A new lease of life: - CentreForum

A New Lease of Lifeenables freeholders to indulge in brinkmanship by opposing aleaseholder’s claim without genuine grounds in the hope that costswill act as a deterrent to them advancing a claim. If leaseholdersproceed, a freeholder may withdraw their opposition at any timewithout having to pay any costs to the leaseholder or tribunal. Theonly cases in which freeholders cannot reclaim their funds is if thetribunal uses a 20C order to disallow claiming all or part of theircosts in service charge.This represents a considerable imbalance, as leaseholders can onlyin rare circumstances receive any costs from a freeholder - up to£500 – if a tribunal rules that they have been deliberately vexatious.The maximum award may just cover administration cost of the LVT,so may not even begin to cover leaseholders’ own legal costs. Thisis in stark contrast to leaseholders having to pay their freeholders’full reasonable costs.Another imbalance in the system is the weak set of disclosurerules which mean that residents can have hundreds of pages ofrelevant documents given to them just hours before a hearing. Thisshould be corrected as it creates an asymmetry of information andfacilitates brinkmanship. Although balance is vital to a professionaland consistent service, brinkmanship or withholding informationbefore a tribunal is not part of this.As well as barriers to reaching a tribunal, its approach can alsohinder leaseholders. The tribunal refers back to the lease agreement,which may itself be unfair and it is more concerned whether themanager has complied with the terms of the lease and provideda reasonable standard of service than with value for money. 58This is because the 1985 Acts stated that service charges must be“reasonably incurred” and can be charged, “only if the services orworks are of a reasonable standard, and the amount payable shallbe limited accordingly.” 59Retirement apartmentsAlmost 30 per cent of leaseholders are retired, many of whominhabit the 100,000 purpose-built leasehold retirement apartmentsin England and Wales. People in their old age face particularly highbarriers to redress because they are less likely to be able to investthe time, effort, money and energy required to successfully take58 An example of an unfair leasehold agreement is one that allows the freeholder tocharge any LVT fees to leaseholders through service charges.59 Landlord and Tenant Act 1985, Chapter 70.34