PART 2 continued CHAPTER 5 continued
(5) A notice under this section is duly served on the landlord if it is served on—
(a) an agent of the landlord named as such in the rent book or similar document, or
(b) the person who receives the rent on behalf of the landlord;
and a person on whom such a notice is so served must forward it as soon as may be to the landlord.
(6) The landlord must comply with a requirement imposed by a notice under this section within the period of twenty-one days beginning with the day on which he receives the notice.
(7) To the extent that a notice under this section requires the landlord to afford facilities for inspecting documents—
(a) he must do so free of charge, but
(b) he may treat as part of his costs of management any costs incurred by him in doing so.
(8) The landlord may make a reasonable charge for doing anything else in compliance with a requirement imposed by a notice under this section.”
(1) After section 27 of the 1985 Act insert—
(1) An application may be made to a leasehold valuation tribunal for a determination whether a service charge is payable and, if it is, as to—
(a) the person by whom it is payable,
(b) the person to whom it is payable,
(c) the amount which is payable,
(d) the date at or by which it is payable, and
(e) the manner in which it is payable.
(2) Subsection (1) applies whether or not any payment has been made.
(3) An application may also be made to a leasehold valuation tribunal for a determination whether, if costs were incurred for services, repairs, maintenance, improvements, insurance or management of any specified description, a service charge would be payable for the costs and, if it would, as to—
(a) the person by whom it would be payable,
(b) the person to whom it would be payable,
(c) the amount which would be payable,
(d) the date at or by which it would be payable, and
(e) the manner in which it would be payable.
(4) No application under subsection (1) or (3) may be made in respect of a matter which—
(a) has been agreed or admitted by the tenant,
(b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which the tenant is a party,
(c) has been the subject of determination by a court, or
(d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.
(5) But the tenant is not to be taken to have agreed or admitted any matter by reason only of having made any payment.
(6) An agreement by the tenant of a dwelling (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—
(a) in a particular manner, or
(b) on particular evidence,
of any question which may be the subject of an application under subsection (1) or (3).
(7) The jurisdiction conferred on a leasehold valuation tribunal in respect of any matter by virtue of this section is in addition to any jurisdiction of a court in respect of the matter.”
(2) In section 38 of the 1985 Act (definitions), at the end of the definitions of “arbitration agreement”, “arbitration agreement” and “arbitral tribunal”, insert “and post-dispute arbitration agreement”, in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen;”.
(3) In section 39 of the 1985 Act (index of defined expressions), in the first column, in the entry “arbitration agreement, arbitration agreement and arbitral tribunal”, for “and arbitral tribunal” substitute “, arbitral tribunal and post-dispute arbitration agreement”.
(1) After section 42 of the 1987 Act insert—
(1) The payee must hold any sums standing to the credit of any trust fund in a designated account at a relevant financial institution.
(2) An account is a designated account in relation to sums standing to the credit of a trust fund if—
(a) the relevant financial institution has been notified in writing that sums standing to the credit of the trust fund are to be (or are) held in it, and
(b) no other funds are held in the account,
and the account is an account of a description specified in regulations made by the Secretary of State.
(3) Any of the contributing tenants, or the sole contributing tenant, may by notice in writing require the payee—
(a) to afford him reasonable facilities for inspecting documents evidencing that subsection (1) is complied with and for taking copies of or extracts from them, or
(b) to take copies of or extracts from any such documents and either send them to him or afford him reasonable facilities for collecting them (as he specifies).
(4) If the tenant is represented by a recognised tenants' association and he consents, the notice may be served by the secretary of the association instead of by the tenant (and in that case any requirement imposed by it is to afford reasonable facilities, or to send copies or extracts, to the secretary).
(5) A notice under this section is duly served on the payee if it is served on—
(a) an agent of the payee named as such in the rent book or similar document, or
(b) the person who receives the rent on behalf of the payee;
and a person on whom such a notice is so served must forward it as soon as may be to the payee.
(6) The payee must comply with a requirement imposed by a notice under this section within the period of twenty-one days beginning with the day on which he receives the notice.
(7) To the extent that a notice under this section requires the payee to afford facilities for inspecting documents—
(a) he must do so free of charge, but
(b) he may treat as part of his costs of management any costs incurred by him in doing so.
(8) The payee may make a reasonable charge for doing anything else in compliance with a requirement imposed by a notice under this section.
(9) Any of the contributing tenants, or the sole contributing tenant, may withhold payment of a service charge if he has reasonable grounds for believing that the payee has failed to comply with the duty imposed on him by subsection (1); and any provisions of his tenancy relating to non-payment or late payment of service charges do not have effect in relation to the period for which he so withholds it.
(10) Nothing in this section applies to the payee if the circumstances are such as are specified in regulations made by the Secretary of State.
