Tenant's Application for Manager Dismissed Due to Invalid Notice

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AG/LAM2021/0021 HMCTS code (paper, video, audio) : V: FVH Video Remote Property : [NAME], 128 [ADDRESS] [POSTCODE] Applicants : [redacted] Representative : [NAME] [COUNSEL] [NAME] instructed by [COUNSEL] LLP Respondent : [redacted] :

[NAME] [COUNSEL] [NAME] [NAME] instructed by [COUNSEL] [COMPANY] of [NAME] : Preliminary issue hearing Tribunal members : Judge N [NAME] of remote hearing : 24 January 2022 Date of decision : 8 February 2022

DECISION

Covid-19 pandemic: VIDEO HEARING This has been a remote video hearing which has been consented to by the parties. The form of remote hearing was V: FVH REMOTE. A face-to-face hearing was not held because it was not practicable and all issues could be

2 determined at a remote hearing. The documents that the Tribunal was referred to, are in a bundle of 993 pages, including index. The order made is described below.

Decisions of the Tribunal The Applicants’ [NAME] for the appointment of a manager dated 24 August 2021 is dismissed.

The [NAME]

1. This is an [NAME] made by the Respondent in proceedings brought by the Applicants for an order appointing a Manager in respect of [NAME], 128 [ADDRESS] [POSTCODE] (“the Property”) under section 24 of the Landlord and Tenant Act 1987 (“the 1987 Act”).

2. The Respondent seeks an order dismissing the [NAME] on the grounds that no valid notice pursuant to section 22 of the 1987 Act has been served on the Respondent by the Applicants.

3. On 19 January 2022, the Tribunal directed that this [NAME] would be determined as a preliminary issue on 24 January 2022, the date on which the final hearing had originally been listed. The hearing 4. A video hearing took place on 24 January 2022. The Applicants were represented by [NAME] [COUNSEL] [NAME], instructed by [COUNSEL] LLP, and the Respondent was represented by [NAME] [COUNSEL] [NAME] [NAME], instructed by [COMPANY].

5. Due to technical issues, [NAME] [NAME] initially attended by telephone, having indicated that he was content to proceed on this basis. He later attended by video. All other participants attended by video throughout. The Tribunal’s determination

The background 6. The Respondent is the freehold owner of the Property. 7. By a headlease dated 6th October 1998, [COMPANY] granted a term of 999 years from 25th March 1998 of parts of the Property to [COMPANY]) [COMPANY] (“the Headlease”).

3 8. The registered proprietor of the Headlease is [COMPANY] (“AHL”). The Tribunal was informed that a number of the Applicants are directors of AHL. It is common ground that the structural parts of the Property do not fall within AHL’s demise.

9. The Applicants have under-leases of flats at the Property and the Tribunal was referred to a specimen [NAME] lease (“the [NAME]”).

10. The demised premises are defined at the First Schedule 1 Part I of the [NAME] and comprise the [NAME] but exclude the “Main Structure”. 11. “Main Structure” is defined at clause 1 as “the main structural parts of the Buildings including . . . the roof . . .[and] walls”.

12. In the Second Schedule, the landlord grants rights to the tenant which include a right of support and protection of the Demised Premises from other part of the Property and such rights as are granted under the Headlease.

13. Under the [NAME], the landlord covenants to procure the provision of services set out in the Fourth Schedule (clause 7).

14. At paragraph 2 of the Fourth Schedule, the landlord covenants to repair the “Maintained Property”. 15. “Maintained Property” has an ambulatory meaning. It is defined at Part II of the First Schedule and it includes the Main Structure but only until such time as the Superior Landlord accepts responsibility for the same. It is common ground that the Respondent has accepted responsibility for the roof and for the Main Structure of the Property.

16. The landlord also covenants to procure the observance by the Superior Landlord of the covenants set out in clause 4 of the Headlease. Those covenants include an obligation to keep the Main Structure and roof of the Property in repair.

