PART 2 continued CHAPTER 1 continued
(1) This section applies where a claim notice given by a RTM company—
(a) is at any time withdrawn or deemed to be withdrawn by virtue of any provision of this Chapter, or
(b) at any time ceases to have effect by reason of any other provision of this Chapter.
(2) The liability of the RTM company under section 88 for costs incurred by any person is a liability for costs incurred by him down to that time.
(3) Each person who is or has been a member of the RTM company is also liable for those costs (jointly and severally with the RTM company and each other person who is so liable).
(4) But subsection (3) does not make a person liable if—
(a) the lease by virtue of which he was a qualifying tenant has been assigned to another person, and
(b) that other person has become a member of the RTM company.
(5) The reference in subsection (4) to an assignment includes—
(a) an assent by personal representatives, and
(b) assignment by operation of law where the assignment is to a trustee in bankruptcy or to a mortgagee under section 89(2) of the Law of Property Act 1925 (c. 20) (foreclosure of leasehold mortgage).
(1) This section makes provision about the date which is the acquisition date where a RTM company acquires the right to manage any premises.
(2) Where there is no dispute about entitlement, the acquisition date is the date specified in the claim notice under section 80(7).
(3) For the purposes of this Chapter there is no dispute about entitlement if—
(a) no counter-notice is given under section 84, or
(b) the counter-notice given under that section, or (where more than one is so given) each of them, contains a statement such as is mentioned in subsection (2)(a) of that section.
(4) Where the right to manage the premises is acquired by the company by virtue of a determination under section 84(5)(a), the acquisition date is the date three months after the determination becomes final.
(5) Where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 84, the acquisition date is the date three months after the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.
(6) Where an order is made under section 85, the acquisition date is (subject to any appeal) the date specified in the order.
(1) Section 92 applies where—
(a) the right to manage premises is to be acquired by a RTM company (otherwise than by virtue of an order under section 85), and
(b) there are one or more existing management contracts relating to the premises.
(2) A management contract is a contract between—
(a) an existing manager of the premises (referred to in this Chapter as the “manager party”), and
(b) another person (so referred to as the “contractor party”),
under which the contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage.
(3) And in this Chapter “existing management contract” means a management contract which—
(a) is subsisting immediately before the determination date, or
(b) is entered into during the period beginning with the determination date and ending with the acquisition date.
(4) An existing manager of the premises is any person who is—
(a) landlord under a lease relating to the whole or any part of the premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises.
(5) In this Chapter “determination date” means—
(a) where there is no dispute about entitlement, the date specified in the claim notice under section 80(6),
(b) where the right to manage the premises is acquired by the company by virtue of a determination under section 84(5)(a), the date when the determination becomes final, and
(c) where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 84, the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.
(1) The person who is the manager party in relation to an existing management contract must give a notice in relation to the contract—
(a) to the person who is the contractor party in relation to the contract (a “contractor notice”), and
(b) to the RTM company (a “contract notice”).
(2) A contractor notice and a contract notice must be given—
(a) in the case of a contract subsisting immediately before the determination date, on that date or as soon after that date as is reasonably practicable, and
(b) in the case of a contract entered into during the period beginning with the determination date and ending with the acquisition date, on the date on which it is entered into or as soon after that date as is reasonably practicable.
(3) A contractor notice must—
(a) give details sufficient to identify the contract in relation to which it is given,
(b) state that the right to manage the premises is to be acquired by a RTM company,
(c) state the name and registered office of the RTM company,
(d) specify the acquisition date, and
(e) contain such other particulars (if any) as may be required to be contained in contractor notices by regulations made by the appropriate national authority,
and must also comply with such requirements (if any) about the form of contractor notices as may be prescribed by regulations so made.
(4) Where a person who receives a contractor notice (including one who receives a copy by virtue of this subsection) is party to an existing management sub-contract with another person (the “sub-contractor party”), the person who received the notice must—
(a) send a copy of the contractor notice to the sub-contractor party, and
(b) give to the RTM company a contract notice in relation to the existing management sub-contract.
(5) An existing management sub-contract is a contract under which the sub-contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage and which—
(a) is subsisting immediately before the determination date, or
(b) is entered into during the period beginning with the determination date and ending with the acquisition date.
(6) Subsection (4) must be complied with—
(a) in the case of a contract entered into before the contractor notice is received, on the date on which it is received or as soon after that date as is reasonably practicable, and
(b) in the case of a contract entered into after the contractor notice is received, on the date on which it is entered into or as soon after that date as is reasonably practicable.
