As laws around property get tighter, we take a look at eight key property management legal cases and their outcomes over the last few months, and what this might mean for block managers.
Case 1 – what counts as a landlord fixture?
Thierry Fivaz V Marlborough Knightsbridge Management Ltd centred around an appeal by a landlord that a lessee who had replaced the entrance doors to his flat without consent was in breach of his lease. Although the First-tier Tribunal (FTT) had found in his favour, on appeal the Upper Tribunal overturned the decision and sided with the lessee. This is key because it centres around the definition of ‘fixtures’ and ‘chattels’ and could apply to the repairs and maintenance of things that affect communal areas.
Case 2 – disputed HMO licensing classifications
This appeal, Hastings Borough Council v Turner, regarded the classification of HMOs. Although the building in question, which contained 5 self-contained leasehold flats, was in an area designated by the Council as subject to additional HMO licensing requirements, the FTT ruled that the Council had not complied with the appropriate Building Standards and therefore it should be defined as an HMO. Though overturned on appeal, this should serve as a warning to block managers to err on the side of caution when it comes to acquiring HMO licenses. The rules are only going to get tighter.
Case 3 – the rules around Airbnb
Airbnb is an extremely contentious issue in the rental world and block managers and property managers should note responses are on a case-by-case basis. In Triplerose Limited v Beattie and Beattie, the case turned on the specific wording of the tenancy agreement, which prohibited using the property as a place of business. The Upper Tribunal agreed with the leaseholder that letting the property through Airbnb did not meet this definition and therefore they were not in breach of lease. We predict loopholes around Airbnb to tighten in the future.
Case 4 – compliance and privacy issues
This complex case, Houldsworth v Barton, involved a lessee’s application to inspect the register of members of the lessee-owned management company of the building where he owned a flat. The Court of Appeal recognised that there are distinctions between the rights as a member and rights as a lessee, but they considered that in a situation where the Company was lessee-owned and controlled and exists to provide services under occupational leases, it is difficult to draw a line between matters relating to governance of the company and matters relating to management of the leasehold.
Case 5 – what constitutes ‘like for like’?
This case, Lambeth v Gniewosz, has interesting implications for repairs and maintenance issues. It concerns a Council proposal to carry out roof works on a block of flats. The works in question comprised the replacement of a zinc roof with one made of glass reinforced plastic [GRP]. Both parties agreed that the roof was seriously defective but the lessee preferred a like for like replacement of zinc over the use of GRP. The FTT found that the works would be irrecoverable from the lessee as they were in breach of the lease. The council successfully appealed the decision on the grounds that the FTT did not sufficiently explain its conclusion that the replacement of the roof in GRP would be a breach of covenant.
Case 6 – the importance of evidencing your service charges
In Prescot Management Company v Laskar, the Upper Tribunal found in the favour of the lessee in a service dispute charge because the FTT had not objectively applied the test for unreasonable behaviour in the dispute. Service charges are a common pain point between landlords and lessees – this case is a reminder that the reasoning behind service charges should be transparent and all dealings with lessees should be properly documented.
Case 7 – swift repairs and maintenance are vital
This appeal, Sheffield v Hussain, centred on the timeliness of remedial repairs work done on two HMOs. The FTT had initially reduced the fines due to the repairs carried out after the event, but this decision was not upheld in the Upper Tribunal (UT). The ruling clearly proves that no allowances will be made for repairs that are not carried out in adequate time.
Case 8 – a spotlight on developers
Although there’s a media storm about the vast lack of adequate housing available, in Alexander Devine v Millgate Homes, a developer sought to go around restrictive covenants on the land they owned under the grounds that it was in the public interest to allow the houses to be occupied. The case was dismissed, indicating that rules need to be followed and due process followed regardless of the shortages.
These cases were discussed in more detail in ARMA's six-monthly overview newsletter for members (December 2020). To access the publication, ARMA members can log into the Members' Area on www.arma.org.uk.
A webinar we held in August 2020 titled What Should Block Managers Do in Respect of EWS1 Forms? sought to answer a range of questions about the EWS process and tackle the problems the industry was experiencing with the EWS1 form with a panel of sector leaders from ARMA, IRPM, PM Legal Services and RICS.
The discussion was summarised in the resulting eBook Breaking Down Barriers: The EWS1 Form.