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Park Homes
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Residential Leasehold

Flexible judicial deployment deals with the longstanding problem of what has officially been described by “legal ping-pong”, where courts and tribunals transfer and re-transfer cases back and forth, confusing both parties and their legal advisers in equal measure.

The basic premise with ‘double hatting’ is that all aspects of a dispute are determined on the same day by a judge wearing the different jurisdictional ‘hats’ of a County Court Judge and a Tribunal Judge. The idea is to simplify matters, reduce costs, speed things up and provide consistency.

There is no Practice Direction about flexible deployment in property cases. There is no widely available template for County Court directions to initiate flexible deployment. Some First-tier Tribunal panel areas have circulated suggested draft directions to local judiciary and the Association of Leasehold Enfranchisement Practitioners are producing model directions for enfranchisement disputes. But other than that, guidance is very thin indeed.

In the first appeal from a ‘double hatting’ case, namely Avon Ground Rent v Child [2018] UKUT; [2018] H.L.R. 44, at para 45 of the judgment, Holgate J states that:

“It is…essential that where a judge acts on the same occasion both as a judge of the FTT and as a judge of the County Court, that judge is very clear in his or her own mind as to which “hat” is being worn in relation to each aspect of the decision-making process, and that he or she maintains and articulates a clear distinction at all times between the discrete functions and roles being performed.”

In Avon v Child, the Upper Tribunal went even further, suggesting the directions should be identifying discrete issues at an early stage, at para 81:

“When a transfer order is drawn up care needs to be taken to see that it identifies the specific matters being transferred, that those matters do fall within the FTT’s jurisdiction and that they fall within the scope of the power to order the transfer.”

It is therefore important to get things right at the directions stage in the County Court. For example, it is not uncommon to see directions which purport to “transfer” issues to the F-tT that were plainly intended to be “allocated” to an F-tT judge or vice versa. Even tribunals can be unsure about whether County Court directions are intended to initiate ‘double hatting’ and it is sometimes necessary to revert to the County Court judge to clarify matters.  

Conclusions

Flexible judicial deployment is here to stay. It gives rise to procedural challenges, particularly given the absence of any formal guidance – as well as a number of substantive issues which are being worked through to this day.

The full version of this article will be available in a future edition of the Landlord and Tenant Review.

This was co-written with Mark Loveday, Tribunal Judge and Barrister at Tanfield Chambers.

Categories
holiday homes

The coronavirus pandemic has left many holiday caravan owners and park owners in limbo. The question discussed in this article is “must I pay for my pitch fees?”.

There are 2 aspects that have to be looked at very carefully in order to understand this situation better.

1. What does your agreement say?

2. What are facts of the matter or context?

What options do you have?

I shall outline a few options with dealing with pitch fees that may help caravan owners avoid being in breach of their agreement or avoid the termination of the caravan agreement.

Paying:

Firstly, you may wish to pay the sums “under protest”. This may deal with any consequences of non-payment might result in.  However, it is dependent on your particular facts if you will be able to recover these sums in a court.

Having a chat:

Park owners are reasonable and often helpful people, which leads me to say that it may be an idea to negotiate with the park owner. As Churchill famously said, “To jaw-jaw is always better than to war-war”. A letter of comfort may help clarify what has been agreed, which may be a “reduction”, “deferral” or “holiday” of the pitch fee.

Mediation:

Mediation is a key form of Alternative Dispute Resolution is ever so relevant in these concerning times. It is an “alternative” to having a decision imposed by a judge in a court and is a voluntary process and those that wish to participate may be able to get their needs, concerns and interests met.

Legal action:

Please note that court action should be considered the very last port of call for both parties concerned.

What is relevant is the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020. This provides that no person may leave the place where they are living without reasonable excuse. Visiting your holiday home would not cover reasonable excuse.

Another question that is being asked is “has the caravan agreement been frustrated?”.

The legal doctrine of frustration “occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract… it was not this that I promised to do.” 

Whether this argument or alternative arguments are applicable to the holiday sector is yet to be seen. What is certain is that the contractual terms are essential! This means you should seek specific advice on the terms of your caravan agreement and your circumstances on how to approach matters going forward.

