceasing to have effect.

13 (4) In section 168 and this section “long lease of a dwelling” does not include— (a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies, (b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or (c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8). (5) In section 168 and this section— “arbitration agreement” and “arbitral tribunal” have the same meaning as in Part 1 of the Arbitration Act 1996 (c. 23) and “post-dispute arbitration agreement” , in relation to any breach (or alleged breach), means an arbitration agreement made after the breach has occurred (or is alleged to have occurred), “dwelling” has the same meaning as in the 1985 Act, “landlord” and “tenant” have the same meaning as in Chapter 1 of this Part, and “long lease” has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share. (6) Section 146(7) of the Law of Property Act 1925 (c. 20) applies for the purposes of section 168 and this section. (7) Nothing in section 168 affects the service of a notice under section 146(1) of the Law of Property Act 1925 in respect of a failure to pay— (a) a service charge (within the meaning of section 18(1) of the 1985 Act), or (b) an administration charge (within the meaning of Part 1 of Schedule 11 to this Act).

Schedule 11 paragraph 5A (1) A tenant of a dwelling in England may apply to the relevant court or tribunal for an order reducing or extinguishing the tenant's liability to pay a particular administration charge in respect of litigation costs. (2) The relevant court or tribunal may make whatever order on the application it considers to be just and equitable. (3) In this paragraph— (a) “litigation costs” means costs incurred, or to be incurred, by the landlord in connection with proceedings of a kind mentioned in the table, and (b) “the relevant court or tribunal” means the court or tribunal mentioned in the table in relation to those proceedings.

Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013/1169

14 Rule 13.— Orders for costs, reimbursement of fees and interest on costs (1) The Tribunal may make an order in respect of costs only— (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

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