(11) In this section—
“recognised tenants' association” has the same meaning as in the 1985 Act, and
“relevant financial institution” has the meaning given by regulations made by the Secretary of State;
and expressions used both in section 42 and this section have the same meaning as in that section.
(1) If a person fails, without reasonable excuse, to comply with a duty imposed on him by or by virtue of section 42A he commits an offence.
(2) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 4 on the standard scale.
(3) Where an offence under this section committed by a body corporate is proved—
(a) to have been committed with the consent or connivance of a director, manager, secretary or other similar officer of the body corporate, or a person purporting to act in such a capacity, or
(b) to be due to any neglect on the part of such an officer or person,
he, as well as the body corporate, is guilty of the offence and liable to be proceeded against and punished accordingly.
(4) Where the affairs of a body corporate are managed by its members, subsection (3) applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(5) Proceedings for an offence under this section may be brought by a local housing authority (within the meaning of section 1 of the Housing Act 1985 (c. 68)).”
(2) In section 53(2)(b) of the 1987 Act (regulations subject to negative procedure), insert at the end “or 42A”.
Schedule 10 (minor and consequential amendments about service charges) has effect.
Schedule 11 (which makes provision about administration charges payable by tenants of dwellings) has effect.
(1) This section applies where a scheme under—
(a) section 19 of the 1967 Act (estate management schemes in connection with enfranchisement under that Act),
(b) Chapter 4 of Part 1 of the 1993 Act (estate management schemes in connection with enfranchisement under the 1967 Act or Chapter 1 of Part 1 of the 1993 Act), or
(c) section 94(6) of the 1993 Act (corresponding schemes in relation to areas occupied under leases from Crown),
includes provision imposing on persons occupying or interested in property an obligation to make payments (“estate charges”).
(2) A variable estate charge is payable only to the extent that the amount of the charge is reasonable; and “variable estate charge” means an estate charge which is neither—
(a) specified in the scheme, nor
(b) calculated in accordance with a formula specified in the scheme.
(3) Any person on whom an obligation to pay an estate charge is imposed by the scheme may apply to a leasehold valuation tribunal for an order varying the scheme in such manner as is specified in the application on the grounds that—
(a) any estate charge specified in the scheme is unreasonable, or
(b) any formula specified in the scheme in accordance with which any estate charge is calculated is unreasonable.
(4) If the grounds on which the application was made are established to the satisfaction of the tribunal, it may make an order varying the scheme in such manner as is specified in the order.
(5) The variation specified in the order may be—
(a) the variation specified in the application, or
(b) such other variation as the tribunal thinks fit.
(6) An application may be made to a leasehold valuation tribunal for a determination whether an estate charge is payable by a person and, if it is, as to—
(a) the person by whom it is payable,
(b) the person to whom it is payable,
(c) the amount which is payable,
(d) the date at or by which it is payable, and
(e) the manner in which it is payable.
(7) Subsection (6) applies whether or not any payment has been made.
(8) The jurisdiction conferred on a leasehold valuation tribunal in respect of any matter by virtue of subsection (6) is in addition to any jurisdiction of a court in respect of the matter.
(9) No application under subsection (6) may be made in respect of a matter which—
(a) has been agreed or admitted by the person concerned,
(b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which that person is a party,
(c) has been the subject of determination by a court, or
(d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.
(10) But the person is not to be taken to have agreed or admitted any matter by reason only of having made any payment.
(11) An agreement (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—
(a) in a particular manner, or
(b) on particular evidence,
of any question which may be the subject matter of an application under subsection (6).
(12) In this section—
“post-dispute arbitration agreement”, in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen, and
“arbitration agreement” and “arbitral tribunal” have the same meanings as in Part 1 of the Arbitration Act 1996 (c. 23).
(1) The 1987 Act has effect subject to the following amendments.
(2) In section 22 (notice by tenant before application for appointment of manager is made)—
(a) in subsection (1), for “on the landlord by the tenant” substitute “by the tenant on—
(i) the landlord, and
(ii) any person (other than the landlord) by whom obligations relating to the management of the premises or any part of them are owed to the tenant under his tenancy”,
(b) in subsection (2)(a), for “the landlord” substitute “any person on whom the notice is served”,
(c) in subsection (2)(b), for “landlord complies with the requirement specified in pursuance of that paragraph” substitute “requirement specified in pursuance of that paragraph is complied with”,
(d) in subsection (2)(d), for “the landlord, require the landlord” substitute “any person on whom the notice is served, require him”, and
(e) in subsection (3)—
(i) after “this section” insert “on a person”, and
(ii) for “landlord” substitute “person”.