Concluding remarks:

There is no doubt at all that the unlocking phase of the coronavirus will bring significant challenges for all of us. It is clear if caravan owners and park owners work together, things can work. The writer hopes that the options outlined above are of some assistance but should not be substituted for specific advice.

The information provided in this article serves as useful guidance and is not intended to be comprehensive advice for your particular matter. If in doubt, you could seek specific advice from a qualified lawyer. This material should not be replicated without the author’s consent. Ibraheem Dulmeer © 2020

This article is accurate as of 7 May 2020.

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All

Mediation an Alternative to Litigation in Lockdown and Beyond

Mediation, a meeting or meetings, joint and private between people in dispute chaired by a mediator to assist in reaching a joint resolution, manufactured and agreed by the participants.

The trite saying that Mediation is a key form of Alternative Dispute Resolution is ever so relevant in these concerning times.  It appears that the court lists will be further stretched and cases will take even longer to be heard.  Mediation is and remains a quicker, more cost-effective approach to resolving disputes and importantly can be completed remotely.  Participants reach their own decisions and do not have a declaration forced upon them, owning the process is empowering. Each mediation is unique as the “process” is always a flexible one, allowing participants to express themselves fully in a safe environment.

A mediator can bring a clear mind to the process.  Sometimes matters need clarity when very complex or have been ongoing for several months or years.  A fresh pair of eyes that encourages alternative thinking, with no advice given.

Moreover, if the mediator has knowledge of the sector the dispute involves, although not essential, this empowers deep questioning leading to alternative thinking, enabling participants to create ideas for a settlement.

The mediation process allows participants to discuss their real needs and weaknesses. These needs may not even be central to the dispute at times, but can be of significant importance.  Each participant may have different requirements that can fit into a final resolution without compulsion.

       “More than 90% of people leave the mediations expressing satisfaction with the process – a consumer rating that would be envied in most sectors of commerce”. Practical Mediation by Jonathan Dingle & John Sephton (2017)

There is no doubt that whatever issues you are facing, parties could benefit from mediation and thus avoiding costly litigation and time-consuming ongoing disputes, especially during a lockdown.  

What are the advantages of mediation over litigation?

Mediation is cost effective: Costs run at a fraction of that of litigation and are usually shared equally by participants.

Mediation is quick: Matters can come to mediation far quicker than they would to court and generally will be resolved on the day of mediation.

Emotional Advantage: Because individuals have been involved in the process and ultimate resolution, any trauma is greatly reduced, especially given that litigation can cause an ongoing stress for months even years.

Mediation is personally satisfying: It is lead by the participants with the guidance of a professional mediator.  Individuals are involved in determining the process and the resolution. This means that the participants are at the heart of the mediation of process. 

Mediation is not statutory: A decision is never forced upon the people involved.

Mediation is without prejudice: Mediation is not part of the public court and matters discussed in the meetings cannot be used in subsequent litigation.

Mediation is confidential: Matters discussed with the mediator in private sessions will remain confidential between the individual and the mediator, unless express consent is given to disclose information.

Mediation is voluntary: All participants agree to take part in the process.

Remote Mediation:

Mediation can take place remotely during the pandemic (and thereafter of course!) by using video conferencing facilities such as Zoom or Skype.  The process is the same, participants can be in breakout rooms with advisors and also come together in the main virtual meeting room. Confidentiality is assured.

Concluding remarks:

There is no doubt that mediation a very positive way of resolving disputes, especially during these tumultuous times.

Categories
Park Homes Residential Leasehold

The Tribunal Procedure (Coronavirus) (Amendment) Rules 2020 (“Statutory Instrument”) have bought about some changes to various Tribunals. In particular, to the leasehold sector the Statutory Instrument makes changes to the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013and Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010.

These changes have been made as part of emergency measures to mitigate against the impact of COVID-19 on the First-tier Tribunal (Property Chamber) (“F-tT”) and Upper Tribunal (Lands Chamber) (“UT”). They are designed to be temporary in nature during this pandemic and will be subject to review by the Tribunal Procedure Committee.

The two main effects are:

(1) Paper based decision may be at the direction of the F-tT but not the UT; and,

(2) F-tT and UT hearings will be held in private where they cannot be broadcasted or accessed by the public.

