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Published online by Cambridge University Press: 02 January 2018
In October 1985, the Nugee Committee produced a well-received Report. It drew attention to a number of diverse problems relating to the management of leasehold flats, most especially those faced by lessees. These were said to include excessive delays in carrying out repairs, complaints as to the level of service charges and difficulties in the enforcement of lessors' obligations. It goes without saying that the slow and inevitable structural deterioration which inevitably takes place as a building ‘ages’ will risk being accelerated by any dilapidations caused by the neglect ofthe lessor regularly to comply with his repairing obligations. In this and similar circumstances of mismanagement (such as a failure regularly to collect service charges) the value, credit-worthiness and saleability of the lessees' interests are all put at risk.
2. ‘The Management of Privately Owned Blocks of Flats’. See passim Hawkins [1986] Conv 14.
3. Which originated in the recommendations of the Leasehold Committee Final Report 1950 (Cmnd 7982) esp paras 88–101.
4. See, eg the minimum residence qualification imposed on the lessee by the 1967 Act, s 1(1)(b), which originally required residential occupation for five years (continuously or within a ten year period) but which was reduced in both cases to three years by the Housing Act 1980, Sch 21, para 1(1).
5. 1987 Act, s 29(2). Alternatively, compulsory purchase may be sought where a management order has been in force for three years (s 29(3)).
6. See Percival (1988) 50 MLR 97, 104.
7. But not, apparently, an immediate certainty. On 12 July 1990 Lord Mackay (Hansard cil 1599-1600) indicated that legislation to implement the commonhold proposals would be introduced ‘as soon as parliamentary time permits’; but according to The Times, 1 November 1991, there will be no legislation this side of an election.
8. See ‘Commonhold: Freedhold Flats’ Report of a Working Group (1987) Cm 179 and the government's ‘Commonhold: a Consultation Papers’ (1990) Cm 1345. This latter contains the abrupt but revealing statement that ‘most of the scheme should be seen as settled policy, given the work which has gone into designing the scheme’ (para 1.6).
9. See passim Percival (1988) 50 MLR 97; Rogers [1988] Conv 122.
10. Lessess of non-residential flats are excluded by s 1 (3), notably where any part of the premises is intended to be or is occupied for non-residential purposes and the internal floor area of these parts exceeds 50% of the premises as a whole.
11. Provision is made by s 2(2) for the case where the immediate lessor holds a lease for less than seven years.
12. See s 4(2)(i); a landlord company is similarly free to dispose of its interest to a new company which results from a reorganisation (s 4(2)(1)).
13. As defined by s 3(1), notably excluding business tenants to whom Part II of the Landlord and Tenant Act 1954 applies.
14. For the differences at common law and equity between an option to purchase and a right of pre-emption, see notably Pritchard v Briggs [1980] Ch 338 at 393G394F (Goff LJ).
15. Since a right of pre-emption is not a continuing offer to sell, but a mere right of first refusal (see, eg Manchester Ship Canal Co v Manchester Racecourse Co Ltd [1901] 2 Ch 37 at 50–51 (Vaughan Williams LJ) and City of Halifax v Vaughan Construction Co Ltd [1961] SCR 715 at 720) it must be assumed that the statutory right is in the nature of a hybrid.
16. Landlord and Tenant Act 1987, s 6.
17. 1987 Act, ss 7 to 10.
18. See 1987 Act, ss 11 and 12. Some of the difficulties with these provisions are discussed later in this paper.
19. As from 1 February 1988: Landlord and Tenant Act 1987 (Commencement No 1) Order 1987, SI 1987/2177.
20. Denetower Ltd v Toop [1991] 3 All ER 661 at 668B.
21. 30 Upperton Gardens Management Ltd v Akano [1990] 2 EGLR 232 at 236K.
22. Cousins v Metropolitan Guarantee Ltd [1989] 2 EGLR 223 at 225E.
23. Denetower Ltd v Toop, supra, at 6635-664A (Browne-Wilkinson V-C).
24. To adopt the term used to describe the transferee in ss 11(1) and 12.
25. This provision imposes a duty on a new landlord to inform the lessees in writing of the assignment to him of the former lessor's interest.
26. Which will have to comply with s 47 of the 1987 Act, where it is in writing.
27. The lessees have a period of two months running from the date of service of a notice unders 3 of the Landlord and Tenant Act 1985 (1987 Act's 11(2)(a)). There is no reason to think that this will not be strictly construed.
28. Per Asquith LJ in Cunliffe v Goodman [1950] 2 KB 237 at 254, CA.
29. Cf Capital Gains Tax Act 1979, s 27(1), where the relevant date for a ‘disposal’ is the date of making the contract, even if it turns out to be unenforceable for want of form: see Thompson v Salah [1972] 1 All ER 530.
30. Wilkins v Horrowitz [1990] 2 EGLR 217. The risk is of time running as from the date of the first ‘disposal’, thus depriving the tenants of a right to serve a purchase notice once aware of the last disposal only in a chain.
31. Cf the difficulties discussed in Oughtred v IRC [1960] AC 206 at 226-228 (Lord Radcliffe) and 241-243 (Lord Jenkins).
