Housing and Planning Bill

Lord Young of Cookham Excerpts

Thursday 17th March 2016 Lords Chamber

Moved by

[Lord Young of Cookham]

84BA: After Clause 122, insert the following new Clause—
“Administrative costs
(1) A tenant may make an application for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before a court, residential property tribunal, leasehold valuation tribunal, or First-tier Tribunal or Upper Tribunal, or in connection with arbitration proceedings, are not to be regarded as costs to be taken into account in calculating the amount of any administration charge, within the meaning of paragraph 1(1)(d) of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, payable by the tenant.(2) The application shall be made—(a) in the case of court proceedings, to the court before which the proceedings are taking place, or, if the application is made after the proceedings are concluded, to a county court;(b) in the case of proceedings before a residential property tribunal, to a leasehold valuation tribunal;(c) in the case of proceedings before a leasehold valuation tribunal, to a tribunal before which the proceedings are taking place, or, if the application is made after the proceedings are concluded, to any leasehold valuation tribunal;(d) in the case of proceedings before the First-tier Tribunal, to the tribunal;(e) in the case of proceedings before the Upper Tribunal, to the tribunal;(f) in the case of arbitration proceedings, to the arbitral tribunal, or, if the application is made after the proceedings are concluded, to a county court.(3) The court or tribunal to which the application is made may make such order on the application as it considers just and equitable in the circumstances.”

[Lord Young of Cookham (Con)]

My Lords, I shall speak to Amendment 84BA, which is in my name, and to Amendment 84G. These are, I hope, noncontroversial amendments which would level the playing field—which is currently tilted in favour of freeholders—for leaseholders.

Amendment 84BA addresses an irregularity concerning the consideration of recovery of a landlord’s costs from leaseholders as administrative charges. At the moment, a landlord can recover their costs for appearing before a tribunal or court as an administration charge where a covenant exists in the lease, without the leaseholder being able to ask the tribunal or court to consider the reasonableness of the costs, which they are able to do when the costs are recovered via the service charge. This is potentially unfair and can discourage leaseholders from exercising their rights to seek a determination that service charges or other payments are payable and reasonable, where they are aware that the landlord can recover his costs in this way through this loophole. The proposed amendment would enable the court or tribunal to consider on application whether it is reasonable for a landlord to recover all or part of the costs of appearing before it as an administration charge, where the lease allows this. At the moment, that cannot be done.

This amendment would therefore be similar to the existing legislation which enables tribunals and courts, on application by a tenant or leaseholder, to limit a landlord’s costs of appearing before a court or tribunal where they seek to recover them through service charges. This is not to say that a landlord should not be able to recover his costs, but rather that a tribunal or court should be able to consider whether it is reasonable so to do.

Amendment 84G would give leaseholders the right to obtain from their landlord contact information for other leaseholders in a shared block, for the purposes of obtaining statutory recognition of a tenants’ association. This may be relevant to some of the issues raised by my noble friend Lady Gardner. To put this in context, the Landlord and Tenant Act 1985 allows a tenants’ association made up of qualifying tenants to seek statutory recognition. Such recognition provides the association with additional rights to those enjoyed by individual leaseholders. Because this is a collective right, the relevant guidance suggests that a specific proportion of qualifying tenants should support the application before recognition of the tenants’ association can be sought, which means that leaseholders have to contact other leaseholders to get the necessary proportion.

However, it is apparent that leaseholders are finding it increasingly difficult to obtain the numbers needed to seek recognition, particularly where they require contact information about absent leaseholders. This will not surprise my noble friends, given the well-documented increase in absent leaseholders and the growth of subletting. Putting a note through a letterbox, for example, is not a satisfactory way of achieving contact because there are no guarantees that the subtenant will pass the note on to the landlord. There is also no obligation on the landlord to pass on information. This means that a number of qualifying tenants are not given the opportunity to take part in the formation of an association, which is frustrating and potentially weakens the ability of leaseholders to exercise their statutory right.

This amendment to legislation which I fear I put on the statute book myself some 30 years ago—I clearly omitted to make it absolutely perfect—would address the problems outlined by requiring a landlord to supply relevant information with individual leaseholders’ consent within a given timeframe, thus helping those tenants seeking to exert their collective rights. I beg to move my first amendment.

--- Later in debate ---

[Viscount Younger of Leckie]

I would not put it in quite that way. There are no plans to make changes, but the noble Lord will know that we are talking about properties that are considered to have a long historical association with the Crown. I will investigate further and if I can furnish the noble Lord with more information, I will certainly do so in the form of a letter.

[Lord Young of Cookham]

My Lords, I am grateful to everybody who took part in this debate. In response to the noble Lord, Lord Berkeley, let me say that, indeed, I do not remember the background to a Written Parliamentary Question that I answered in 1992. My general impression was that the Duchy agreed voluntarily to abide by what was in the legislation. That was the background, which I think was broadly confirmed in the exchange, although there might be some minor amendments more recently. I am grateful to my noble friend for his benign response to my two amendments: the teams of Young and Younger seem to be on the same wavelength here. Against the background of the assurances that he has given, I am more than happy to beg leave to withdraw Amendment 84BA.

Amendment 84BA withdrawn.