Commonhold and Leasehold Reform Act 2002 (c. 15)

(The document as of February, 2008)

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(a) if a decision that it has occurred is not appealed against or otherwise challenged, at the end of the period for bringing an appeal or other challenge, or

(b) if such a decision is appealed against or otherwise challenged and not set aside in consequence of the appeal or other challenge, at the time specified in subsection (3).

(3) The time referred to in subsection (2)(b) is the time when the appeal or other challenge is disposed of--

(a) by the determination of the appeal or other challenge and the expiry of the time for bringing a subsequent appeal (if any), or

(b) by its being abandoned or otherwise ceasing to have effect.

(4) In section 168 and this section "long lease of a dwelling" does not include--

(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,

(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or

(5) In section 168 and this section--

"arbitration agreement" and "arbitral tribunal" have the same meaning as in Part 1 of the Arbitration Act 1996 (c. 23) and "post-dispute arbitration agreement", in relation to any breach (or alleged breach), means an arbitration agreement made after the breach has occurred (or is alleged to have occurred),
"dwelling" has the same meaning as in the 1985 Act,
"landlord" and "tenant" have the same meaning as in Chapter 1 of this Part, and
"long lease" has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share.

(6) Section 146(7) of the Law of Property Act 1925 (c. 20) applies for the purposes of section 168 and this section.

(7) Nothing in section 168 affects the service of a notice under section 146(1) of the Law of Property Act 1925 in respect of a failure to pay--

(a) a service charge (within the meaning of section 18(1) of the 1985 Act), or

(b) an administration charge (within the meaning of Part 1 of Schedule 11 to this Act).

170 Forfeiture for failure to pay service charge etc

(1) Section 81 of the Housing Act 1996 (c. 52) (restriction on forfeiture for failure to pay service charge) is amended as follows.

(2) In subsection (1), for the words from "to pay" to the end substitute " by a tenant to pay a service charge or administration charge unless--

(a) it is finally determined by (or on appeal from) a leasehold valuation tribunal or by a court, or by an arbitral tribunal in proceedings pursuant to a post-dispute arbitration agreement, that the amount of the service charge or administration charge is payable by him, or

(b) the tenant has admitted that it is so payable. "

(3) For subsection (2) substitute--

" (2) The landlord may not exercise a right of re-entry or forfeiture by virtue of subsection (1)(a) until after the end of the period of 14 days beginning with the day after that on which the final determination is made. "

(4) For subsection (3) substitute--

" (3) For the purposes of this section it is finally determined that the amount of a service charge or administration charge is payable--

(a) if a decision that it is payable is not appealed against or otherwise challenged, at the end of the time for bringing an appeal or other challenge, or

(b) if such a decision is appealed against or otherwise challenged and not set aside in consequence of the appeal or other challenge, at the time specified in subsection (3A).

(3A) The time referred to in subsection (3)(b) is the time when the appeal or other challenge is disposed of--

(a) by the determination of the appeal or other challenge and the expiry of the time for bringing a subsequent appeal (if any), or

(b) by its being abandoned or otherwise ceasing to have effect. "

(5) After subsection (4) insert--

" (4A) References in this section to the exercise of a right of re-entry or forfeiture include the service of a notice under section 146(1) of the Law of Property Act 1925 (restriction on re-entry or forfeiture). "

(6) In subsection (5), after "this section" insert--

" (a) "administration charge" has the meaning given by Part 1 of Schedule 11 to the Commonhold and Leasehold Reform Act 2002,

(b) "arbitration agreement" and "arbitral tribunal" have the same meaning as in Part 1 of the Arbitration Act 1996 (c. 23) and "post-dispute arbitration agreement", in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen,

(d) " .

171 Power to prescribe additional or different requirements

(1) The appropriate national authority may by regulations prescribe requirements which must be met before a right of re-entry or forfeiture may be exercised in relation to a breach of a covenant or condition in a long lease of an unmortgaged dwelling.

(2) The regulations may specify that the requirements are to be in addition to, or instead of, requirements imposed otherwise than by the regulations.

(3) In this section "long lease of a dwelling" does not include--

(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,

(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or

(4) For the purposes of this section a dwelling is unmortgaged if it is not subject to a mortgage, charge or lien.

(5) In this section--

"dwelling" has the same meaning as in the 1985 Act, and
"long lease" has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share.

