Commonhold and Leasehold Reform Act 2002 (c. 15)

(The document as of February, 2008)

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Information held by superior landlord

1 For section 23 of the 1985 Act (information held by superior landlord) substitute--

" 23 Information held by superior landlord

(1) If a statement of account which the landlord is required to supply under section 21 relates to matters concerning a superior landlord and the landlord is not in possession of the relevant information--

(a) he may by notice in writing require the person who is his landlord to give him the relevant information (and so on, if that person is not himself the superior landlord), and

(b) the superior landlord must comply with the requirement within a reasonable time.

(2) If a notice under section 22 imposes a requirement in relation to documents held by a superior landlord--

(a) the landlord shall immediately inform the tenant or secretary of that fact and of the name and address of the superior landlord, and

(b) section 22 then applies in relation to the superior landlord (as in relation to the landlord). "

Change of landlord

2 After that section insert--

" 23A Effect of change of landlord

(1) This section applies where, at a time when a duty imposed on the landlord or a superior landlord by or by virtue of any of sections 21 to 23 remains to be discharged by him, he disposes of the whole or part of his interest as landlord or superior landlord to another person.

(2) If the landlord or superior landlord is, despite the disposal, still in a position to discharge the duty to any extent, he remains responsible for discharging it to that extent.

(3) If the other person is in a position to discharge the duty to any extent, he is responsible for discharging it to that extent.

(4) Where the other person is responsible for discharging the duty to any extent (whether or not the landlord or superior landlord is also responsible for discharging it to that or any other extent)--

(a) references to the landlord or superior landlord in sections 21 to 23 are to, or include, the other person so far as is appropriate to reflect his responsibility for discharging the duty to that extent, but

(b) in connection with its discharge by the other person, section 22(6) applies as if the reference to the day on which the landlord receives the notice were to the date of the disposal referred to in subsection (1). "

Assignment

3 For section 24 of the 1985 Act substitute--

" 24 Effect of assignment

The assignment of a tenancy does not affect any duty imposed by or by virtue of any of sections 21 to 23A; but a person is not required to comply with more than a reasonable number of requirements imposed by any one person. "

Offences

4 In section 25(1) of the 1985 Act (offences), for "by section 21, 22 or 23" substitute "by or by virtue of any of sections 21 to 23A".

Exceptions

5 In sections 26(1) and 27 of the 1985 Act (exceptions from sections 18 to 25), for "and requests for information about costs)" substitute ", statements of account and inspection etc. of documents)".

Accountants

6 (1) Section 28 of the 1985 Act (meaning of "qualified accountant") is amended as follows.

(2) In subsection (1), for "21(6) (certification of summary of information about relevant costs)" substitute "21(3)(a) (certification of statements of account)".

(3) In subsection (4)(d), for "any of the costs covered by the summary in question relate" substitute "the statement of account in question relates".

(4) In subsection (5A)--

(a) for "any costs relate" substitute "a statement of account relates", and

(b) for "those costs" substitute "costs covered by the statement of account".

(5) In subsection (6), after "landlord is" insert "an emanation of the Crown,".

7 In section 39 of the 1985 Act (defined expressions), in the entry relating to "qualified accountant", for "21(6)" substitute "21(3)(a)".

Insurance

8 (1) Paragraph 2 of the Schedule to the 1985 Act (request for summary of insurance cover) is amended as follows.

(2) In sub-paragraph (1), for "require the landlord in writing" substitute "by notice in writing require the landlord".

(3) In sub-paragraph (2), for "request may be made" substitute "notice may be served".

(4) In sub-paragraph (3)--

(a) for "request is duly" substitute "notice under this paragraph is duly", and

(b) for "whom a request" substitute "whom such a notice".

(5) In sub-paragraph (4), for "one month of the request," substitute "the period of twenty-one days beginning with the day on which he receives the notice,".

(6) In sub-paragraph (6), for "request" substitute "notice".

9 For paragraph 3 of that Schedule (request to inspect insurance policy etc. after obtaining summary of insurance cover) substitute--

" Inspection of insurance policy etc.

