Tenant's Application for Manager Struck Out Due to Lack of Prospects

OUTCOME: Struck Out

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/22UD/LAM/2025/0005 Property : [NAME_1], Warley, Brentwood, Essex [POSTCODE] Applicant : [redacted] 2.[NAME_3] (23a The Clock Tower) Representative : [NAME_2] Respondents : [redacted] : [NAME_4] of application : Appointment of a manager Tribunal member(s) :

Regional Judge Wayte

Date of decision : 12 August 2025

DECISION

Decision of the tribunal The application is struck out as the Tribunal considers that there is no reasonable prospect of the applicants succeeding in appointing a manager on the basis of their application.

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The application 1. On 3 November 2024 the applicants, of [ADDRESS] and 23a the Clock Tower, [NAME_1], made an application for an order appointing [NAME_5], described as a Development Manager, as manager under section 24 of the Landlord and Tenant Act 1987 (“the Act”). The applicants sought the order due to the alleged failure of the residents’ management company to comply with the terms of its obligations under the leases, in particular the failure to redecorate the buildings internally and externally every 5 years.

2. The application relied on a section 22 notice dated 20 August 2024 which alleged that the respondent’s directors had moved to a 7-year cycle in 2017 without consulting all shareholders. As to the remedy, the options were described either as raising the required finance to undertake the works required to comply with the lease or formally varying the lease to allow for a realistic time frame/cycle of works to be undertaken. 30 days was provided for either option.

3. There was some delay in passing the application to me for directions, caused by a shortage of casework staff in the tribunal. On 3 April 2025, [NAME_4], solicitors instructed to represent the respondent, wrote to the tribunal to suggest that it consider offering the parties mediation rather than proceed to issue directions. The applicants replied confirming that they had always been open to mediation and suggested they attend the next directors meeting to try and resolve the issue.

4. On 12 May 2025 and having read the respondent’s reply to the section 22 notice, I asked the caseworker to write to the parties pointing out that in the circumstances of this case, the tribunal was unlikely to appoint a manager and it would be better for the parties to engage in discussions themselves as mentioned above. More information was sought as to the proposed manager and a copy of the tribunal’s Practice Direction on the Appointment of Manager jurisdiction was sent to the parties for guidance. 5. [NAME_2] replied the same day to state that the breach had been going on for years and to say that he and the other applicant would look at other options in terms of an alternative management company if the proposed manager did not meet the tribunal’s criteria. He subsequently proposed [NAME_6], who were said to have 40 years experience in residential block management.

6. Further correspondence followed between the parties and on 30 May 2025 a further email was sent stressing that the application required much greater support or evidence that the property was at risk. I

3 stayed the application for two weeks to allow for discussions between the parties and stated that after that date I was minded to ask for representations from the applicant as to why their proceedings should not be struck out under rule 9(3)(e) of the Tribunal procedure (First- tier Tribunal)(Property Chamber) Rules 2013 (“the Tribunal Procedure Rules 2013”) on the basis that there was no reasonable prospect of the tribunal being satisfied that it is just and convenient to appoint a manager. 7. [NAME_2] asked for more time as he wished to prepare an application seeking a determination that the management company were in breach of the lease. He subsequently sent further information in support of his application, described below. On 17 June 2025 I asked the caseworker to write to the parties stating that I was of the preliminary view that there was no reasonable prospect of the tribunal being satisfied it was just and convenient to appoint a manager, in the absence of compelling evidence that there are serious management failures and widespread support for the application. I gave both parties until 4 July 2025 to make their final representations and confirmed that the tribunal did not have jurisdiction to consider alleged breaches of the lease by the management company. I suggested that the applicants seek advice before considering whether to proceed in the County Court.

8. As there was some delay in arranging the meeting between the parties, I subsequently indicated that my decision would be made on or after 21 July 2025. The respondent’s submissions were made on 4 July 2025 and the meeting took place on 24 July 2025. I have disregarded comments from the applicants about that meeting as it was said to have been without prejudice and in any event is not relevant to the question I need to decide today. Background 9. The respondent’s solicitors had confirmed in their letter dated 19 September 2024 that the notice related to two flats within an estate known as “[NAME_1]”. The estate consists of 245 residential leaseholder properties and the respondent is named in the lease as the manager of the estate. As the name suggests, the company is made up of the leaseholders.