Crown application

172 Application to Crown

(1) The following provisions apply in relation to Crown land (as in relation to other land)--

(a) sections 18 to 30B of (and the Schedule to) the 1985 Act (service charges, insurance and managing agents),

(b) Part 2 of the 1987 Act (appointment of manager by leasehold valuation tribunal),

(d) sections 46 to 49 of the 1987 Act (information to be furnished to tenants),

(e) Chapter 5 of Part 1 of the 1993 Act (management audit),

(f) section 81 of the Housing Act 1996 (c. 52) (restriction on termination of tenancy for failure to pay service charge etc.),

(g) section 84 of (and Schedule 4 to) that Act (right to appoint surveyor), and

(h) in this Chapter, the provisions relating to any of the provisions within paragraphs (a) to (g), Part 1 of Schedule 11 and sections 164 to 171.

(2) Land is Crown land if there is or has at any time been an interest or estate in the land--

(a) comprised in the Crown Estate,

(b) belonging to Her Majesty in right of the Duchy of Lancaster,

(d) belonging to a government department or held on behalf of Her Majesty for the purposes of a government department.

(3) No failure by the Crown to perform a duty imposed by or by virtue of any of sections 21 to 23A of, or any of paragraphs 2 to 4A of the Schedule to, the 1985 Act makes the Crown criminally liable; but the High Court may declare any such failure without reasonable excuse to be unlawful.

(4) Any sum payable under any of the provisions mentioned in subsection (1) by the Chancellor of the Duchy of Lancaster may be raised and paid under section 25 of the Duchy of Lancaster Act 1817 (c. 97) as an expense incurred in improvement of land belonging to Her Majesty in right of the Duchy.

(5) Any sum payable under any such provision by the Duke of Cornwall (or any other possessor for the time being of the Duchy of Cornwall) may be raised and paid under section 8 of the Duchy of Cornwall Management Act 1863 (c. 49) as an expense incurred in permanently improving the possessions of the Duchy.

(6) In section 56 of the 1987 Act (Crown land)--

(a) in subsection (1), for "This Act" substitute "Parts 1 and 3 and sections 42 to 42B (and so much of this Part as relates to those provisions)", and

(b) in subsection (3), for "this Act" substitute "the provisions mentioned in subsection (1)".

Chapter 6 Leasehold valuation tribunals

173 Leasehold valuation tribunals

(1) Any jurisdiction conferred on a leasehold valuation tribunal by or under any enactment is exercisable by a rent assessment committee constituted in accordance with Schedule 10 to the Rent Act 1977 (c. 42).

(2) When so constituted for exercising any such jurisdiction a rent assessment committee is known as a leasehold valuation tribunal.

174 Procedure

Schedule 12 (leasehold valuation tribunals: procedure) has effect.

175 Appeals

(1) A party to proceedings before a leasehold valuation tribunal may appeal to the Lands Tribunal from a decision of the leasehold valuation tribunal.

(2) But the appeal may be made only with the permission of--

(a) the leasehold valuation tribunal, or

(b) the Lands Tribunal.

(3) And it must be made within the time specified by rules under section 3(6) of the Lands Tribunal Act 1949 (c. 42).

(4) On the appeal the Lands Tribunal may exercise any power which was available to the leasehold valuation tribunal.

(5) And a decision of the Lands Tribunal on the appeal may be enforced in the same way as a decision of the leasehold valuation tribunal.

(6) The Lands Tribunal may not order a party to the appeal to pay costs incurred by another party in connection with the appeal unless he has, in the opinion of the Lands Tribunal, acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the appeal.

(7) In such a case the amount he may be ordered to pay shall not exceed the maximum amount which a party to proceedings before a leasehold valuation tribunal may be ordered to pay in the proceedings under or by virtue of paragraph 10(3) of Schedule 12.

(8) No appeal lies from a decision of a leasehold valuation tribunal to the High Court by virtue of section 11(1) of the Tribunals and Inquiries Act 1992 (c. 53).

(9) And no case may be stated for the opinion of the High Court in respect of such a decision by virtue of that provision.

(10) For the purposes of section 3(4) of the Lands Tribunal Act 1949 (which enables a person aggrieved by a decision of the Lands Tribunal to appeal to the Court of Appeal) a leasehold valuation tribunal is not a person aggrieved.