(7) A contract notice must—
(a) give particulars of the contract in relation to which it is given and of the person who is the contractor party, or sub-contractor party, in relation to that contract, and
(b) contain such other particulars (if any) as may be required to be contained in contract notices by regulations made by the appropriate national authority,
and must also comply with such requirements (if any) about the form of contract notices as may be prescribed by such regulations so made.
(1) Where the right to manage premises is to be acquired by a RTM company, the company may give notice to a person who is—
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,
requiring him to provide the company with any information which is in his possession or control and which the company reasonably requires in connection with the exercise of the right to manage.
(2) Where the information is recorded in a document in his possession or control the notice may require him—
(a) to permit any person authorised to act on behalf of the company at any reasonable time to inspect the document (or, if the information is recorded in the document in a form in which it is not readily intelligible, to give any such person access to it in a readily intelligible form), and
(b) to supply the company with a copy of the document containing the information in a readily intelligible form.
(3) A notice may not require a person to do anything under this section before the acquisition date.
(4) But, subject to that, a person who is required by a notice to do anything under this section must do it within the period of 28 days beginning with the day on which the notice is given.
(1) Where the right to manage premises is to be acquired by a RTM company, a person who is—
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,
must make to the company a payment equal to the amount of any accrued uncommitted service charges held by him on the acquisition date.
(2) The amount of any accrued uncommitted service charges is the aggregate of—
(a) any sums which have been paid to the person by way of service charges in respect of the premises, and
(b) any investments which represent such sums (and any income which has accrued on them),
less so much (if any) of that amount as is required to meet the costs incurred before the acquisition date in connection with the matters for which the service charges were payable.
(3) He or the RTM company may make an application to a leasehold valuation tribunal to determine the amount of any payment which falls to be made under this section.
(4) The duty imposed by this section must be complied with on the acquisition date or as soon after that date as is reasonably practicable.
Sections 96 to 103 apply where the right to manage premises has been acquired by a RTM company (and has not ceased to be exercisable by it).
(1) This section and section 97 apply in relation to management functions relating to the whole or any part of the premises.
(2) Management functions which a person who is landlord under a lease of the whole or any part of the premises has under the lease are instead functions of the RTM company.
(3) And where a person is party to a lease of the whole or any part of the premises otherwise than as landlord or tenant, management functions of his under the lease are also instead functions of the RTM company.
(4) Accordingly, any provisions of the lease making provision about the relationship of—
(a) a person who is landlord under the lease, and
(b) a person who is party to the lease otherwise than as landlord or tenant,
in relation to such functions do not have effect.
(5) “Management functions” are functions with respect to services, repairs, maintenance, improvements, insurance and management.
(6) But this section does not apply in relation to—
(a) functions with respect to a matter concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant, or
(b) functions relating to re-entry or forfeiture.
(7) An order amending subsection (5) or (6) may be made by the appropriate national authority.
(1) Any obligation owed by the RTM company by virtue of section 96 to a tenant under a lease of the whole or any part of the premises is also owed to each person who is landlord under the lease.
(2) A person who is—
(a) landlord under a lease of the whole or any part of the premises,
(b) party to such a lease otherwise than as landlord or tenant, or
(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,
is not entitled to do anything which the RTM company is required or empowered to do under the lease by virtue of section 96, except in accordance with an agreement made by him and the RTM company.
(3) But subsection (2) does not prevent any person from insuring the whole or any part of the premises at his own expense.
(4) So far as any function of a tenant under a lease of the whole or any part of the premises—
(a) relates to the exercise of any function under the lease which is a function of the RTM company by virtue of section 96, and
(b) is exercisable in relation to a person who is landlord under the lease or party to the lease otherwise than as landlord or tenant,
it is instead exercisable in relation to the RTM company.
(5) But subsection (4) does not require or permit the payment to the RTM company of so much of any service charges payable by a tenant under a lease of the whole or any part of the premises as is required to meet costs incurred before the right to manage was acquired by the RTM company in connection with matters for which the service charges are payable.
(1) This section and section 99 apply in relation to the grant of approvals under long leases of the whole or any part of the premises; but nothing in this section or section 99 applies in relation to an approval concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant.
(2) Where a person who is—
(a) landlord under a long lease of the whole or any part of the premises, or
(b) party to such a lease otherwise than as landlord or tenant,
has functions in relation to the grant of approvals to a tenant under the lease, the functions are instead functions of the RTM company.
(3) Accordingly, any provisions of the lease making provision about the relationship of—
(a) a person who is landlord under the lease, and
(b) a person who is party to the lease otherwise than as landlord or tenant,
in relation to such functions do not have effect.
