Clarke and Son News

In Morgan v Fletcher & others [2009] UKUT 186 (LC), six residential tenants (the “tenants”) in a building of eight flats (the “building”) applied to the Leasehold Valuation Tribunal (LVT) to vary their leases (the “leases”).  The tenants claimed that the service charge provisions in the leases were “unsatisfactory” under section 35 of the Landlord and Tenant Act 1987 (LTA 1987).  At the time of their application the aggregate of the service charge proportions under the leases amounted to 116% of the landlord’s expenditure.

 The landlord then amended the service charge provisions for the other two flats in the building, reducing the total service charge contributions for the building to 100% of the landlord’s expenditure. The LVT adjusted the leases of the tenants to make the service charge contributions proportionate. The landlord appealed.

The court allowed the appeal. It held that section 35 of the LTA 1987 was not intended to deal with unfairly disproportionate service charge provisions.  It was only intended to deal with surplus contributions or a shortfall and not situations where the contribution amounted to 100% of the landlord’s expenditure albeit the contribution proportions were unfair.

 Paul Cowdery comments:

In a surprising decision (in fairness terms) relating to service charges on residential flats, on appeal from the Leasehold Valuation Tribunal the Court has found that it has no statutory based power under section 35 of the Landlord and Tenant Act 1987 to adjust the apportionment of service charges between lessees.

The extent of the court’s statuory power is limited to instances where the drafting of leases allows for a surplas or shortfall in the service charge (i.e. so that the amount recoverable from all lessees is more or less than 100% of the recoverable costs incurred).

When purchasing leasehold property it is important that buyers understand the actual arrangement being entered (i.e. what is specified in the lease of the particular property). Whilst the court had sympathy for the tenants in this case, they had no authority to amend what were disproportionate service charge contributions. The court could not intefere with the contractual freedom of the parties to enter leases on those terms.

 If you would like more information about Landlord and Tenant issues, please contact Paul Cowdery on Tel: 01256 320 555.

Recently the One Show on the BBC broadcasted a feature focusing on the importance of putting in place a Lasting Power of Attorney.  They interviewed one viewer who had been battling to get control of her family’s finances after her husband had been left in a coma for three years following an accident. Her husband had not drawn up a Lasting Power of Attorney, so no one else was appointed to deal with his affairs in the event that he became either mentally or physically incapable of doing so.  As a result, his wife had to apply to the Court of Protection each time she wanted to access her husband’s accounts incurring time delays and charges.

 If you are worried about what may happen to your loved ones should you become mentally or physically incapable during your lifetime and would like further information on a Lasting Power of Attorney, please contact Nia Wharry Tel: 01256 320 555.

The Court of Protection’s role is to make decisions in relation to the health, welfare, property and affairs of children and adults who are suffering from mental incapacity.  Currently, these decisions are made in hearings held in private, with only the parties to the application being present, to ensure confidentiality is maintained for the vulnerable people involved.

Recently, the Court of Protection, which was quoted in The Times as being “One of Britain’s most secret courts” has been subject to widespread criticism in its workings. These criticisms are largely from people applying to manage the affairs of elderly or vulnerable relatives who have found the Court of Protection to be bureaucratic, complex and intrusive. As a result of these complaints the senior judge at the Court of Protection, Denzil Lush, has stated that he would favour a decision to allow media access to the hearings, as is the current position with the rest of family courts.  He did, however, specifically state that “there would have to be anonymity for the vulnerable elderly people involved, the details of whose financial affairs were being exposed”.

What is clear is that media presence could boost public confidence and understanding of the Court of Protection after the recent widespread criticism of its workings.

If you have any issues relating to the Court of Protection, you can contact Nia Wharry, Head of Wills & Probate department on Tel: 01256 320 555.