32. Tyson v Carlisle Estates Ltd [1990] 2 EGLR 229 at 230E.
33. As defined by s 5(6), which uses a complex formula related to the voting power of ‘qualifying tenants’.
34. By analogy with notices under Landlord and Tenant Act 1954, Part 11: see, eg Dodds v Walker [1981] 1 WLR 1027, [1981] 2 All ER 609, HL.
35. See s 5(6)(a)(ii) ands 11.
36. See esp s 12(2), which relates a purchase notice to a s 11 notice.
37. By analogy with Denetower Ltd v Toop, supra.
38. The same would of course apply to a purchase notice under s 12.
39. See Tailby v Official Receiver (1888) 13 App Cas 523 at 546 (Lord Macnaghten); also Wolverhampton and Walsall Railway Co v London and North Western Railway Co (1872) LR 16 Eq 433 at 438–439 (Lord Selborne LC).
40. See Howard v Miller [1915] AC 318 at 326 (Lord Parker).
41. Wilkins v Horrowitz [1990] 2 EGLR 217 at 222M.
42. See Cousins v Metropolitan Guarantee Ltd [1989] 2 EGLR 223 and other decisions discussed below.
43. To be known as a ‘leasehold valuation tribunal’ (s 13(5)). Applications to such tribunals are to be in the Form prescribed by Rent Assessment Committee, etc Regulations 1987, SI 1987/2578. As at January 1992, despite the enabling power of s 54(3)(a), no other prescribed forms of notices had been laid down.
44. Denetower Ltd v Toop, supra, at 669G.
45. In, eg Wilkins v Horrowitz, supra, a jurisdiction to determine a question of law, viz, the validity of a purchase notice, was assumed by a tribunal and in Cousins v Metropolitan Guarantee Ltd [1989] 2 EGLR 223 at 225E, the London Rent Assessment Panel said that it found the provisions of the Act difficult to construe (emphasis supplied).
46. Cf R v Rent Officer for London Borough of Camden. exp Ebiri (1980) 257 EG 605 at 605–606 (Donaldson J); also R v Fulham, Hammersmith and Kensington Rent Tribunal, ex p Zerek [1951] 2 KB 1 at 13–14 (Devlin J), dealing with Landlord and Tenant Act 1949, s 1; but see now Rent Act 1977, s 14].
47. Interpretation Act 1989, s 6(c).
48. Denetower Ltd v Toop, [1991] 3 All ER 661 at 667H.
49. Methuen-Campbell v Walters [1979] QB 525, esp 535C–536E (Goff LJ), concerned with Leasehold Reform Act 1967, s 2(3). Cf also Trim v Sturminrter Rural District Council [1938] 2 KB 508 at 5155 16 (Slesser LJ); also William Hill (Southern) Ltd v Cabras Ltd [1987] 1 EGLR 37.
50. And by this route, incorporated into s 1(2)(b), which is part of the ‘premises’ which the landlord cannot dispose of in contravention of the 1987 Act. It is admitted that this is a circuitous path.
51. Landlord and Tenant Act 1987, s 60(1).
52. 30 Upperton Gardens Management Ltd v Akano [1990] 2 EGLR 232; the point was not taken in Denetower Ltd v Toop, supra.
53. See s 9(9): ‘the person… nominated… by the requisite majority of qualifying tenants’.
54. Both provisions refer specifically to ‘a building’, and although no doubt the singular includes the plural, it is hard to spell out of this the extra words ‘a building scheme’.
55. Subject to the reservations mentioned earlier as to its right to assume jurisdiction on so difficult a point of law.
56. Denetower Ltd v Toop, supra, at 666F-J.
57. By Housing Act 1988, Sch 13, para 2(2).
58. Denetower Ltd v Toop, supra, at 669B.
59. A point recognised by Wilkins v Horrowitz [1990] 2 EGLR 217 at 222E.
60. 30 Upperton Gardens Management Ltd v Akano, supra.
61. Cf the test applicable to rent review notices in, eg Nunes v Davits Laing & Dick [1986] 1 EGLR 106 at 107J-K.
64. Gregory v Saddig [1991] 1 EGLR 237 at 241D-H.
63. Cousins v Metropolitan Guarantee Ltd [1989] 2 EGLR 223, esp 225M; also Venus v Khan [1990] 2 EGLR 237; Sullivan v Safeland Investments Ltd [1990] 2 EGLR 227 (where a recomputation of the price by the tenants' valuer was, accordingly, rejected); also Newman v Kay [1991] 2 EGLR 237.
64. 30 Upperton Gardens Management Ltd v Akano, supra.
65. Wilkins v Horrowitz [1990] 2 EGLR 217.
66. Cf, eg Furniss v Dawson [1984] AC 474; for a notorious example, also, Black Nominees v Nicoll [1975] STC 372.
67. See also passim the assessments of the commonhold proposals in [1991] Conv 70 and 170.
68. In this connection, the recent attempt rapidly (and in an ill-considered manner) to reform the law in relation to rights of access to neighbouring land, which failed with the end of session ‘loss’ of the Rights of Access to Neighbouring Land Bill, criticised by J. E. Adams (1991) 37 EG 130, should provide an object-lesson.