(3) In section 23(1) (application to tribunal for appointment of manager), for “landlord having taken the steps that he was required to take in pursuance of that provision” substitute “person required to take steps in pursuance of that paragraph having taken them”.
(4) In section 24 (appointment of manager by tribunal)—
(a) in subsection (2), for “the landlord” (in both places) substitute “any relevant person”,
(b) after that subsection insert—
“(2ZA) In this section “relevant person” means a person—
(a) on whom a notice has been served under section 22, or
(b) in the case of whom the requirement to serve a notice under that section has been dispensed with by an order under subsection (3) of that section.”,
(c) in subsection (5), for “the landlord” substitute “any relevant person”,
(d) in subsection (9A), for “a landlord’s application” substitute “the application of any relevant person”, and
(e) in subsection (11), for “section” substitute “Part”.
(5) In section 29(3), insert at the end “which was made by reason of an act or omission on the part of the landlord.”
In section 21 of the 1987 Act (tenant’s right to apply to tribunal for appointment of manager), after subsection (3) insert—
“(3A) But this Part is not prevented from applying to any premises because the interest of the landlord in the premises is held by a resident landlord if at least one-half of the flats contained in the premises are held on long leases which are not tenancies to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) applies.”
(1) Section 35 of the 1987 Act (application by party to lease for variation of lease) is amended as follows.
(2) In subsection (2) (grounds for application), for paragraph (b) substitute—
“(b) the insurance of the building containing the flat or of any such land or building as is mentioned in paragraph (a)(iii);”.
(3) After paragraph (f) of that subsection insert—
“(g) such other matters as may be prescribed by regulations made by the Secretary of State.”
(4) After subsection (3) insert—
“(3A) For the purposes of subsection (2)(e) the factors for determining, in relation to a service charge payable under a lease, whether the lease makes satisfactory provision include whether it makes provision for an amount to be payable (by way of interest or otherwise) in respect of a failure to pay the service charge by the due date.”
(5) In section 53(2)(b) of the 1987 Act (regulations subject to negative Parliamentary procedure), after “section 20(4)” insert “or 35(2)(g)”.
(1) Part 4 of the 1987 Act (variation of leases) is amended as follows.
(2) In section 35 (application by party to lease for variation of lease)—
(a) in subsection (1), for “the court” substitute “a leasehold valuation tribunal”, and
(b) in subsection (5), for “Rules of court” substitute “Procedure regulations under Schedule 12 to the Commonhold and Leasehold Reform Act 2002”.
(3) In section 36(1) (application by respondent for variation of other leases), for “court” substitute “tribunal”.
(4) In section 37(1) (application by majority of parties for variation of leases), for “the court” substitute “a leasehold valuation tribunal”.
(5) In section 38 (orders varying leases)—
(a) in subsections (1) to (5), for “court” (in each place) substitute “tribunal”,
(b) in subsection (6)—
(i) for “The court” substitute “A tribunal”, and
(ii) for “the court” substitute “the tribunal”,
(c) in subsections (7) to (9), for “The court” substitute “A tribunal”, and
(d) in subsection (10)—
(i) for “the court”, in the first place, substitute “a tribunal”, and
(ii) for “the court”, in the other two places, substitute “the tribunal”.
(6) In section 39 (applications by third parties for orders varying leases)—
(a) in subsection (3)(b), for “the court” substitute “a leasehold valuation tribunal”,
(b) in subsection (4), for “The court” substitute “A tribunal”, and
(c) in subsection (5)(b), for “court” substitute “tribunal”.
(7) In section 40(1) (variation of insurance provisions of dwelling other than flat), for “the court” substitute “a leasehold valuation tribunal”.
(8) In consequence of the preceding provisions, in section 52(2)(a) of the 1987 Act (jurisdiction of county courts), for “, 3 and 4” substitute “and 3”.
(1) This section applies where a long lease of a house requires the tenant to insure the house with an insurer nominated or approved by the landlord (“the landlord’s insurer”).
(2) The tenant is not required to effect the insurance with the landlord’s insurer if—
(a) the house is insured under a policy of insurance issued by an authorised insurer,
(b) the policy covers the interests of both the landlord and the tenant,
(c) the policy covers all the risks which the lease requires be covered by insurance provided by the landlord’s insurer,
(d) the amount of the cover is not less than that which the lease requires to be provided by such insurance, and
(e) the tenant satisfies subsection (3).
(3) To satisfy this subsection the tenant—
(a) must have given a notice of cover to the landlord before the end of the period of fourteen days beginning with the relevant date, and
(b) if (after that date) he has been requested to do so by a new landlord, must have given a notice of cover to him within the period of fourteen days beginning with the day on which the request was given.
