The blog is now closed down over Easter. Next post will be Tuesday.Tessa
Maunder Taylor v SHG-SH20 Ltd 3CL02066 is one of the more interesting (and potentially, important) county court cases I’ve come across recently (transcript not publicly available; I’ve got one and am trying to persuade the Landlord and Tenant Reports to publish it). For reasons that will become clear, it has wider significance for LVT/FTT cases and although only a county court judgment, it is by HHJ Walden-Smith who is herself a judge of the UT(LC); not binding authority, I accept, but persuasive and important.
The case concerns the powers of the FTT/LVT under the Landlord and Tenant Act 1987. As you may know (and, if you don’t know, this excellent book will explain it to you), if you are a leaseholder of a flat and your landlord (or other manager, e.g. RMC under a tri-partide lease) fails in its management obligations, then the Tribunal can appoint an independent third party to manage the building in place of the landlord/other manager. It is a “for cause” power (to be contrasted with the no fault RTM process under CLRA 2002) but, potentially, very powerful. The Tribunal can, for example, grant the manager powers which go far beyond the terms of the lease and can even allow him/her to manage property which is not demised to any leaseholder nor comprised in any common parts.
That is what had happened in this case. As you can see from the FTT decisions (here and here), the Tribunal was satisfied that there had been some serious management failings by SHG-SH20 Ltd and exercised its powers under the 1987 Act to appoint a manager (Mr & Mr Maunder Taylor). The order provided, as one might expect, for the current manager to deliver up documents necessary for the management of the building.
The manager took the view that the landlord had not complied with this requirement and issued proceedings in the county court to seek to compel compliance with the order of the FTT.
Pausing here for a moment, I understand why they did this. Under s.24A(4), 1987 Act, the court was empowered to enforce orders of the LVT (as it was then). But that power was repealed in 2003 (England) and 2004 (Wales). CPR 70, however, retains general rules relating to enforcement of orders of tribunals by the court.
But HHJ Walden-Smith thought the manager had simply got the wrong end of the stick. The appropriate course was to apply back to the Tribunal for directions as to what to do and, if necessary, to have the Tribunal vary the order by adding a penal notice to it. Yes, you have read that correctly. The Tribunal can issue a penal notice.
In the circumstances therefore, in my judgment, it is quite clear that the appropriate body to deal with this matter is the… Tribunal. If there is a wish – and indeed if it is appropriate at this stage – to apply for a penal notice to be attached to the order, then that is a matter for the… Tribunal to deal with. The… Tribunal has power to do so pursuant to the provisions of section 24 of the 1987 Act…
If the Tribunal was to add a penal notice, then, and only then, could the county court become involved by way of committal proceedings.
If there is then a failure of the defendants to comply with the order and if the penal notice is attached, then of course at that stage the appropriate forum for the committal proceedings… would be the county court.
And so there we have it. The FTT can make penal orders under s.24, 1987 Act. That, I confess, came as a bit of a surprise to me but, perhaps it shouldn’t. After all, we know from the decided cases that the powers under s.24 are broad and are designed to ensure that a coherent scheme of management exists (Maunder-Taylor v Blaquiere  EWCA Civ 1633; Cawsand Fort Management Co Ltd v Stafford  EWCA Civ 1187) and, if that requires a penal notice, why not?
It might also be possible, I suppose, to get the same result under the FTT procedure rules. Rule 8(5) lets the FTT transfer the case to the UT to deal with someone who has refused to comply with an order, inter alia, to produce a document. The UT has power (s.25, Tribunals Courts and Enforcement Act 2007) to punish such disobedience as if it were a contempt of court (see also MD v Secretary of State for Work and Pensions (Enforcement Reference)  UKUT 202 (AAC)). So long as someone (whether FTT or UT) has attached a penal notice, then the UT could enforce it (and, interestingly, MD casts no doubt on the proposition that the FTT can make a penal notice).
The Property Ombudsman is calling for the introduction of a new version of the much-derided Home Information Pack, abandoned by the coalition government four years ago.
Christopher Hamer says “consumers would be better protected by a specific requirement that relevant information about all aspects relating to a property was disclosed in a formal document prepared by the seller.”
He says that unlike the HIP, such a document should include a home condition report with information such as when the heating was installed, if the property has been subject of a flood and how often, to what depth, proximity of flood plains, subsistence issues, proximity to schools, prisons or graveyards and so on.
“In my view it is right that the seller provides that and it is right that the buyer has everything that they need to know readily presented to them. For agents, it would not relieve them of their responsibilities under CPRs but such a document would certainly assist in them being aware of whether they need to draw any extra information to the buyer’s attention,” says Hamer.
Despite housing having become a significantly higher profile subject than in recent years, and with a general election only a year away, so far no political party has suggested a return of the Home Information Pack or any version of it.
- Estate Agent
The organisation that calls itself the UK’s first ‘hybrid’ agency, chaired by Poundland founder Steve Smith, has received £660,000 of crowdfunding investment.
EstatesDirect.com listed on CrowdCube in March with an initial target of £250,000. Within 10 days of the pitch going live the company hit the target and extended its pitch.
The firm, which currently has 14 franchises across the UK, has also received more than 125 requests to become a franchisee or licensee since listing on CrowdCube.
EstatesDirect was founded by online dating entrepreneur Darren Richards along with businessman Ben Grove. It describes itself as combining an online estate agency model with regional property experts who meet customers face-to-face.