Paper based decisions:

The temporary rules allow the F-tT to make a decision which disposes of proceedings without a hearing if it is satisfied that:

(a) the matter is urgent;

(b)it is not reasonably practicable for there to be a hearing (including a hearing where the proceedings would be conducted wholly or partly as video proceedings or audio proceedings); and

(c)it is in the interests of justice to do so.

The Statutory Instrument allows the F-tT to make a decision on the papers without the parties’ consent. This amendment will reduce the risk of infection between Tribunal users, HMCTS staff and the Judiciary by allowing more decisions to be made on the papers. Notably this does not apply to the UT.

Private Hearings

Both the F-tT and UT have a power to conduct remote hearings, either video or audio proceedings, in private if it is not practicable for that hearing to be broadcasted or accessed by a media representative.

Those hearings which are conducted in private must be recorded, where it is practicable, in a manner directed by the Tribunal. Therefore, it is important to note that recordings should not be made secretly.

Section 55 of the Coronavirus Act 2020 makes provision for the public to observe hearings that proceed via remote technology. This may be impracticable given that the Court or Tribunal building may not have the technology to allow for this. This would be impossible for all remote hearings to be accessed by the public through either video or audio technology. Therefore, this Statutory Instrument will allow the F-tT and UT to direct remote cases to be heard in private if they cannot be broadcasted and accessed by the public, to ensure the proper administration of justice.

Final thoughts:

The world is changing rapidly and in turn, the legal landscape will respond with various amendments. The above mentioned temporary measures are important to be aware of. The author wishes everyone is safe during these difficult times.

This was first featured on the News On the Block Website

Categories
Park Homes
Categories
Park Homes

Unreasonable conduct in the First-tier Tribunal (Property Chamber)

Categories
Residential Leasehold

1. “What is leasehold ownership?”

Leasehold ownership is more than a mere tenancy. Although like all other tenancies, such as an assured or assured shorthold tenancy, leasehold ownership is based on a lease, it is also a form of property right, which, if the lease contained no restrictions (although they always do), would give the leasehold owner exactly the same rights as a freehold owner but only for the duration of the lease, called “the term”. As with a freehold, a leasehold interest needs to be registered at Land Registry.

2. “The lease – is it important?”

The lease is a contract between the leaseholder and the landlord and governs the rights and liabilities of the leaseholder and the landlord in relation to matters such as liability for rent, repairs and service charges (the leaseholder’s contribution to the costs of maintaining and managing the building). The lease provides for any limitations or obligations as to the use and occupation of the property and how the landlord and tenant should conduct themselves towards each other and any other tenants. It is an important document and leaseholders should ensure that they have a copy and that they understand it.

The wording of leases is usually in technical language and will vary from property to property. Leaseholders who find it difficult to understand their lease should get advice from a solicitor and insist that they provide a report on its terms when they are instructed to deal with the purchase.

It is important for any intending buyer to know, among other things, what the landlord is required to do in relation to managing and maintaining the structure, exterior and common areas of the property, what the leaseholder’s obligations will be in relation to rent and service charges, and whether there are any unusual or onerous covenants in relation to the leaseholder’s use and enjoyment of the property.

It is important to note that when a flat changes hands, the seller passes on all the rights and responsibilities of the lease to the purchaser, including any future payments of service charges that have not yet been identified (subject to the laws on limitation).

3. “What should I understand before I buy a leasehold flat?”

Leasehold flats can be in purpose-built blocks, in converted houses or above commercial or retail premises. The lease will usually cover (or “demise”) everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but will not usually include the external or structural walls. Often the structure and common parts of the building and the land on which it stands will remain in the ownership of the landlord. The landlord is generally responsible for the maintenance and repair of the building but particular attention should be paid to the landlord’s responsibilities both in relation to the flat and the common parts, services and other flats in the building and how any costs recoverable are apportioned between flats. This is because the costs are recoverable through the service charges and billed to the leaseholders, and, secondly, a badly drafted lease may not make it clear exactly are the responsibilities of the landlord and the tenant. 