3 (1) Where a service charge is payable by the tenant of a dwelling which consists of or includes an amount payable directly or indirectly for insurance, the tenant may by notice in writing require the landlord--

(a) to afford him reasonable facilities for inspecting any relevant policy or associated documents and for taking copies of or extracts from them, or

(b) to take copies of or extracts from any such policy or documents and either send them to him or afford him reasonable facilities for collecting them (as he specifies).

(2) 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).

(3) A notice under this paragraph 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 shall forward it as soon as may be to the landlord.

(4) The landlord shall comply with a requirement imposed by a notice under this paragraph within the period of twenty-one days beginning with the day on which he receives the notice.

(5) To the extent that a notice under this paragraph requires the landlord to afford facilities for inspecting documents--

(a) he shall 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.

(6) The landlord may make a reasonable charge for doing anything else in compliance with a requirement imposed by a notice under this paragraph.

(7) In this paragraph--

"relevant policy" includes a policy of insurance under which the dwelling was insured for the period of insurance immediately preceding that current when the notice is served (being, in the case of a flat, a policy covering the building containing it), and
"associated documents" means accounts, receipts or other documents which provide evidence of payment of any premiums due under a relevant policy in respect of the period of insurance which is current when the notice is served or the period of insurance immediately preceding that period. "

10 (1) Paragraph 4 of that Schedule (insurance effected by superior landlord) is amended as follows.

(2) In sub-paragraph (1)--

(a) for "a request is made" substitute "a notice is served",

(b) for "to whom the request is made" substitute "on whom the notice is served",

(c) for "make a written request for the relevant information to the person who is his landlord" substitute "by notice in writing require the person who is his landlord to give him the relevant information",

(d) for "that request" substitute "the notice", and

(e) for "secretary's request" substitute "secretary's notice".

(3) In sub-paragraph (2)--

(a) for "request under paragraph 3 relates" substitute "notice under paragraph 3 imposes a requirement relating", and

(b) for "to whom the request is made" substitute "on whom the notice is served".

11 After that paragraph insert--

" Effect of change of landlord

4A (1) This paragraph applies where, at a time when a duty imposed on the landlord or a superior landlord by virtue of any of paragraphs 2 to 4 remains to be discharged by him, he disposes of the whole or part of his interest as landlord or superior landlord).

(2) If the landlord or superior landlord is, despite the disposal, still in a position to discharge the duty to any extent, he remains responsible for discharging it to that extent.

(3) If the other person is in a position to discharge the duty to any extent, he is responsible for discharging it to that extent.

(a) references to the landlord or superior landlord in paragraphs 2 to 4 are to, or include, the other person so far as is appropriate to reflect his responsibility for discharging the duty to that extent, but

(b) in connection with its discharge by that person, paragraphs 2(4) and 3(4) apply as if the reference to the day on which the landlord receives the notice were to the date of the disposal referred to in sub-paragraph (1). "

12 In paragraph 5 of that Schedule, for the words from "the validity" onwards substitute "any duty imposed by virtue of any of paragraphs 2 to 4A; but a person is not required to comply with more than a reasonable number of requirements imposed by any one person."

13 In paragraph 6 of that Schedule, for "paragraph 2, 3 or 4" substitute "any of paragraphs 2 to 4A"; and for the heading before that paragraph substitute "Offence of failure to comply".

Service charge contributions: appointment of manager

14 In section 24(2) of the 1987 Act (grounds for appointment of manager), before paragraph (ac) insert--

" (abb) where the tribunal is satisfied--

(i) that there has been a failure to comply with a duty imposed by or by virtue of section 42 or 42A of this Act, and

(ii) that it is just and convenient to make the order in all the circumstances of the case; " .

Trust of service charges paid by only one tenant

15 (1) Section 42 of the 1987 Act (service charge contributions of tenants to be held in trust) is amended as follows.

(2) In subsection (1)--

(a) after "costs" insert ", or the tenant of a dwelling may be required under the terms of his lease to contribute to costs to which no other tenant of a dwelling may be required to contribute,",

(b) at the end of the definition of "the contributing tenants" insert "and "the sole contributing tenant" means that tenant;", and

(c) in the definition of "the payee", for "under the terms of their leases" substitute ", or that tenant, under the terms of their leases, or his lease".

