Forfeiture & the LVT

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    Forfeiture & the LVT

    I'm reading up on the principle of 'quiet enjoyment' and harassment and have found some documentation on the debate in the House of Commons relating to the Commonhold & Leasehold Reform Act 2002. The bit of interest to me is the reasons for implementation of the restriction on a LL issuing a s146 notice before determination of a breach. The discussion on this part of the Act can be found here.

    I assume there must have been some earlier debate though and have not been able to find anything. Does anybody remember why this legislation came into being?

    Was it:

    i) To free the Courts of some of the workload?
    ii) To provide leaseholders with a less imposing environment than the Courts?
    iii) To make LL's think twice before taking the forfeiture route?
    iv) To stop the threat of forfeiture being used as intimidation and coercion?
    v) something else?
    I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

    #2
    The promise to introduce "Commonhold Tenure System" to replace the "Leasehold Tenure System" was promoted by Nick Raynsford and Frank Job as part of the New Labour election manifesto in 1997.

    I suggest you send an enquiry to Mr Wilkins , Chairman of CARL.

    Comment


      #3
      Originally posted by Gordon999 View Post

      I suggest you send an enquiry to Mr Wilkins , Chairman of CARL.
      Thanks Gordon,

      I've actually found a couple of web pages from the time when the legislation came into force. It would appear that the concern was that unscrupulous LL's were taking advantage of naive tenants. See here and here. Also that the threats were being used in regard to short-term small debts.

      The last paragraph of the second article predicts that the problem doesn't really go away as a result of the legislation though. Something I believe has turned out to be the case. Instead of serving a s146 notice, LL's achieve pretty much the same result by sending solicitor letters threatening forfeiture. I believe that in cases where there is no actual breach, this amounts to harassment/intimidation.

      I think LL's and their agents need to be very careful when threatening forfeiture. I know it makes their job harder but I believe they need to make sure they have evidence to prove their allegations plus co-operation of witnesses before making these threats. My book on harassment would seem to suggest that if they don't have the evidence or fail at the LVT then they are open to a claim for damages on the grounds of intimidation/harassment. Possibly even criminal proceedings against them.

      There may even be an argument that forfeiture should not be threatened before the LVT have decided that there has been a breach.
      I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

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        #4
        Which book on harassment are you using, Siva?

        Comment


          #5
          Originally posted by Perplexed View Post
          Which book on harassment are you using, Siva?
          It's called "Quiet Enjoyment" by Andrew Arden QC, Rebecca Chan & Sam Madge-Wyld. Published by LAG.
          I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

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            #6
            I always smile when someone has the aura or expresses enlightenment and it, in Mel brooks fashion is a person running into a busy road screaming, "everyone stop it's marvellous, my invention changes everything, I have invented the wheel"

            Of course any one starting any form of proceedings , even one with half a basis, risks a counter action.

            There may even be an argument that forfeiture should not be threatened before the LVT have decided that there has been a breach.
            C'mon think it through...besides a s146 notice cannot be served for a breach until it has been determined and its very nature F is only a consequence if certain circumstances are not addressed or if disputed determined, and even then requires a court to decide if is is appropriate as a remedy. The process of litigating this requires the initial LBA and ADR and the summary or rights makes leaseholders well aware of their rights. This was of course intitiated by the 96 Act not the 2002 Act.

            At that time the reasoning was simple
            - forfeiture for small sums had been obtained and often sought on small sums often ground rents whether formally demanded or not was relied on
            -the threat of a S146 meant that lenders very often paid up, and no doubt lobbied against that
            -the increasing effect on indemnity polices and mortgages going over 100% because of debts
            -the courts were asked to deal with lay people arguing non payment for many reasons very often for vague " not happy with the cleaning" to a "its rip off" often when it was, but as often where people simply did not understand.This placed a huge burden on the courts in terms of time & evidence and highlighted a gap in the right of redress and dispute.
            - that leasehold property and flats in particular were a way to react quickly to growth in London and beyond and therefore as a matter of public policy the balance had to be moved. And votes of course....

            As to reading Hansard, Courts as a rule rely on that as a method of last resort.
            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

            Comment


              #7
              C'mon think it through...besides a s146 notice cannot be served for a breach until it has been determined and its very nature F is only a consequence if certain circumstances are not addressed or if disputed determined, and even then requires a court to decide if is is appropriate as a remedy.
              I'm talking about when the LL threatens forfeiture when they are not sure there has been a breach of lease. This seems to be common practice before going to the LVT.
              I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

              Comment


                #8
                Originally posted by siva View Post
                I'm talking about when the LL threatens forfeiture when they are not sure there has been a breach of lease. This seems to be common practice before going to the LVT.
                Well, of course if they are taking you to the LVT they have to serve a notice on you to that effect, and this is likely to state that if the breach is established this could then result in forfeiture of the lease. Let's face it, if they did not tell you that you could argue they had sprung a surprise on you.

                What concerns me though is that there are people saying that a residential leasehold property can be forfeited without even serving a S.146 Notice (provided that it is empty), and I am told this is still happening. They force entry, change the locks, and if neither the leaseholder nor their lender seek relief within 6 months, they remove the lease from the Land Registry and that's the end of the matter.

                I thought that the new provisions introduced first in the Housing Act 1996 and then in the Commonhold and Leasehold Reform Act 2002 were designed precisely to prevent this, but apparently it is still happenning, and deemed lawful at common law.

                How on earth is this possible?