10. The tribunal was provided with a copy of the lease for [ADDRESS]. That set out the respondent’s obligations in clause 4. 4.15 provided for painting the outside wood and ironwork “In the year 2011 and thereafter once in every fifth year prepare as necessary and paint etc…”. 4.17 provides for the decoration of the internal common parts “In the year 2011 and thereafter once in every fifth year…or sooner if necessary…”. The tribunal has not been sent a copy of the lease for the other property but has assumed it is in the same terms.

4 11. The section 22 notice served by the applicants referred to both clauses and the decision of the directors to move to a 7-year cycle apparently without consulting all shareholders. That breach formed the basis of the application for the appointment of a manager. Statutory Framework 9. Under section 24(2) of the Act, the tribunal may appoint a manager under section 24 in various circumstances. These include where the tribunal is satisfied:  that any relevant person either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them; or  that unreasonable service charges have been made, or are proposed or likely to be made; and  that it is just and convenient to make the order in all the circumstances of the case. Section 22 notice 10. Before an application for an order under section 24 is made, section 22 of the Act requires the service of a notice which must, amongst other requirements, set out steps for remedying any matters relied upon which are capable of remedy and give a reasonable period for those steps to be taken. The applicants’ case 11. The applicants assert that the failure to decorate the inside and outside of their respective properties every 5 years, as set out in their leases is evidence of the breach which triggers a section 24 application.

12. On 5 June 2025, the applicant sent a copy of a letter from the respondent’s directors said to have been sent to all shareholders in 2022. That letter confirmed a decision in 2017 to “revert to a seven- year cycle” to avoid significant increases to the reserve contribution. A plan was outlined for works between June 2023 to June 2025, which the applicants state has been subject to additional delay.

13. The applicants also sent in several building condition survey reports, all dated 16 February 2022. The surveyor had been instructed by the respondent to carry out a 10-year building condition and budget appraisal report for the estate as a whole. [ADDRESS] is described as a period property with 12 units. The report graded the condition of

5 aspects of the property from very poor to good. Nothing was graded “very poor”. A few items were graded “poor”: repairs and cleaning to stonework in the walls and below the windows and corroding handrails to the lower ground floor. Exterior paintwork and the internal common parts were graded across a range from good to average. The Clocktower is a larger block with 36 units with a few more items graded “poor” due to paint finishes failing. The applicant drew attention to the statement in the reports that “It is very important to consider any intervals contained in the Leases because where particular redecoration intervals are prescribed it is essential they are followed”. He submitted that “it is abundantly clear that the professional opinion of the building surveyor, appointed by the [respondent] is that it is essential for redecoration to be undertaken as per the leases” and was concerned that the respondent’s decision to go directly against both the terms of the lease and the professional advice of its own surveyor demonstrates the risk posed to the properties.

14. Following the meeting between the parties and a [NAME_9], the applicants stated that they firmly believe that serious mismanagement is ongoing and that this has the potential to financially impact every single shareholder, should the freeholder consider the state of repair and condition of the estate was unsatisfactory and either require the respondent to carry out further works or undertake them personally and demand reimbursement from the respondent. The respondent’s case 15. As stated above, the respondent issued a detailed response to the section 22 notice on 19 September 2024. That confirmed that not all the leases for the development were materially the same and claimed that the majority of the leases had qualified the apparent requirement to decorate both internally and externally every 5 years by the addition of the words “or as is reasonably necessary”. They also claimed that the addition of the words “prepare as necessary” in the applicants’ own lease acted to qualify the obligation such that they were not in breach of it. In any event, they submitted that works have been carried out every year since 2017 and that they were therefore complying with their duties in respect of maintaining the premises.

16. The move from 5 to 7 years was reached initially by agreement following an AGM, to avoid putting increased financial strain on the leaseholders. This position was supported in subsequent AGMs. In addition to the applicants, only one other discussion had been held with a leaseholder over the years since 2017 and, as far as they were aware, there was no support from other leaseholders for this application.

In all the circumstances they submitted that it would not be just and convenient to appoint a manager and the application should be struck out.

