Is the Landlord & Tenant Act 1985 any good?

The Landlord & Tenant Act 1985 is a piece of altruistic and well-intentioned legislation; it was passed for the simple purpose of making one aspect of life a little better and the effort involved in passing it was probably well in excess of any political capital that passing it produced.

The principal problem Parliament was seeking to resolve was that of service charges and their abuse by landlords, something highlighted by the Nugee Report in 1984, although service charges had been recognised as a problem in need of resolution from the early 1970s when under s.90 of the Housing Finance Act 1972 tenants of flats were given the right, in some circumstances, to information as to the make-up of the service charge. As Robert Walker LJ observed in Martin & Seale v Maryland Estates Ltd [1999] 2 EGLR 53:

Parliament has recognised that it is of great concern to tenants, and a potential cause of great friction between landlord and tenants, that tenants may not know what is going on, what is being done, ultimately at their expense.

In Heron Maple House Ltd v Central Estates Ltd [2004] L. & T.R. 17 HHJ Cooke QC said:

10. Practitioners in this field will be familiar with the chequered history of service charges. The service charge is a very necessary instrument where blocks of property (but especially blocks of flats) are let on leases but are managed together and have common services. The cost of servicing the block has to be borne initially by the landlord (or, in some cases, the service company) and then has to be divided up and recovered from the tenants; sometimes the tenants are asked to make payments in advance or on account, especially if the repairs are large.

11 But, at the same time, this necessary and beneficial institution can be subject to abuse. The casebooks are full of examples: repairs done by companies owned by the landlord, landlord’s business expenses tacked on to the service charge, in some cases frankly dishonest overcharging, and in others a complete lack of particularity as to what the charge covered. There is no doubt that, over the years, it has become a fertile ground for dispute.”

When I succeeded, in the first Phillips v Francis decision ([2010] L. & T.R. 28), in arguing that leasehold holiday homes were “dwellings” under s.38(1) of the 1985 Act, I took a certain amount of naive pleasure in the raft of protections the holiday home owners would enjoy under the Act and related legislation as a result.

Superficially, the protections are not inconsiderable; the primary ones are as follows:
• Section 19 of the 1985 Act limits service charges to the extent that they are reasonably incurred and where they are incurred; the services must be of a reasonable standard. Section 27A of the 1985 Act confers a right to apply to the First Tier Tribunal to determine liability to pay service charges.
• Sections 20 and 20ZA  of the 1985 Act limit the relevant contributions of tenants in respect of qualifying works or agreements to £250 unless consultation requirements have either been complied with or dispensed with in relation to the qualifying works or qualifying agreement by the First Tier Tribunal.
• Section 20B of the 1985 Act limits the ability to levy service charges in respect of the relevant costs incurred more than 18 months before a demand for payment.
• Section 20C of the 1985 Act allows tenants to apply for an order that all or any of the costs incurred by the landlord in connection with proceedings before a court or tribunal not be regarded as relevant costs to be taken into account in determining the amount of the service charge.
• Section 21 of the 1985 Act permits a tenant to require the landlord in writing to supply a written summary of the costs incurred; the landlord must comply with the request within one month (or as otherwise provided by s.21) and provide a summary prepared in accordance with the section.
• Section 21A of the 1985 Act permits a tenant to withhold a payment of service charge if the landlord has not supplied a document as required under s.21 or if the formal content of the document supplied by the landlord does not conform substantially with the requirements prescribed.
• Section 21B of the 1985 Act requires a demand for payment of service charge to be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.
• Section 22 of the 1985 Act permits the tenant or secretary of a recognised tenants association to require reasonable facilities to inspect accounts etc. and take copies.
• Section 29 of the 1985 Act confers the right to have a tenants’ association recognised by notice in writing given by the landlord to the secretary of the association or by a certificate of a member of the local rent assessment committee and s. 30B provides for recognised tenants’ associations to be consulted about managing agents.
• Section 30A of the 1985 Act provides tenants with rights relating to insurance of their dwellings.
• Section 42 of the Landlord and Tenant Act 1987 provides that service charge contributions are to be held
in trust.
• Section 81 of the Housing Act 1996 provides that the landlord cannot exercise a right of re-entry or forfeiture for non-payment of a service charge unless the amount of the charge has been agreed or admitted and has been the subject of a determination by a court or tribunal.

Over time my original pleasure has been diminished somewhat by the gradual realisation of just how badly drafted the Act is, even after 5 revisions and with other amendments still pending, and how its deficiencies have not been lessened and, in some respects, how they have been compounded, by decisions of the Courts.

Over the next few weeks I am going to produce a series of articles, each of which will deal with a different aspect of the Act, its historic and current deficiencies, and how it has been applied and, arguably, misapplied. Broadly I will follow through the bullet points above, which means that the first topic I will cover are sections 19 and 27A of the 1985 Act: the reasonableness of service charges and the right to have the liability to pay them determined by the First Tier Tribunal.

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