Aviva Investors Ground Rent GP Ltd and another company v Williams and others [2021] EWCA Civ 27

Court of Appeal, 18 January 2021

The Court of Appeal has held that the First-tier Tribunal has jurisdiction to determine the service charge percentage payable in residential long leases, where the Landlord has the ability to vary the percentages payable.

A group of leaseholders lived in a mixed-use block of flats and their leases provided for the apportionment of three different categories of service charges – insurance costs, building services costs, and estate services costs – using three fixed percentages. A clause in the leases gave the Landlord the power to amend the percentages. The leaseholders issued proceedings in the First-tier Tribunal to challenge the service charges, claiming that incorrect percentages had been applied for several years and that the clause allowing the Landlord to alter the percentages was void in accordance with section 27A(6) of the Landlord and Tenant Act 1985.

The First-tier Tribunal dismissed the leaseholders’ claim, approving the approach taken by the Landlord; however, the leaseholders subsequently (and successfully) appealed to the Upper Tribunal, which held that the effect of s.27A(6) of the Landlord and Tenant Act 1985 was to void the lease clause, meaning that the Landlord could only use a fixed percentage of costs, and that the First-tier Tribunal had no jurisdiction to amend the stated percentage. The Landlord appealed.

The Court of Appeal, in allowing the appeal, held that section 27A(6) did not render the whole lease clause void, but simply provided that, in the event of a dispute, the task of determining the apportionment transferred from the Landlord to the First-tier Tribunal.

This decision will provide some comfort to Landlords with similar provisions in their leases, as it highlights that the ability to re-apportion service charges in a lease remains in place, although the power to do this resides with the First-tier Tribunal rather than the Landlord.

A copy of the judgment is here.

Croydon London Borough Council v Kalonga [2021] EWCA Civ 77

Court of Appeal, 27 January 2021

The Court of Appeal has confirmed that a flexible tenancy for a fixed term cannot be determined before its expiry, unless the landlord has included, and uses, a forfeiture clause.

A landlord (London Borough of Croydon) brought a claim for possession against a tenant (Miss Kalonga) who had held a flexible tenancy for a fixed term of five years. Two years into the term, and due to rent arrears and anti-social behaviour, the London Borough of Croydon served notice on Miss Kalonga, seeking termination of the tenancy and possession under the Housing Act 1985. However, Miss Kalonga argued that a flexible tenancy could only be terminated by forfeiture and that there was no forfeiture clause in her tenancy agreement.

The High Court dismissed London Borough of Croydon’s claim for possession, finding that, under section 82 of the Housing Act 1985, a flexible tenancy for a fixed term cannot be determined before the expiry of the fixed term for a tenant's breach, unless the landlord had the benefit of a forfeiture clause in the tenancy agreement. London Borough of Croydon appealed.

The Court of Appeal, in dismissing the appeal, confirmed that the only way to terminate the secure tenancy during the fixed term was if the tenancy agreement contained a forfeiture clause and by obtaining a termination order under section 82 of the Housing Act 1985. As the tenancy agreement did not have such a clause, the claim for possession was dismissed.

The decision is a warning for local authorities that have adopted fixed-term secure tenancies and not included a forfeiture or a break clause. A local housing authority will be unable to obtain possession within the fixed term unless the tenancy agreement includes an explicit forfeiture or re-entry clause.

A copy of the judgment is here.

Price v Mattey and others [2021] UKUT 7 (LC)

Upper Tribunal (Lands Chamber), 12 January 2021

The Upper Tribunal has held that an incorrect apportionment did not make a Landlord’s service charge demand invalid.

Ms Price was a leaseholder of a flat. The lease stated that the service charge had to be equally divided by the number of flats that the block originally contained – this was 31, meaning that Ms Price was liable for 1/31 of the service charge expenditure. However, the Landlord demanded 1/24 of all its expenditure, as it was now only managing 24 flats in the building and would be left with a shortfall if it only charged 1/31. This updated figure was not amended on the leaseholders’ leases, which continued to refer to a 1/31 share being payable. The Landlord applied to the First-tier Tribunal for a determination of the reasonableness of the service charges demanded.

The First-tier Tribunal reduced the charge to 1/31 of the service charge expenditure and held that Ms Price was liable to pay the reduced service charge. Ms Price appealed, arguing that the service charge demands were invalid because they did not comply with the lease, in that the demand was for 1/24 of the Landlord’s expenditure instead of 1/31.

The Upper Tribunal, in dismissing the appeal, held that the service demands were valid. It ruled that if a demand sought more than a Landlord was entitled to under a lease, the demands were not invalidated. The First-tier Tribunal had jurisdiction under s.27A of the Landlord and Tenant Act 1985 to permit the Landlord to recover what the lease entitled it to.

A copy of the judgment is here.

Merritt v Thurrock Council & Anor [2021] EW Misc 2 (CC)

County Court, 8 January 2021

The County Court has held that if a local council provides temporary accommodation to a homelessness applicant pending a review of its housing offer, the applicant is not protected from eviction as the property is not “let as a dwelling”.