17. A notice pursuant to section 22 of the 1987 Act dated 22 November 2020 has been served on behalf of certain of the lessees of flats at the Property on the Respondent (“the section 22 notice”).

18. The section 22 notice was prepared by [NAME], it is addressed to no party other than the Respondent, and the Applicants do not contend that it was served on AHL.

19. Schedule 2 of the section 22 notice sets out issues said by the Applicants to require redress which include:

4 (i) Water penetration through the roof of the Property; (ii) Management by the Respondent of other (commercial) tenants in the Property; (iii) Management by the Respondent of the Property generally; and (iv) Fire safety of the Property. Statutory provisions 20. By section 22(1) of the 1987 Act, before an [NAME] for an order under section 24 is made in respect of any premises to which the 1987 Act applies by a tenant of a [NAME] contained in those premises, a section 22 notice must (subject to subsection (3) which is not applicable in the present case) be served by the tenant on: a) the landlord, and b) any person (other than the landlord) by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy.

21. Pursuant to section 59(1) of the 1987 Act, a lease includes a sub-lease and, pursuant to section 59(2) of the 1987 Act, the expression “landlord” and “tenant” are to be construed accordingly.

22. By section 60(1) of the 1987 Act, “landlord” for the purposes of Part II of the 1987 Act means the immediate landlord or, in relation to a statutory tenant, the person who, apart from the statutory tenancy, would be entitled to possession of the premises subject to the tenancy. These proceedings do not concern any statutory tenancy.

23. By section 23 of the 1987 Act, no [NAME] may be made for an order under section 24 unless: a) A section 22 notice has been served and the reasonable period for remedy of a breach has expired without the landlord or relevant person having taken the required steps, or the breach was not capable of remedy; or b) Service of the section 22 notice has been dispensed with and any directions made by the tribunal as to further steps or notices have been complied with.

5 24. It is not contended that the service of a section 22 notice can be dispensed with in the circumstances of the present case. Reasons for the Tribunal’s determination 25. The Tribunal accepts the Respondent’s case that: a) [NAME] is a tenant for the purposes of the 1987 Act and the landlord of each [NAME] is AHL. b) The section 22 notice served by the [NAME] lessees on the Respondent is of no effect because the Respondent is neither “the landlord” of the [NAME] lessees nor a person “by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy” in relation to the [NAME] lessees. Whether the Respondent is the landlord of the [NAME]

26. The landlord and tenant are defined in the 1987 Act and we do not consider these terms to be ambiguous. The Tribunal accepts the following submissions made by [NAME] [RESPONDENT]: “… the question of who is ‘the landlord’ vis a vis each [NAME] is answered by the basic principles of landlord and tenant. The following principles are applicable: a) A ‘tenant’ both by derivation and usage is someone who holds land of another (Woodfall 1.001). b) It is essential for the establishment of the relationship of landlord and tenant that there should be a demise (Woodfall 1.002). c) A ‘demise’ or ‘lease’ is the grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land (Woodfall 1.003). d) The party to whom the lease is granted is called the ‘[NAME]’ or ‘tenant’, and the party by whom the lease is granted is called the ‘lessor’ or ‘landlord’. The person in whom a lease is for the time being vested is also known as a ‘leaseholder’, and the person entitled for the time being to the reversion thereon as a ‘reversioner’ (Woodfall 1.004). e) Other persons beside the landlord and the tenant may be party to a lease. It is common in long leases of residential flats for a management company to be party to the lease for the purpose of covenanting to perform certain functions and services, and to collect a service or maintenance charge, or for a trustee to be a party to a lease

6 for the purpose of applying funds collected from the lessees towards the maintenance and repair of property (Woodfall 1.005). f) In every case there must be reserved to the landlord a reversion upon the lease, for without a reversion there can be no demise and the relationship of landlord and tenant does not come into existence. The reversion may be defined as that estate in the land which remains vested in the landlord during the continuance of the term granted to the tenant. The reversion upon a lease may be either freehold or leasehold; a lease derived out of a leasehold interest being known as an underlease or sub-lease (Woodfall 1.005).