                Comment


                  #9
                  Originally posted by Perplexed View Post
                  Well, of course if they are taking you to the LVT they have to serve a notice on you to that effect, and this is likely to state that if the breach is established this could then result in forfeiture of the lease. Let's face it, if they did not tell you that you could argue they had sprung a surprise on you.
                  Well the LVT application is only to establish whether there has been a breach of lease, so I wouldn't necessarily agree that a LL has to warn you in regard to forfeiture.

                  I thought that the new provisions introduced first in the Housing Act 1996 and then in the Commonhold and Leasehold Reform Act 2002 were designed precisely to prevent this
                  I've not seen anything when researching the 2002 CLRA to suggest this was motivation for the Act. Would the behaviour you refer to not be for non-payment of rent of more than £350?
                  I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

                  Comment


                    #10
                    Originally posted by siva View Post
                    Well the LVT application is only to establish whether there has been a breach of lease, so I wouldn't necessarily agree that a LL has to warn you in regard to forfeiture.
                    Well, they would have to warn you that they are taking you to the LT for a determination that there has been a breach of the lease AND that if the breach is established you risk forfeiture.

                    Just as a landlord will tell a renting tenant on an AST that if they remain in arrears with their rent that could jeopardise their tenancy.

                    I've not seen anything when researching the 2002 CLRA to suggest this was motivation for the Act. Would the behaviour you refer to not be for non-payment of rent of more than £350?
                    That, I haven't been told.

                    Comment


                      #11
                      If there is breach of the lease then if it is to be remedied by specific performance or damages pursued then that is a straightforward application to the court.

                      The protection of the LVT ( or other determination) is extended to those at risk from forfeiture proceedings as a necessary precursor to S146 proceedings as in the 96 Act and as amended and extended under CLRA. it would be pointless to seek determination and then start over with an LBA as the whole point is to resolve a problem by agreement determination or "nuclear force"- forfeiture.

                      As S146 does not apply to rent of any amount the Act does not apply ( save for the £350/3year threshold for proceedings) and do not require determination of any sort or a S146 notice. As previously explained.

                      Re entry is not forfeiture, it is just that. The motto is "Use it or lose it". It would be a rare and extraordinary situation where the L would abandon the property and their obligations and do so for an extended period of time where relief would not be sought or granted.

                      Is it a windfall, yes, but when a property is abandoned the F still has obligations , should he just have to fork out and twiddle his thumbs? But it is it a loss if someone does abandon it and their oblgoiations as L?
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment


                        #12
                        Originally posted by Perplexed View Post
                        Just as a landlord will tell a renting tenant on an AST that if they remain in arrears with their rent that could jeopardise their tenancy.
                        I don't think you can assume that because something is required with gaining possession of a short lease that it applies to leasehold too.

                        The forfeiture process starts once a s146 notice is served. This cannot be done until 14 days after the LVT/court have determined that there has been a breach and this has become final. Once the notice is served the leaseholder has reasonable time to remedy the breach if it can be remedied.

                        See here.
                        I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

                        Comment


                          #13
                          The AST has its own rules, but the principle is sound, a breach of some sort will lead to consequences and under the CPR and new LVT rules the consequences will have to be spelt out in the LBA

                          When it comes to short leases whether under the 54 Act or 88 act 77 Act and assured or statutory tenancies particularly those with variable service charges, not only are they all "leasehold" similar rules do apply.
                          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                          Comment


                            #14
                            Originally posted by leaseholdanswers View Post
                            As S146 does not apply to rent of any amount the Act does not apply ( save for the £350/3year threshold for proceedings) and do not require determination of any sort or a S146 notice. As previously explained.
                            I see what you mean, LH: if the arrears are for ground rent then you don't need to serve a S146 notice.

                            Actually, I've done some research and I think that the threashold has now been upped to 3 years or £500.

                            Now, imagine a scenario where a FH regularly bills for service charge/works and ground rent and the money is all paid into the same account, but a crafty LH picks and chooses what to pay, leaving gaps, and this has been going on for years, with that LH's account in arrears for 3 years or more now.

                            Q1: Can the LH argue that he duly paid the ground rent, or can the monies received be allocated as the FH chooses?

                            Q2: Does the FH need an LVT decision and a S146 notice, or can he just force an entry into the empty property and change the locks, then after 6 months remove the lease from the Land Registry's records?

                            Comment


                              #15
                              Originally posted by Perplexed View Post
                              I see what you mean, LH: if the arrears are for ground rent then you don't need to serve a S146 notice.

                              Actually, I've done some research and I think that the threashold has now been upped to 3 years or £500.

                              Now, imagine a scenario where a FH regularly bills for service charge/works and ground rent and the money is all paid into the same account, but a crafty LH picks and chooses what to pay, leaving gaps, and this has been going on for years, with that LH's account in arrears for 3 years or more now.

                              Q1: Can the LH argue that he duly paid the ground rent, or can the monies received be allocated as the FH chooses?

                              Q2: Does the FH need an LVT decision and a S146 notice, or can he just force an entry into the empty property and change the locks, then after 6 months remove the lease from the Land Registry's records?
                              Yes it is 3 years as posted earlier but the £350 is still the SI regulation amount. £500 is the cap amount in CLRA 2002

                              Q1 but the arrears are still totalled as being short. The outcome depends on how the charges are reserved and how they were tendered, otherwise the FH can allocate as he sees fit. Keeping them in one account and combined billing is risky.

                              Q2 as said re entry is different from forfeiture. if the lease allows it the LL can reenter but is liable for a breach of quiet enjoyment harassment and a criminal act, while the lessee has the ability to seek relief.
                              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                              Comment

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