(4) The RTM company must not grant an approval by virtue of subsection (2) without having given—
(a) in the case of an approval relating to assignment, underletting, charging, parting with possession, the making of structural alterations or improvements or alterations of use, 30 days' notice, or
(b) in any other case, 14 days' notice,
to the person who is, or each of the persons who are, landlord under the lease.
(5) Regulations increasing the period of notice to be given under subsection (4)(b) in the case of any description of approval may be made by the appropriate national authority.
(6) So far as any function of a tenant under a long lease of the whole or any part of the premises—
(a) relates to the exercise of any function which is a function of the RTM company by virtue of this section, and
(b) is exercisable in relation to a person who is landlord under the lease or party to the lease otherwise than as landlord or tenant,
it is instead exercisable in relation to the RTM company.
(7) In this Chapter “approval” includes consent or licence and “approving” is to be construed accordingly; and an approval required to be obtained by virtue of a restriction entered on the register of title kept by the Chief Land Registrar is, so far as relating to a long lease of the whole or any part of any premises, to be treated for the purposes of this Chapter as an approval under the lease.
(1) If a person to whom notice is given under section 98(4) objects to the grant of the approval before the time when the RTM company would first be entitled to grant it, the RTM company may grant it only—
(a) in accordance with the written agreement of the person who objected, or
(b) in accordance with a determination of (or on an appeal from) a leasehold valuation tribunal.
(2) An objection to the grant of the approval may not be made by a person unless he could withhold the approval if the function of granting it were exercisable by him (and not by the RTM company).
(3) And a person may not make an objection operating only if a condition or requirement is not satisfied unless he could grant the approval subject to the condition or requirement being satisfied if the function of granting it were so exercisable.
(4) An objection to the grant of the approval is made by giving notice of the objection (and of any condition or requirement which must be satisfied if it is not to operate) to—
(a) the RTM company, and
(b) the tenant,
and, if the approval is to a tenant approving an act of a sub-tenant, to the sub-tenant.
(5) An application to a leasehold valuation tribunal for a determination under subsection (1)(b) may be made by—
(a) the RTM company,
(b) the tenant,
(c) if the approval is to a tenant approving an act of a sub-tenant, the sub-tenant, or
(d) any person who is landlord under the lease.
(1) This section applies in relation to the enforcement of untransferred tenant covenants of a lease of the whole or any part of the premises.
(2) Untransferred tenant covenants are enforceable by the RTM company, as well as by any other person by whom they are enforceable apart from this section, in the same manner as they are enforceable by any other such person.
(3) But the RTM company may not exercise any function of re-entry or forfeiture.
(4) In this Chapter “tenant covenant”, in relation to a lease, means a covenant falling to be complied with by a tenant under the lease; and a tenant covenant is untransferred if, apart from this section, it would not be enforceable by the RTM company.
(5) Any power under a lease of a person who is—
(a) landlord under the lease, or
(b) party to the lease otherwise than as landlord or tenant,
to enter any part of the premises to determine whether a tenant is complying with any untransferred tenant covenant is exercisable by the RTM company (as well as by the landlord or party).
(1) This section applies in relation to failures to comply with tenant covenants of leases of the whole or any part of the premises.
(2) The RTM company must—
(a) keep under review whether tenant covenants of leases of the whole or any part of the premises are being complied with, and
(b) report to any person who is landlord under such a lease any failure to comply with any tenant covenant of the lease.
(3) The report must be made before the end of the period of three months beginning with the day on which the failure to comply comes to the attention of the RTM company.
(4) But the RTM company need not report to a landlord a failure to comply with a tenant covenant if—
(a) the failure has been remedied,
(b) reasonable compensation has been paid in respect of the failure, or
(c) the landlord has notified the RTM company that it need not report to him failures of the description of the failure concerned.
(1) Schedule 7 (provision for the operation of certain enactments with modifications) has effect.
(2) Other enactments relating to leases (including enactments contained in this Act or any Act passed after this Act) have effect with any such modifications as are prescribed by regulations made by the appropriate national authority.
(1) This section applies where—
(a) the premises contain at least one flat or other unit not subject to a lease held by a qualifying tenant (an “excluded unit”),
(b) the service charges payable under leases of flats contained in the premises which are so subject fall to be calculated as a proportion of the relevant costs, and
(c) the proportions of the relevant costs so payable, when aggregated, amount to less than the whole of the relevant costs.
