disputes bringing cases to the first-tier property...

Service Charges –

An Introductory Workshop

Disputes – bringing cases to the

First-tier Property Tribunal and

alternatives

Speaker: Lucy Walsh

Senior Associate Trowers & Hamlins

Applications to the Property Chamber

Lucy Walsh, Trowers & Hamlins LLP

Presentation ———— 2 December 2013

Introduction

The Property Chamber

● Introduction of the Property Chamber and abolition of

LVT

● Types of applications:

• Determination of reasonableness of service

charges

• Dispensation from consultation requirements

• Variation of leases

● Making the application


● Leasehold Valuation Tribunal abolished (in England) on

1 July 2013

● Replaced by the First Tier Tribunal Property Chamber

• Part of First Tier Tribunal which now consists of 7

‘chambers’

• Administered by HMCTS

• Includes LVT, Rent Assessment Panels, Agricultural

Land Tribunal and Adjudicator to HM Land Registry

Rules of the Property Chamber

● Tribunal Procedure (First Tier Tribunal)(Property

Chamber) Rules 2013/1169 (the Rules)

• Came into force on 1 July 2013

• Leasehold Valuation Tribunals (Procedure)

(England) Regulations 2003 abolished

• The Rules govern all applications before the

Property Chamber – easier to navigate for users


● Rule 3 – Overriding Objective

● To deal with cases fairly and justly

• Proportionality

• Avoiding unnecessary formality


● Rule 6 – Case Management Powers

● Tribunal may regulate its own procedure, for example:

• Can extend/shorten time for complying with any

rule, direction

• Permit/require amends to be made to documents

• Stay proceedings

● Enables Tribunal to be more flexible and able to deal

with variety of applications


● Rule 9 – Striking out a party’s case

• Automatic strike out where party fails to comply with a direction that states failure to comply will lead to strike out

• Tribunal must strike out where it doesn’t have jurisdiction

• Tribunal may strike out where

- Direction states that failure to comply with direction could lead to strike out

- Applicant fails to cooperate with Tribunal in a way which means Tribunal can’t deal with it fairly and justly

- Tribunal consider the proceedings or manner in which being conducted as frivolous, vexatious or otherwise an abuse of process

- Tribunal considers there is no reasonable prospect of applicants proceedings succeeding


● Rule 13 – Orders for costs reimbursement of fees and

interst on costs

● Tribunal can made an order only:

• Under section 29(4) of the Tribunal Courts and

Enforcement Act 2007 (wasted costs)

• If a person has acted unreasonably in bringing

defending or conducting proceedings

● Departure from previous position of LVT – no longer

cap of £500

● Tribunal can make an order for costs of its own volition

● Can make an order for other side to pay any fee by the

other side


● Rule 19 – Expert Evidence

● Duty of expert is to help the Tribunal

• Overrides any obligation to instructing party

• Experts must be able to justify their opinions

• More akin to the duty experts owe to court

● Important experts understand their duty

● No expert evidence can be adduced without permission

of the Tribunal


● More relaxed atmosphere than court, more strictly

operated than LVT

● Litigants in person

● Useful forum

● Transfer of Tribunal Functions Order 2013/1036

• Changes to primary and secondary legislation

● Transitional period

Types of applications to the Property

Chamber

Applications to the Property Chamber

● Landlord and Tenant Act 1985

• Section 27A – determination of reasonableness of

service charges

• Section 20ZA – application for dispensation for

compling with consultation requirements

● Landlord and Tenant Act 1987

• Section 35 – application to vary a long lease

Section 27A Landlord and Tenant Act 1985

● Application for reasonableness of service charges:

• S.27A (1) An application may be made to [the

appropriate tribunal] for a determination whether a

service charge is payable and, if it is, as to—

(a) the person by whom it is payable,

(b) the person to whom it is payable,

(c) the amount which is payable,

(d) the date at or by which it is payable, and

(e) the manner in which it is payable

Section 27A Landlord and Tenant Act 1985

● Application can be made before costs are incurred –

s.27A (3)

● Could use s.27A for a determination that works fall

within the service charge provisions

• eg where there is an issue over construction of the

clause

Section 20ZA Landlord and Tenant Act 1985

● Application for dispensation from requirement to

comply with s.20 consultation requirements

• S.20ZA(1) Where an application is made to [the

appropriate tribunal] for a determination to dispense

with all or any of the consultation requirements in

relation to any qualifying works or qualifying long

term agreement, the tribunal may make the

determination if satisfied that it is reasonable to

dispense with the requirements

Section 20ZA Landlord and Tenant Act 1985

● Application can be made ahead of or after Qualifying

Works being carried out or QLTA being entered into

● Consider whether an application for dispensation would

take longer than actually consulting?