29. From these first principles, one may make the following statements in respect of each [NAME]: a) The parties to the lease were the lessor and [NAME]. b) There was no third party. c) The person in whom the lease is now vested is ‘the tenant’. d) The person in whom the reversion is now vested is ‘the landlord’. e) The reversion was the estate in land which remained vested in the landlord at the date of grant. f) The estate which was vested in the landlord at the date of grant is the same estate as is now vested in AHL. g) Therefore AHL is ‘the landlord’ in respect of each [NAME].” 27. We do not accept [NAME] [RESPONDENT] submission that the Respondent is the only party who can be the immediate landlord of the [NAME] lessees in respect of the roof of the Property and other areas which fall outside AHL’s demise.

28. There is no evidence before the Tribunal that the reversion in respect of the [NAME] leases has been severed and it must therefore remain with AHL. There is no direct relationship between the [NAME] lessees and the Respondent but rather it is for AHL to procure the observance by the Respondent of the covenants set out at clause 4 of the Headlease. 29. [NAME] [NAME] referred us to [COMPANY] v 7-11 [COMPANY] [2020] P.L.S.C.S., a decision of the County Court in which there was the severance of a reversion. The facts and circumstances of that case are so different from the facts before us that we did not find that authority of assistance in the present case.

7 30. We accept [NAME] [NAME] submission that, subject to certain exceptions which do not apply in the present case, between head landlord and sub- tenant there is neither privity of contract nor privity of estate (“Enforceability of Landlord and Tenant Covenants” 3rd edition, [APPELLANT]. M. [APPELLANT], 8-01). The [NAME] lessees cannot enforce the repairing covenants in the [NAME] leases against the Respondent. Further, in any event, the section 22 notice complains of alleged breaches of the Headlease rather than breaches of the [NAME] leases. Whether the Respondent is a person “by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy” 31. As stated above, pursuant to section 22(1) of the 1987 Act, a section 22 notice must be served both on “the landlord” (section 22(1) (i) of the 1987 Act) and “any person (other than the landlord) by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy” (section 22 (1) (ii) of the 1987 Act).

32. The wording section 22 (1)(ii) of the 1987 Act derives from an amendment made by Commonhold and Leasehold Reform Act 2002, section 160. Previously, the requirement was that the notice be served “on the landlord by the tenant”. The purpose of the new wording is explained as follows in the explanatory notes: 273. Section 160 corrects a defect in the appointment of a manager procedures under Part 2 of the 1987 Act. By virtue of the amendments made by this section leaseholders will be able to apply to a LVT for the appointment of a new manager where a lease provides for management functions to be carried out by a third party manager rather than the landlord. At present, leaseholders with such leases do not have the same rights as other leaseholders to apply for a new manager where the existing one is failing to manage the building properly. The grounds for appointment are extended by this section to cover acts or omissions by a third party manager as well as a landlord.

33. The Tribunal accepts the Respondent’s case that to fall within section 22(1)(ii) of the 1987 Act, the obligation in this case must: (i) Relate to management of the premises or any part of them; and (ii) Be owed to the [NAME] under the [NAME]. 34. The Respondent is not a party to the [NAME] and owes no obligations under them. Its only obligations are to AHL and derive from the

8 Headlease.

Accordingly, the Respondent is not a person “by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy” within the meaning of the subsection.

35. Having concluded that the Respondent was not the correct party for the Applicants to have served, it is not necessary for the Tribunal to consider whether AHL should have been served by the Applicants in addition to the Respondent.

36. No valid section 22 notice having been served on the Respondent by the Applicants, the Tribunal has no option but to dismiss the [NAME]. There has been some suggestion that the Tribunal might give guidance to the Applicants as to how to proceed. However, it is now common ground that it is not the function of the Tribunal to give a party guidance or advice.

Name: Judge N Hawkes Date: 8 February 2022

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 [NAME] for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] 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 [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).