(4) For the purposes of subsection (3)—
(a) if the policy has not been renewed the relevant date is the day on which it took effect and if it has been renewed it is the day from which it was last renewed, and
(b) a person is a new landlord on any day if he acquired the interest of the previous landlord under the lease on a disposal made by him during the period of one month ending with that day.
(5) A notice of cover is a notice specifying—
(a) the name of the insurer,
(b) the risks covered by the policy,
(c) the amount and period of the cover, and
(d) such further information as may be prescribed.
(6) A notice of cover—
(a) must be in the prescribed form, and
(b) may be sent by post.
(7) If a notice of cover is sent by post, it may be addressed to the landlord at the address specified in subsection (8).
(8) That address is—
(a) the address last furnished to the tenant as the landlord’s address for service in accordance with section 48 of the 1987 Act (notification of address for service of notices on landlord), or
(b) if no such address has been so furnished, the address last furnished to the tenant as the landlord’s address in accordance with section 47 of the 1987 Act (landlord’s name and address to be contained in demands for rent).
(9) But the tenant may not give a notice of cover to the landlord at the address specified in subsection (8) if he has been notified by the landlord of a different address in England and Wales at which he wishes to be given any such notice.
(10) In this section—
“authorised insurer”, in relation to a policy of insurance, means a person who may carry on in the United Kingdom the business of effecting or carrying out contracts of insurance of the sort provided under the policy without contravening the prohibition imposed by section 19 of the Financial Services and Markets Act 2000 (c. 8),
“house” has the same meaning as for the purposes of Part 1 of the 1967 Act,
“landlord” and “tenant” have the same meanings as in Chapter 1 of this Part,
“long lease” has the meaning given by sections 76 and 77 of this Act, and
“prescribed” means prescribed by regulations made by the appropriate national authority.
(1) Paragraph 8 of the Schedule to the 1985 Act (right to challenge landlord’s nomination of insurer) is amended as follows.
(2) In sub-paragraphs (1) and (2), after “nominated” insert “or approved”.
(3) In sub-paragraph (4), after “nominate” (in both places) insert “or approve”.
(1) A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment; and the date on which he is liable to make the payment is that specified in the notice.
(2) The notice must specify—
(a) the amount of the payment,
(b) the date on which the tenant is liable to make it, and
(c) if different from that date, the date on which he would have been liable to make it in accordance with the lease,
and shall contain any such further information as may be prescribed.
(3) The date on which the tenant is liable to make the payment must not be—
(a) either less than 30 days or more than 60 days after the day on which the notice is given, or
(b) before that on which he would have been liable to make it in accordance with the lease.
(4) If the date on which the tenant is liable to make the payment is after that on which he would have been liable to make it in accordance with the lease, any provisions of the lease relating to non-payment or late payment of rent have effect accordingly.
(5) The notice—
(a) must be in the prescribed form, and
(b) may be sent by post.
(6) If the notice is sent by post, it must be addressed to a tenant at the dwelling unless he has notified the landlord in writing of a different address in England and Wales at which he wishes to be given notices under this section (in which case it must be addressed to him there).
(7) In this section “rent” does not include—
(a) a service charge (within the meaning of section 18(1) of the 1985 Act), or
(b) an administration charge (within the meaning of Part 1 of Schedule 11 to this Act).
(8) In this section “long lease of a dwelling” does not include—
(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
(c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
(9) In this section—
“dwelling” has the same meaning as in the 1985 Act,
“landlord” and “tenant” have the same meanings as in Chapter 1 of this Part,
“long lease” has the meaning given by sections 76 and 77 of this Act, and
“prescribed” means prescribed by regulations made by the appropriate national authority.
(1) A landlord under a long lease of a dwelling may not exercise a right of re-entry or forfeiture for failure by a tenant to pay an amount consisting of rent, service charges or administration charges (or a combination of them) (“the unpaid amount”) unless the unpaid amount—
(a) exceeds the prescribed sum, or
(b) consists of or includes an amount which has been payable for more than a prescribed period.
(2) The sum prescribed under subsection (1)(a) must not exceed £500.
(3) If the unpaid amount includes a default charge, it is to be treated for the purposes of subsection (1)(a) as reduced by the amount of the charge; and for this purpose “default charge” means an administration charge payable in respect of the tenant’s failure to pay any part of the unpaid amount.
(4) In this section “long lease of a dwelling” does not include—
(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
(c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
(5) In this section—
“administration charge” has the same meaning as in Part 1 of Schedule 11,
“dwelling” has the same meaning as in the 1985 Act,
“landlord” and “tenant” have the same meaning as in Chapter 1 of this Part,
“long lease” has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant’s total share,
“prescribed” means prescribed by regulations made by the appropriate national authority, and
“service charge” has the meaning given by section 18(1) of the 1985 Act.