(3) In subsection (2), after "tenants" insert ", or the sole contributing tenant,".

(4) In subsection (3), insert at the end ", or the person who is the sole contributing tenant for the time being."

(5) In subsection (4), insert at the end "or the sole contributing tenant shall be treated as so entitled to the residue of any such fund."

(6) In subsection (6), for "a contributing tenant" substitute "any of the contributing tenants".

(7) In subsection (7), for "If after the termination of any such lease there are no longer any contributing tenants," substitute "On the termination of the lease of the last of the contributing tenants, or of the lease of the sole contributing tenant,".

(8) In subsection (8)--

(a) for "a contributing tenant" substitute "any of the contributing tenants, or the sole contributing tenant,", and

(b) after "his lease" insert "(whenever it was granted)".

(9) In subsection (9)--

(a) after "so created" insert ", in the case of a lease of any of the contributing tenants,", and

(b) insert at the end "or, in the case of the lease of the sole contributing tenant, before the commencement of paragraph 15 of Schedule 10 to the Commonhold and Leasehold Reform Act 2002."

Management audit

16 (1) Section 79 of the 1993 Act (rights exercisable in connection with management audit) is amended as follows.

(2) In subsection (1), for "subsection (2)" substitute "subsections (2) and (2A)".

(3) For subsection (2) substitute--

" (2) The right conferred on the auditor by this subsection is a right to require the landlord--

(a) to afford him reasonable facilities for inspecting accounts, receipts or other documents relevant to the matters which must be shown in any statement of account required to be supplied to the qualifying tenants of the constituent dwellings under section 21 of the 1985 Act and for taking copies of or extracts from them, or

(b) to take copies of or extracts from any such accounts, receipts or other documents and either send them to him or afford him reasonable facilities for collecting them (as he specifies).

(2A) The right conferred on the auditor by this subsection is a right to require the landlord or any relevant person--

(a) to afford him reasonable facilities for inspecting any other documents sight of which is reasonably required by him for the purpose of carrying out the audit 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 the auditor specifies). "

(4) In subsection (3), for "subsection (2)" substitute "subsections (2) and (2A)".

(5) For subsections (5) and (6) substitute--

" (5) To the extent that a requirement imposed under this section on the landlord or any relevant person requires him to afford facilities for inspecting documents, he shall do so free of charge; but the landlord may treat as part of his costs of management any costs incurred by him in doing so.

(6) The landlord or a relevant person may make a reasonable charge for doing anything else in compliance with such a requirement. "

(6) In subsection (8)(a), for "being afforded any such facilities as are mentioned in subsection (2)" substitute "a requirement imposed under subsection (2) or (2A)".

17 In section 80(3) of the 1993 Act (matters to be contained in notice of exercise of right management audit), for paragraph (c) substitute--

" (c) specify any documents or description of documents in respect of which a requirement is imposed on him under section 79(2) or (2A); and " .

18 (1) Section 81 of the 1993 Act (procedure following giving of notice under section 80) is amended as follows.

(2) In subsection (1), for paragraphs (a) and (b) substitute--

" (a) comply with it so far as it relates to documents within section 79(2);

(b) either--

(i) comply with it, or

(ii) give the auditor a notice stating that he objects to doing so for such reasons as are specified in the notice,

so far as it relates to documents within section 79(2A); and " .

(3) In subsection (3), for the words from "requiring him" to the end substitute " , then within the period of one month beginning with the date of the giving of the notice, he shall either--

(a) comply with it, or

(b) give the auditor a notice stating that he objects to doing so for such reasons as are specified in the notice,

in the case of every document or description of document specified in the notice. "

(4) In subsection (5), for "paragraph (a) or (b) of section 79(2)" substitute "section 79(2) or (2A)".

19 In section 82 of the 1993 Act (information held by superior landlord), for subsections (1) and (2) substitute--

" (1) Where the landlord is given a notice under section 80 imposing on him a requirement relating to any documents which are held by a superior landlord, he shall inform the auditor as soon as may be of that fact and of the name and address of the superior landlord.