Ms Merritt and her daughter applied to Thurrock Council for homelessness assistance. Thurrock Council accepted that Ms Merritt had a priority need under the Housing Act 1996 and consequently offered her a property. However, Ms Merritt refused the offer, claiming that it was unsuitable, and asked for a review of the decision. In the meantime, Ms Merritt was provided with temporary accommodation, which was let to Thurrock Council on a nightly basis by Midos Management Company (“Midos”). The terms of the letting stated that it was ‘temporary accommodation’ pending the outcome of the review. The review took 16 months, resulting in Thurrock Council concluding that it had offered Ms Merritt suitable housing and therefore it had discharged its duty to her. Thurrock Council subsequently served Ms Merritt with notice to quit the temporary accommodation. However, Ms Merritt refused to leave, resulting in Midos changing the locks on the front door and Ms Merritt regaining possession via the back door two days' later. Ms Merritt applied for an interim injunction to prohibit her eviction from the property, whilst Midos applied for an interim injunction to compel her to give up possession of the property.

The County Court refused Ms Merritt’s application but granted in part Midos’ application. The Court held that as Ms Merritt had refused Thurrock Council’s offer of suitable housing, she remained homeless. Thurrock Council had provided her with temporary accommodation while it carried out a suitability review, and “accommodation pending a review does not make the property a home or a property “let as a dwelling”.” The Court was satisfied that Ms Merritt was only occupying the property as a licensee of Thurrock Council and not as a tenant and that the property was not let to her as a dwelling. Consequently, she was not entitled to the protection of section 3(1) of the Protection from Eviction Act 1977. Midos’s application for an interim injunction requiring Ms Merritt to vacate the property was granted, although it was suspended until the expiry of the Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021.

The decision shows that local authorities are able to let accommodation on a temporary basis and be assured that they can recover possession without bringing possession proceedings.

A copy of the judgment is here.

Investigation into a complaint against London Borough of Wandsworth (reference number: 19 006 011)

Local Government and Social Care Ombudsman, 18 November 2020

The Local Government and Social Care Ombudsman (LG&SCO) has found that the London Borough of Wandsworth was at fault for failing to help a domestic abuse victim find safe alternative accommodation.

A single mother (Ms X) and her young child worked and went to school in a London borough (“Borough A”). Ms X had no permanent home and lived between the homes of her mother and her uncle in the neighbouring London Borough of Wandsworth. After subsequently meeting a new partner, Ms resided with him in Borough A. After suffering domestic abuse at the hands of her partner, who was arrested and remanded in custody, she made a homelessness application to Borough A. However, Borough A told her that it was not safe for her to remain in its area and that she should make an application to the London Borough of Wandsworth. She did this and explained to London Borough of Wandsworth that she and her child had to share a bedroom with her sister, that she was likely to be asked to leave within 57-90 days, and that Borough A had asked her to contact it.

London Borough of Wandsworth rejected Ms X's application stating that she was not threatened with homelessness, but subsequently issued her with a Personalised Housing Plan, which contained no future actions for the council and wrongly stated that Ms X could not register on its housing allocation scheme as she did not live in the borough. It did not investigate Ms X's homeless application, but instead encouraged her to withdraw it and apply to Borough A. Ms X complained to the LG&SCO.

The LG&SCO upheld Ms X's complaint, finding that London Borough of Wandsworth should have considered whether it was reasonable for Ms X to continue living with her mother before deciding what duty it owed her. Had it done so, it was likely that it would have found that Ms X was homeless and consequently offered her interim accommodation. It should then have decided whether it owed Ms X the main housing duty. The LG&SCO concluded that since Ms X was homeless, eligible, in priority need and not homeless through fault of her own, London Borough of Wandsworth should have accepted that it had a full housing duty to her. The LG&SCO recommended, amongst other things, that London Borough of Wandsworth place Ms X in Band A of the allocations scheme and provide her with suitable temporary accommodation in Wandsworth.

The LG&SCO's findings highlight the importance for local councils to consider the exceptional circumstances of people fleeing domestic abuse when assessing their housing needs.

A copy of the decision is here (issued on 14 January 2021).

Investigation into a complaint against London Borough of Redbridge (reference number: 18 000 313)

Local Government and Social Care Ombudsman, 2 December 2020

The Local Government and Social Care Ombudsman (LG&SCO) has found that the London Borough of Redbridge left a family in unsuitable bed and breakfast accommodation for too long.

The family was placed in bed and breakfast accommodation in the Redbridge area by another London borough, which had decided that it had no housing duty to them as the family had become intentionally homeless due to the mother (Ms X) refusing a damp and mouldy flat. Ms X claimed that the condition of the flat would have exacerbated her and her children’s respiratory conditions. However, Instead of making its own decision on whether the family was intentionally homeless, London Borough of Redbridge accepted the other London borough’s decision and decided that it did not have a housing duty to them. The family was placed in bed and breakfast accommodation for more than a year, but London Borough of Redbridge was unable to show that it had assessed the harm this caused to the family, or reviewed their situation. During this time, the family were offered both a studio flat, which would have meant Ms X and the children living and sleeping in the same room, and accommodation in the north of England or the Midlands. Ms X rejected both offers and the London Borough of Redbridge decided that it no longer had any duties to the family. Ms X complained to the LG&SCO.

The LG&SCO found that the London Borough of Redbridge could have done more to help and support the family, stating that poor living conditions had affected the children’s schoolwork and caused Ms X to suffer increased mental distress and anxiety. It had not made allowances for Ms X’s poor mental health in its dealings with her and had misinterpreted her behaviour as “being difficult”, blaming her living situation on a lack of co-operation.

The LG&SCO's findings highlight the fact that local councils should consider the impact on children of being housed in bed and breakfast accommodation, and that such placements for families should be regularly reviewed.

A copy of the decision is here (issued on 14 January 2021).