6 The tribunal’s decision 17. I agree with the applicants that the lease for [ADDRESS] appears to require both internal and external decoration every 5 years. There is no qualification to that period, the words “as necessary” refer to the preparation of surfaces prior to decoration as opposed to decoration altogether. That said, I have no reason to doubt that other leases are subject to qualification and the surveyors’ reports indicate both that the respondent has taken a responsible approach to its duty to maintain the estate and that its condition is satisfactory (or at least was in 2022). I do not read the surveyor’s comments about compliance with the 5 year period in the same way as the applicants but as a statement that it is important in principle to comply with covenants in a lease. The applicants have never asserted their property is in poor condition or need of repair or provided any evidence in support to that effect. There is also evidence of cyclical and ongoing repairs being carried out and a recent commitment to carrying out further surveys (including on behalf of the freeholder). I am not ignoring evidence of the apparent breach of at least one lease but no evidence has been provided that management of the estate has broken down, either in respect of repairs or otherwise.

17. This application is made by just 2 leaseholders out of some 250 (numbers quoted by the respondent were 245 in its original response to the section 22 notice and 256 in the submissions to the proposed strike out). Given that management is carried out under the leases by a resident owned and run company, the tribunal would need to see widespread support before it would intervene to replace the manager chosen by the residents. Again, this was wholly lacking.

18. In any event, the replacement of the existing manager would lead to additional costs for all the leaseholders, apparently against their will.

19. In the circumstances and having given the applicants plenty of time to bolster their application, I am clear that there is no reasonable prospect of the tribunal concluding that it would be just and convenient to appoint a manager. It is obviously unsatisfactory that the leases of the estate appear to contain differing covenants in respect of decorations but I hope that since all relevant parties have met, a way forward can be agreed. It may also be that agreement can be reached to vary the leases so that the provisions are the same, although there would clearly be a cost attached and sufficient numbers would need to agree to make such an application.

20. In the circumstances and with an eye to dealing with this application proportionately in accordance with the overriding objective of the tribunal, I strike it out under rule 9(3)(e) of the Tribunal Procedure Rules 2013 (no reasonable prospect of success).

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Name: Regional Tribunal Judge Wayte Date: 12 August 2025

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).

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference HMCTS Code : CAM/22UD/LAM/2025/0005 P: PAPER REMOTE

Property :

[NAME_1], Warley, Brentwood, Essex [POSTCODE] Applicants :

[redacted] 2.[NAME_3] : [NAME_2] Respondents : [redacted] : [NAME_4] of application : Rule 13 costs Tribunal member(s) :

Judge Wayte

Date of decision : 13 October 2025

DECISION

The tribunal will not make an order for costs against the applicants pursuant to Rule 13(1)(b) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013.

2 Background 1. This application for costs, made by [NAME_4] on behalf of the respondent, followed the tribunal’s decision dated 12 August 2025 to strike out the application for the appointment of a manager on the basis that there were no reasonable prospects of the tribunal agreeing to appoint a manager in the specific circumstances of the application.

2. The applicants relied on the failure of the management company to decorate the inside and outside of their respective properties every 5 years, as set out in their leases, as a breach of covenant triggering the application. The tribunal accepted that the respondent was in breach of those leases but further accepted that not all of the leases contained the same provisions; the majority were subject to qualification by the addition of the words “or as is reasonably necessary”. In the absence of evidence that the applicants’ property was in poor condition, that the management of the estate had broken down or any more widespread support for the application (there being some 245 leasehold properties on the estate) the application was struck out.

3. The application for costs under Rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (“the 2013 Rules”) was made on 9 September 2025. Costs of £7, 353.84 including VAT were sought, to include the costs of responding to the notice served in accordance with section 22 of the Landlord and Tenant Act 1987 before the proceedings were commenced and of a mediation, which I assume took place during the proceedings.

4. The respondent claims that the applicants have acted unreasonably in bringing the proceedings. I have carefully considered their grounds, which I summarise below. The Law 5. Under Rule 13(1) of the 2013 Rules, the tribunal may make an order for costs only under section 29(4) of the Tribunal Courts and Enforcement Act 2007 (wasted costs) or if a person has acted unreasonably in bringing, defending or conducting proceedings (unreasonable costs).