(2) The auditor may then give the superior landlord a notice requiring him to comply with the requirement. "

Section 158

SCHEDULE 11 Administration charges

Part 1 Reasonableness of administration charges

Meaning of "administration charge"

1 (1) In this Part of this Schedule "administration charge" means an amount payable by a tenant of a dwelling as part of or in addition to the rent which is payable, directly or indirectly--

(a) for or in connection with the grant of approvals under his lease, or applications for such approvals,

(b) for or in connection with the provision of information or documents by or on behalf of the landlord or a person who is party to his lease otherwise than as landlord or tenant,

(c) in respect of a failure by the tenant to make a payment by the due date to the landlord or a person who is party to his lease otherwise than as landlord or tenant, or

(d) in connection with a breach (or alleged breach) of a covenant or condition in his lease.

(2) But an amount payable by the tenant of a dwelling the rent of which is registered under Part 4 of the Rent Act 1977 (c. 42) is not an administration charge, unless the amount registered is entered as a variable amount in pursuance of section 71(4) of that Act.

(3) In this Part of this Schedule "variable administration charge" means an administration charge payable by a tenant which is neither--

(a) specified in his lease, nor

(b) calculated in accordance with a formula specified in his lease.

(4) An order amending sub-paragraph (1) may be made by the appropriate national authority.

Reasonableness of administration charges

2 A variable administration charge is payable only to the extent that the amount of the charge is reasonable.

3 (1) Any party to a lease of a dwelling may apply to a leasehold valuation tribunal for an order varying the lease in such manner as is specified in the application on the grounds that--

(a) any administration charge specified in the lease is unreasonable, or

(b) any formula specified in the lease in accordance with which any administration charge is calculated is unreasonable.

(2) If the grounds on which the application was made are established to the satisfaction of the tribunal, it may make an order varying the lease in such manner as is specified in the order.

(3) 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.

(4) The tribunal may, instead of making an order varying the lease in such manner as is specified in the order, make an order directing the parties to the lease to vary it in such manner as is so specified.

(5) The tribunal may by order direct that a memorandum of any variation of a lease effected by virtue of this paragraph be endorsed on such documents as are specified in the order.

(6) Any such variation of a lease shall be binding not only on the parties to the lease for the time being but also on other persons (including any predecessors in title), whether or not they were parties to the proceedings in which the order was made.

Notice in connection with demands for administration charges

4 (1) A demand for the payment of an administration charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to administration charges.

(2) The appropriate national authority may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.

(3) A tenant may withhold payment of an administration charge which has been demanded from him if sub-paragraph (1) is not complied with in relation to the demand.

(4) Where a tenant withholds an administration charge under this paragraph, any provisions of the lease relating to non-payment or late payment of administration charges do not have effect in relation to the period for which he so withholds it.

Liability to pay administration charges

5 (1) An application may be made to a leasehold valuation tribunal for a determination whether an administration 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,

(d) the date at or by which it is payable, and

(e) the manner in which it is payable.

(2) Sub-paragraph (1) applies whether or not any payment has been made.

(3) The jurisdiction conferred on a leasehold valuation tribunal in respect of any matter by virtue of sub-paragraph (1) is in addition to any jurisdiction of a court in respect of the matter.

(4) No application under sub-paragraph (1) 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,

(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 matter of an application under sub-paragraph (1).

Interpretation

6 (1) This paragraph applies for the purposes of this Part of this Schedule.

(2) "Tenant" includes a statutory tenant.

(3) "Dwelling" and "statutory tenant" (and "landlord" in relation to a statutory tenant) have the same meanings as in the 1985 Act.

(4) "Post-dispute arbitration agreement", in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen.

(5) "Arbitration agreement" and "arbitral tribunal" have the same meanings as in Part 1 of the Arbitration Act 1996 (c. 23).

Part 2 Amendments of Landlord and Tenant Act 1987

7 The 1987 Act has effect subject to the following amendments.

8 (1) Section 24 (appointment of manager by leasehold valuation tribunal) is amended as follows.