Section 35 Landlord and Tenant Act 1987

● Application to vary a long lease

• Can be made by any party to a lease

● In order to make an application, the lease must fail to

make satisfactory provision for one or more of the

matters set out in s.35(2). These include:

• The repair/maintenance of the flat/building

• The insurance of the building in which flat is situate

• The repair/maintenance of installations

• Recovery of expenditure incurred by one party for

the benefit of another

• Computation of service charge

Applying to the Property Chamber

Making the application

● Rule 26 requires notice of application to be sent to the

Tribunal

• Sets out information to be included

● The First-tier Tribunal (Property Chamber) Practice

Directions set out further requirements depending upon

type of application

• http://www.judiciary.gov.uk/publications-and-

reports/practice-directions/tribunals/tribunals-pd

● Precedent forms can be found on HMCTS website

• http://hmctsformfinder.justice.gov.uk/HMCTS/GetFo

rms.do?court_forms_category=Residential%20Prop

erty

http://www.judiciary.gov.uk/publications-and-reports/practice-directions/tribunals/tribunals-pd










http://hmctsformfinder.justice.gov.uk/HMCTS/GetForms.do?court_forms_category=Residential Property




Making the application

● Relevant application form completed

● S.27A application:

• Details of applicant, respondent, property concerned and any other party

• Service charge years in dispute

• Section 20C application? Details of any other concerned party

• Hearing or no hearing?

• Additional information – Statement of case/Scott Schedule

● Fee payable when application lodged together with any documents specified by Practice Direction as being required

Case Management

● On receipt, Tribunal will send a copy to the Respondent

and any other party it considers likely to be affected

• May choose to send a copy to them when you

make the application?

● Next step is for directions to be issued

• Response by Respondent

• Reply by Applicant

• Is a hearing necessary?

- To set directions

- To deal with any preliminary points

The Hearing

● Issues to be determined should have been narrowed

● Witness evidence should have been given

● Bundles sent to Tribunal ahead of hearing

● Length of hearing

• Half day/full day?

● Hearings are in public

● Relatively informal

● Enforcement of Decision

• Property Chamber has no enforcement powers

• Any decision can be enforced by order of county

court

Alternative Dispute Resolution

● Alternative option to legal proceedings before

court/Property Chamber

● ADR encouraged by courts and Tribunal

• Rule 4 – the Tribunal should seek to bring to the

attention of the parties any alternative methods of

resolving the dispute

● Voluntary process

Alternative Dispute Resolution

● Mediation

• Negotiation between parties with the aim of reaching a

settlement – no right or wrong

• Both parties usually share cost and pay mediator up front

• Want to end up with a binding agreement at the end of

the day signed by both

● Arbitration

• Arbitration clauses in leases void – rule 4 expressly

states that part 1 of Arbitration Act 1996 doesn’t apply

• Can enter into post-dispute arbitration argument

- Once determined by arbitrator, no right to have it

determined by Tribunal

Contact

© Trowers & Hamlins LLP 2013

Trowers & Hamlins LLP is a limited liability partnership registered in England and Wales with registered number OC 337852 whose registered office is at 3 Bunhill Row, London EC1Y

8YZ. Trowers & Hamlins LLP is authorised and regulated by the Solicitors Regulation Authority. The word “partner” is used to refer to a member of Trowers & Hamlins LLP or an

employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Trowers & Hamlins LLP’s affiliated undertakings. A list of the members

of Trowers & Hamlins LLP together with those non-members who are designated as partners is open to inspection at the registered office.

Trowers & Hamlins LLP has taken all reasonable precautions to ensure that information contained in this document is accurate, but stresses that the content is not intended to be legally

comprehensive. Trowers & Hamlins LLP recommends that no action be taken on matters covered in this document without taking full legal advice.

(c) Copyright Trowers & Hamlins – November 2013 – All Rights Reserved. This document remains the property of Trowers & Hamlins LLP. No part of this document may be reproduced in

any format without the express written consent of Trowers & Hamlins LLP.

Name Lucy Walsh

JobTitle Senior Associate

d 0161 838 2064

e [email protected]

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