The business launched in 2012 as a regional pilot and now says it wants to become “the UK’s largest, single branded, personal estate agency network.”
“The reason so many people have invested is because EstatesDirect is not just another online agency. We have franchised businesses, licensees and local agents, who provide the expertise and personalised service of a high-street estate agent,” says Smith.
EstatesDirect uses the traditional portals to market properties for sale from £195 and to advertise homes to let from £45. The firm says it has marketed, sold and let more than 450 properties in the Midlands during the past two years.
- Estate Agent
- Online Agents
The north-south divide is alive and well with the rate of home repossessions in 2013 being 44 per cent higher in northern England than in the south.
Research from e.surv chartered surveyors - analysing court-ordered repossessions in England and Wales in 2013 broken down by post code - shows that there were 5.6 repossessions per 1,000 households in the north.
This is 44 per cent higher than the 3.9 repossessions per 1,000 households in the south.
However, both figures show a significant improvement on 2012 levels which were 6.3 repossessions per 1,000 households in the north and 4.4 in the south.
The south west of England historically has the lowest number of court-ordered repossessions, accounted for by its generally older and more affluent population.
The worst five repossession postcodes in 2013 were:
Oldham 8.6 per 1,000 households (747 in total)
Romford 7.8 (754)
Bradford 7.4 (835)
Wigan 7.4 (460)
Blackpool 7.0 (477)
The most ‘improved’ postcodes in 2013 - not necessarily the absolute lowest but those showing the biggest improvements on 2012 - were:
EC London 1.0 per 1,000 households
“At some point soon the Bank of England may choose to raise the base rate. A higher base rate will translate into higher repayments for many, which could tip a whole host of borrowers into the red. The base rate rise may cause repossessions to temporarily bounce back,” warns e.surv director Richard Sexton.
- Estate Agent
A specialist property law firm is warning agents that they should expect delays to be caused by the Mortgage Market Review, which comes into effect in 10 days time.
DC Law says that while lenders update their systems and train their staff to reflect the new MMR requirements, estate agents and would-be buyers will suffer slower processes.
“Solicitors are already experiencing high volumes of transactions caused by the steep upturn of demand. The implementation of MMR is adding to this workload. Where mortgage offers have already been issued, any change in circumstances could create further delays while the borrower goes through the new processes,” says Beth Rudolf, DC Law’s managing director.
“There is also the added risk that the longer the home purchase takes, the more likely the chances of the seller or the buyer pulling out,” she warns.
It’s hard to under-estimate the change that lenders will undergo thanks to MMR.
For the first time they will be regarded as fully responsible for assessing whether the customer can afford the loan, and they will have to verify the customer's income. They can still choose to use intermediaries in this process, but lenders will remain responsible.
Lenders will still be allowed to grant interest-only loans, but only where there is a credible strategy for repaying the capital.
There are transitional provisions in the MMR that allow lenders to provide a new mortgage or deal to customers with existing loans who may not meet the new MMR requirements. In these cases the borrowing will not be able to exceed the amount of their current loan, unless funding is required for essential repairs.
The decision on whether or not to lend in these cases will remain with the lender.
On the basis of trials undertaken so far, this may mean two interviews for some borrowers - who of course may then be turned down anyway - so agents are gearing themselves up for slower completions from next month onwards.
Whether these more complicated processes will speed up over time remains to be seen.
- Estate Agent
- DC Law
Agents may want to emphasise the merits of home ownership to young people this Easter, as a fifth of those aged 23 to 27 have no desire to own a property, according to an attitudes survey by the Halifax.
The first Halifax Generation Report back in 2011 described young people who wanted to buy but couldn’t afford to; three years on the latest survey, out today, shows that the love affair with ownership appears to be on the wane.
The 2014 report, produced for Halifax by the National Centre for Social Research and involving responses from 32,000 people, reveals that:
- 20 per cent of 23-27 year olds have no desire to own a home;
- 48 per cent believe Britain will become a nation of renters within the next generation;
- 46 per cent agree Britain is becoming more like Europe, where renting is more common;
- 86 per cent of renters refuse to sacrifice the quality of accommodation they currently live in to reduce the rent they pay in order to save for a deposit
- 57 per cent of would-be first time buyers would like to save but claim to not have any spare cash that they could save.
“We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration simply to live in one. People are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people,” says Halifax spokesman Craig McKinlay.
- Estate Agent
- house price
If agents in London have witnessed big price rises so far, they’ve seen nothing yet according to consultancy PwC - the £500,000 average home will be here by Christmas.
PwC has extrapolated data released earlier this week by the Office for National Statistics which shows that average house prices in the UK grew by 9.1 per cent between February 2013 and February 2014.
In London the growth rates were almost double that level - growing by 17.7 per cent in the same period.
Now the consultancy says by the end of 2014 the average property in the UK could be worth around £270,000 and in London it will be an eye-watering £510,000.
The good news for prices outside of London is that PwC thinks such increases are sustainable. This is because the rises are in line with a normal cyclical recovery after a period of subdued housing markety activity. Other recent data such as increases in house building backs up the consultancy’s finding.
But PwC senior economist William Zimmern warns that the London picture is more mixed.
“Concerns of overheating in London may grow if house price to earnings ratios and mortgage repayments as a portion of income continue to rise rapidly and diverge from the rest of the UK."
- Estate Agent
- House Prices