(2) In subsection (2), after paragraph (ab) insert--

" (aba) where the tribunal is satisfied--

(i) that unreasonable variable administration charges have been made, or are proposed or likely to be made, and

(ii) that it is just and convenient to make the order in all the circumstances of the case; " .

(3) After subsection (2A) insert--

" (2B) In subsection (2)(aba) "variable administration charge" has the meaning given by paragraph 1 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002. "

9 In section 46 (interpretation of provisions concerning information to be furnished to tenants), insert at the end--

" (3) In this Part "administration charge" has the meaning given by paragraph 1 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002. "

10 (1) Section 47 (landlord's name and address to be contained in demands for rent etc.) is amended as follows.

(2) In subsection (2), after "service charge" insert "or an administration charge".

(3) In subsection (3), after "service charges" insert "or (as the case may be) administration charges".

11 (1) Section 48 (notification by landlord of address for service of notices) is amended as follows.

(2) In subsection (2), for "or service charge" substitute ", service charge or administration charge".

(3) In subsection (3)--

(a) for "or service charge" substitute ", service charge or administration charge", and

(b) for "or (as the case may be) service charges" substitute ", service charges or (as the case may be) administration charges".

Section 174

SCHEDULE 12 Leasehold valuation tribunals: procedure

Procedure regulations

1 The appropriate national authority may make regulations about the procedure of leasehold valuation tribunals ("procedure regulations").

Applications

2 Procedure regulations may include provision--

(a) about the form of applications to leasehold valuation tribunals,

(b) about the particulars that must be contained in such applications,

(d) for securing consistency where numerous applications are or may be brought in respect of the same or substantially the same matters.

Transfers

3 (1) Where in any proceedings before a court there falls for determination a question falling within the jurisdiction of a leasehold valuation tribunal, the court--

(a) may by order transfer to a leasehold valuation tribunal so much of the proceedings as relate to the determination of that question, and

(b) may then dispose of all or any remaining proceedings, or adjourn the disposal of all or any remaining proceedings pending the determination of that question by the leasehold valuation tribunal, as it thinks fit.

(2) When the leasehold valuation tribunal has determined the question, the court may give effect to the determination in an order of the court.

(3) Rules of court may prescribe the procedure to be followed in a court in connection with or in consequence of a transfer under this paragraph.

(4) Procedure regulations may prescribe the procedure to be followed in a leasehold valuation tribunal consequent on a transfer under this paragraph.

Information

4 (1) A leasehold valuation tribunal may serve a notice requiring any party to proceedings before it to give to the leasehold valuation tribunal any information which the leasehold valuation tribunal may reasonably require.

(2) The information shall be given to the leasehold valuation tribunal within such period (not being less than 14 days) from the service of the notice as is specified in the notice.

(3) A person commits an offence if he fails, without reasonable excuse, to comply with a notice served on him under sub-paragraph (1).

(4) A person guilty of an offence under sub-paragraph (3) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Pre-trial reviews

5 (1) Procedure regulations may include provision for the holding of a pre-trial review (on the application of a party to proceedings or on the motion of a leasehold valuation tribunal).

(2) Procedure regulations may provide for the exercise of the functions of a leasehold valuation tribunal in relation to, or at, a pre-trial review by a single member of the panel provided for in Schedule 10 to the Rent Act 1977 (c. 42) who is qualified to exercise them.

(3) A member is qualified to exercise the functions specified in sub-paragraph (2) if he was appointed to that panel by the Lord Chancellor.

Parties

6 Procedure regulations may include provision enabling persons to be joined as parties to proceedings.

Dismissal

7 Procedure regulations may include provision empowering leasehold valuation tribunals to dismiss applications or transferred proceedings, in whole or in part, on the ground that they are--

(a) frivolous or vexatious, or

(b) otherwise an abuse of process.

Determination without hearing

8 (1) Procedure regulations may include provision for the determination of applications or transferred proceedings without an oral hearing.

(2) Procedure regulations may provide for the determinations without an oral hearing by a single member of the panel provided for in Schedule 10 to the Rent Act 1977.

Fees

9 (1) Procedure regulations may include provision requiring the payment of fees in respect of an application or transfer of proceedings to, or oral hearing by, a leasehold valuation tribunal in a case under--

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