(2) Where the premises contain only one excluded unit, the person who is the appropriate person in relation to the excluded unit must pay to the RTM company the difference between—
(a) the relevant costs, and
(b) the aggregate amount payable in respect of the relevant costs under leases of flats contained in the premises which are held by qualifying tenants.
(3) Where the premises contain more than one excluded unit, each person who is the appropriate person in relation to an excluded unit must pay to the RTM company the appropriate proportion of that difference.
(4) And the appropriate proportion in the case of each such person is the proportion of the internal floor area of all of the excluded units which is internal floor area of the excluded unit in relation to which he is the appropriate person.
(5) The appropriate person in relation to an excluded unit—
(a) if it is subject to a lease, is the landlord under the lease,
(b) if it is subject to more than one lease, is the immediate landlord under whichever of the leases is inferior to all the others, and
(c) if it is not subject to any lease, is the freeholder.
(1) In section 49(1) of the Land Registration Act 1925 (c. 21) (rules to provide for rights, interests and claims to be protected by notice), insert at the end—
“(l) the right to manage being exercisable by a RTM company under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002.”
(2) In section 64 of that Act (production of certificates for noting on certain dealings etc.), insert at the end—
“(8) Subsection (1) above shall also not require the production of the land certificate or of any charge certificate when a person applies for the registration of a notice in respect of the right to manage being exercisable by a RTM company under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002.”
(3) After section 111 of that Act insert—
A caution may be lodged under section 53 of this Act in respect of the right to manage being exercisable by a RTM company under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002.”
(1) This section makes provision about the circumstances in which, after a RTM company has acquired the right to manage any premises, that right ceases to be exercisable by it.
(2) Provision may be made by an agreement made between—
(a) the RTM company, and
(b) each person who is landlord under a lease of the whole or any part of the premises,
for the right to manage the premises to cease to be exercisable by the RTM company.
(3) The right to manage the premises ceases to be exercisable by the RTM company if—
(a) a winding-up order or an administration order is made, or a resolution for voluntary winding-up is passed, with respect to the RTM company,
(b) a receiver or a manager of the RTM company’s undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the RTM company comprised in or subject to the charge,
(c) a voluntary arrangement proposed in the case of the RTM company for the purposes of Part 1 of the Insolvency Act 1986 (c. 45) is approved under that Part of that Act, or
(d) the RTM company’s name is struck off the register under section 652 or 652A of the Companies Act 1985 (c. 6).
(4) The right to manage the premises ceases to be exercisable by the RTM company if a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, begins so to act or an order under that Part of that Act that the right to manage the premises is to cease to be exercisable by the RTM company takes effect.
(5) The right to manage the premises ceases to be exercisable by the RTM company if it ceases to be a RTM company in relation to the premises.
Any agreement relating to a lease (whether contained in the instrument creating the lease or not and whether made before the creation of the lease or not) is void in so far as it—
(a) purports to exclude or modify the right of any person to be, or do any thing as, a member of a RTM company,
(b) provides for the termination or surrender of the lease if the tenant becomes, or does any thing as, a member of a RTM company or if a RTM company does any thing, or
(c) provides for the imposition of any penalty or disability if the tenant becomes, or does any thing as, a member of a RTM company or if a RTM company does any thing.
(1) A county court may, on the application of any person interested, make an order requiring a person who has failed to comply with a requirement imposed on him by, under or by virtue of any provision of this Chapter to make good the default within such time as is specified in the order.
(2) An application shall not be made under subsection (1) unless—
(a) a notice has been previously given to the person in question requiring him to make good the default, and
(b) more than 14 days have elapsed since the date of the giving of that notice without his having done so.
(1) This Chapter applies in relation to premises in which there is a Crown interest.
(2) There is a Crown interest in premises if there is in the premises an interest or estate—
(a) which is comprised in the Crown Estate,
(b) which belongs to Her Majesty in right of the Duchy of Lancaster,
(c) which belongs to the Duchy of Cornwall, or
(d) which belongs to a government department or is held on behalf of Her Majesty for the purposes of a government department.
(3) Any sum payable under this Chapter to a RTM company by the Chancellor of the Duchy of Lancaster may be raised and paid under section 25 of the Duchy of Lancaster Act 1817 (c. 97) as an expense incurred in improvement of land belonging to Her Majesty in right of the Duchy.
(4) Any sum payable under this Chapter to a RTM company by the Duke of Cornwall (or any other possessor for the time being of the Duchy of Cornwall) may be raised and paid under section 8 of the Duchy of Cornwall Management Act 1863 (c. 49) as an expense incurred in permanently improving the possessions of the Duchy.