The landlord can be a person or a company, local authority or housing association. It is also common for the leaseholders to own the freehold of the building, through a residents’ management company, effectively becoming their own landlord. In certain circumstances leaseholders of a block of flats can apply to extend the term of their leases or to purchase the freehold from a private landlord through a nominee, generally a residents’ management company.

4. The length of the term remaining

The remaining term of the lease can be important for two reasons. First, when the outstanding term of a lease drops below 80 years, the premium to extend the lease increases because “marriage value” becomes payable. “Marriage value” in the case of a long lessee acquiring the freehold reversion of his lease is the extra value released by marrying the freehold reversion with the existing lease. In a lease extension the marriage value is the difference in value between existing interests of the long lessee, freeholder and any intermediate leases and their combined value after the grant of the extended lease. It is more costly to extend a lease once the term drops below 80 years.

Second, as a lease nears the end of its term its value starts to drop markedly. This can be overcome by applying for a lease extension or collective enfranchisement (purchasing the freehold) but, unless the seller of the flat has assigned their existing right to apply to the buyer, the buyer will have to wait until he or she has owned the lease for at least 2 years before becoming entitled to serve the requisite notice (known as a “Section 42 Notice”). It is, of course, necessary for the seller to have owned the flat for at least two years or to have taken an assignment from their previous seller for them to have a right to assign. The assignment has to be made before or at the same time as the lease is legally assigned. It cannot be done after.

5. Service charges?

As explained above service charges are generally payments by the leaseholder to the landlord for all the services the landlord provides. Usually, such charges vary from year to year according to the cost of the services provided 

What can (and cannot) be charged by the landlord and the proportion of the charge to be paid by the individual leaseholder will all be set out in the lease. Most modern leases allow for the landlord to collect service charges in advance, repaying any surplus or collecting any shortfall at the end of the year. This is often referred to as a balancing charge.

Sometimes a lease provides for a “fixed service charge”, that is a charge set at a fixed amount, which is not related to the cost actually expended. Normally, such charges are index-linked to inflation or the cost of living but sometimes a lease will provide for them to simply to increase over time.

The landlord can only recover variable service charges to the extent that the costs are reasonable. Leaseholders have powerful rights to challenge charges they feel are unreasonable by applying to a tribunal (the First-tier Tribunal (Property Chamber) in England and the Leasehold Valuation Tribunal in Wales). There are restrictions on a landlord’s ability to forfeit a lease while a service charge dispute is outstanding. Apportionment of service charges between flats is harder to challenge if the apportionment is fixed in the lease.

Fixed service charges cannot be challenged in this way and from time to time leaseholders have been shocked when they failed to consider not only what the fixed service charge is at the time of purchase but to what it will rise in future.

When considering the purchase of leasehold flat, it is important to find out, for personal budgetary purposes, what the current and future service charges are likely to be. Buyers should also check if there is a reserve fund, and what plans there are for major works that could affect the service charge in the next few years after your purchase.

6. What are the major works and why should I be worried about this?

The Landlord is required to consult the leaseholder in a prescribed form if he/she enters into an agreement with a contractor/ supplier for specified works where a charge of at least £250.00 is payable by at least 1 leaseholder.

If the Landlord does not serve the proper notices and fails to follow the consultation procedure the tenant’s liability to pay these charges is limited to £250.00. The notice requirements are governed by legislation.

Leaseholders should be aware that the tribunal has a power to dispense with the requirements of the consultation procedure The power of dispensation had been most often used where there is an emergency and the consultation procedure was not appropriate but a recent decision of the Supreme Court has made it more likely that dispensations will be granted in future.

7. Should I buy a leasehold flat?

Property law in England and Wales effectively requires that flats be leasehold, although some leasehold flats are now sold with a share of the freehold, through participation in a residents’ management company.

However, owning a leasehold flat should not be a concern as long as you know and appreciate your rights and obligations and, like any property purchase, get appropriate advice when considering a purchase.

This is an overview and should not be regarded as a complete or definitive description of the relevant law. The law pertains to the English and Welsh jurisdiction only. If you are in any doubt about your rights and duties then seek specific advice.

This article was written with Rawdon Crozier and first featured in the Negotiator Magazine.