6. The leading Upper Tribunal decision on Rule 13(1) unreasonable costs is [ADDRESS] Company 1985 Ltd v Alexander [2016] UKUT 0290. There are three steps: I must first decide if the applicants acted unreasonably. If so, whether an award of costs should be made and, finally, what amount.

7. In deciding whether a party’s behaviour is unreasonable the Upper Tribunal in [ADDRESS] cites with approval the judgment of [NAME_12] in Ridehalgh v Horsefield [1994] Ch 2005. It does so at paragraph 24 of its decision in these terms: ““Unreasonable” conduct includes conduct which is vexatious, and designed to harass the other side rather than advance the resolution of the case. It is not enough that the conduct leads in the event to an unsuccessful outcome. The test may be expressed in different ways. Would a reasonable person in the position of the party have conducted themselves in the manner complained of? Or Sir [NAME_7] [NAME_7]’s “acid test”: is there a reasonable explanation for the conduct complained of?”. 8. [ADDRESS] of Appeal has recently considered the test for unreasonable conduct justifying a Rule 13 order in [NAME_8] (and others) v [COMPANY_10] [2024] EWCA Civ 1241. That decision makes it clear that a finding of unreasonable conduct does not require vexatious conduct or harassment. The relevant question is the “acid test” in the light of the facts of each case. Was the applicants’ conduct unreasonable? 9. In the Grounds submitted in support of the application for costs, [NAME_4] relied primarily on their response to the section 22 Notice, which they also submitted formed part of bringing proceedings as it is a necessary precursor of the application under section 24 of the 1987 Act. That response, dated 19 September 2024, explained that not all the leases required works within a 5 year period and that the majority of leaseholders were in agreement with extending the period to 7 years. The respondent’s solicitors invited the applicants to withdraw their notice and confirmed that if an application was made to the tribunal, they had instructions to draw the correspondence to the attention of the tribunal in respect of any costs sought. That was repeated in a letter dated 8 October 2024, before the application was made to the tribunal on 3 November 2024.

10. In addition to the conduct in advance of the application being made to the tribunal, the respondent also points to the tribunal’s repeated indications that a breach of lease (if proven) was unlikely to be sufficient for the appointment of a manager. Given the striking out of the application as set out above, the respondent submits that there can be no reasonable explanation for the proceedings.

11. There has been no response from the applicants but I decided that none was required in the circumstances. The tribunal’s decision

4 12. It is well established that rule 13 costs orders are likely to be the exception rather than the norm and that the standard for litigants in person when assessing their behaviour is that of a reasonable litigant in person, rather than an experienced or professional litigant. With this in mind, together with the fact that they were correct that the respondent was in breach of their lease, I do not consider that the act of issuing a section 22 notice and subsequent proceedings fails the “acid test”.

13. In any event, there was very little work undertaken following that application as I pointed out the poor prospects of success to the applicants at an early stage. The 2013 Rules require parties to be given the opportunity to make submissions before a decision can be made to strike an application out and therefore there can be no complaint of that process being undertaken.

14. The costs incurred by the respondent were mainly in respect of the response to the section 22 notice, the mediation proposed by them and this application. Although that is not strictly relevant to the question of whether there has been unreasonable behaviour by the applicants in bringing the proceedings, it does put the application in context.

15. I am not convinced that a section 22 notice is a step in proceedings as defined in rule 13 and in any event, it cannot be unreasonable to issue a notice in circumstances where the party is aware that their lease is not being complied with; a breach is the main pre-condition set out in section 24 of the 1987 Act. It is well established that having a poor case is insufficient to amount to unreasonable behaviour without further aggravating factors. There is no evidence of any intemperate or other poor behaviour, simply the applicants failing to demonstrate more substantial grounds for their application.

16. The application has therefore fallen at the first hurdle and there is no need to consider the next two steps. That said, even if I had decided that the applicants’ behaviour in bringing these proceedings was unreasonable in the [ADDRESS] sense, I would not have made an order for costs against them for similar reasons: the fact that they are litigants in person and their conduct must be judged in that light, that I decided there had been a breach of the lease and that the application was struck out under Rule 9, which required the parties to be given an opportunity to make submissions. I hope the parties can now put this application behind them.

Name: Judge Wayte

Date: 13 October 2025

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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).