1. Understanding your rights Service Charges Ealing Council Leaseholders Association 29 February 2012 Dona Awano

2. LEASE and what it does LEASE is an NDPB providing free initial advice on residential leasehold law for England and Wales We run training, outreach events and on location advice surgeries We provide input to government through working parties and consultations www.lease-advice.org2

3. How we deal with enquiries www.lease-advice.org3

4. Who we help www.lease-advice.org4

5. Areas of advice The leasehold system − The duties and obligations of the landlord and leaseholder Service charge − Statutory consultation on charges arising from works or contracts − Right to challenge service charge − How to apply to the Leasehold Valuation Tribunal (LVT) Rights and information − Summaries of service charge and accounts − Right to inspect documents − Information on landlord www.lease-advice.org5

6. Areas of advice Right to manage − Statutory right for leaseholder to take over the management of the building Extending the lease − Statutory rights and procedures Buying the freehold − Statutory rights for leaseholder of houses − Collective enfranchisement for leaseholder of flats − The Right of First Refusal www.lease-advice.org6

7. Areas of advice Management issues − What a managing agent does and how to appoint one − Forfeiture − Administration charges − Appointment of a manager by the LVT www.lease-advice.org7

8. Additional roles Chairing − Leasehold Reform Working Party − Social Sector Working Party Participating in government advice groups − Department for Work and Pensions − Law Commission Responding to consultation paper on residential leasehold Cooperating with other organisations in producing materials e.g. ARMA, ARHM and AIMS Staging annual conference and seminars www.lease-advice.org8

9. What is a lease A document setting out the terms for the occupation of the premises by the tenant A contractual agreement between the parties Capable of assignment www.lease-advice.org9

10. Problems with leasehold Lack of understanding of the nature of the tenancy Different perspectives of the parties Diminishing asset www.lease-advice.org10

11. Rights and obligations The contractual relationship − Specific terms on the lease − Implied terms Common law Statutory requirements www.lease-advice.org11

12. Statutory Authority Landlord and Tenant Act 1985 Landlord and Tenant Act 1987 Commonhold and Leasehold Reform Act 2002 Housing and Regeneration Act 2008 www.lease-advice.org12

13. Crucial questions Are costs payable Are costs reasonable LVT vs. County Court Section 27A LTA 1985 www.lease-advice.org13

14. The service charge demand Section 47 and 48 LTA 1987 − Must be accompanied by the summary of the rights and obligations, since October 2007 − Administration charges must also be accompanied by similar summary www.lease-advice.org14

15. Construction of lease Entitled to recover Improvement vs. repairs Management costs Legal costs − Section 20C LTA 1985 Sinking fund Sweeper clause www.lease-advice.org15

16. Machinery in the lease Advance payments − When due Certification − By whom Audited accounts required Inspection of documents Sections 21 and 22 of LTA1985 www.lease-advice.org16

17. Historic service charge Section 20B LTA 1985 − City of Westminster vs. Hammond − Limitation Act 1980 Rent −6 years Service charges −12 years www.lease-advice.org17

18. Statutory consultation Section 20 LTA 1985 − As amended by Section 151 of the CLRA 2002 − 3 stage process − Applicable to QLTA − LVT can determine www.lease-advice.org18

19. Right to buy Section 125 notice − Payment options − Various public sector landlords will have payment options www.lease-advice.org19

20. Continental vs. White Historic neglect Set - off www.lease-advice.org20

21. Quantum Reasonably incurred Reasonable standard Advance payments reasonable www.lease-advice.org21

22. Decent homes National strategy for renewal of local authority housing designed to deal with disrepair issues Certain requirements to be met by 2010: “all property the Decent Homes Standard. To meet the standard, property must have reasonably modern facilities, be warm and weatherproof.” (DirectGov website) www.lease-advice.org22

23. Decent homes Huge service charge demands for local authority lessees Huge number of enquiries for LEASE LVT applications Limited if within reference period for RTB leases Has to be recoverable under the lease www.lease-advice.org23

24. Assistance for decent homes Landlord may provide a loan Mandatory and discretionary directions Buy – back Exchange sale scheme www.lease-advice.org24

25. Questions? The Leasehold Advisory Service 020 7383 9800 info@lease-advice.org www.lease-advice.org Maple House, 149 Tottenham Court Road London W1T 7BN www.lease-advice.org25