176 Consequential amendments

Schedule 13 (minor and consequential amendments about leasehold valuation tribunals) has effect.

Chapter 7 General

177 Wales

The references to the 1985 Act, the 1987 Act and the 1993 Act in Schedule 1 to the National Assembly for Wales (Transfer of Functions) Order 1999 (S.I.1999/672) are to be treated as referring to those Acts as amended by this Part.

178 Orders and regulations

(1) An order or regulations under any provision of this Part--

(a) may include incidental, supplementary, consequential and transitional provision,

(b) may make provision generally or only in relation to specified cases, and

(2) Regulations under Schedule 12 may make different provision for different areas.

(3) Any power to make an order or regulations under this Part is exercisable by statutory instrument.

(4) Regulations shall not be made by the Secretary of State under section 167 or 171 or paragraph 9(3)(b) or 10(3)(b) of Schedule 12 unless a draft of the instrument containing them has been laid before and approved by a resolution of each House of Parliament.

(5) A statutory instrument containing an order or regulations made by the Secretary of State under this Part shall, if not so approved, be subject to annulment in pursuance of a resolution of either House of Parliament.

179 Interpretation

(1) In this Part "the appropriate national authority" means--

(a) the Secretary of State (as respects England), and

(b) the National Assembly for Wales (as respects Wales).

(2) In this Part--

"the 1967 Act" means the Leasehold Reform Act 1967 (c. 88),
"the 1985 Act" means the Landlord and Tenant Act 1985 (c. 70),
"the 1987 Act" means the Landlord and Tenant Act 1987 (c. 31), and
"the 1993 Act" means the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28).

Part 3 Supplementary

180 Repeals

Schedule 14 (repeals) has effect.

181 Commencement etc

(1) Apart from section 104 and sections 177 to 179, the preceding provisions (and the Schedules) come into force in accordance with provision made by order made by the appropriate authority.

(2) The appropriate authority may by order make any transitional provisions or savings in connection with the coming into force of any provision in accordance with an order under subsection (1).

(3) The power to make orders under subsections (1) and (2) is exercisable by statutory instrument.

(4) In this section "the appropriate authority" means--

(a) in relation to any provision of Part 1 or section 180 and Schedule 14 so far as relating to section 104, the Lord Chancellor, and

(b) in relation to any provision of Part 2 or section 180 and Schedule 14 so far as otherwise relating, the Secretary of State (as respects England) and the National Assembly for Wales (as respects Wales).

182 Extent

This Act extends to England and Wales only.

183 Short title

This Act may be cited as the Commonhold and Leasehold Reform Act 2002.

SCHEDULES

Section 2

SCHEDULE 1 Application for registration: documents

Introduction

1 This Schedule lists the documents which are required by section 2 to accompany an application for the registration of a freehold estate as a freehold estate in commonhold land.

Commonhold association documents

2 The commonhold association's certificate of incorporation under section 13 of the Companies Act 1985 (c. 6).

3 Any altered certificate of incorporation issued under section 28 of that Act.

4 The memorandum and articles of association of the commonhold association.

Commonhold community statement

5 The commonhold community statement.

Consent

6 (1) Where consent is required under or by virtue of section 3--

(a) the consent,

(b) an order of a court by virtue of section 3(2)(f) dispensing with the requirement for consent, or

(2) In the case of a conditional order under section 3(2)(f), the order must be accompanied by evidence that the condition has been complied with.

Certificate

7 A certificate given by the directors of the commonhold association that--

(a) the memorandum and articles of association submitted with the application comply with regulations under paragraph 2(1) of Schedule 3,

(b) the commonhold community statement submitted with the application satisfies the requirements of this Part,

(d) the commonhold association has not traded, and

(e) the commonhold association has not incurred any liability which has not been discharged.

Section 4

SCHEDULE 2 Land which may not be commonhold land

"Flying freehold"

1 (1) Subject to sub-paragraph (2), an application may not be made under section 2 wholly or partly in relation to land above ground level ("raised land") unless all the land between the ground and the raised land is the subject of the same application.

(2) An application for the addition of land to a commonhold in accordance with section 41 may be made wholly or partly in relation to raised land if all the land between the ground and the raised land forms part of the commonhold to which the raised land is to be added.

Agricultural land

2 An application may not be made under section 2 wholly or partly in relation to land if--

(a) it is agricultural land within the meaning of the Agriculture Act 1947 (c. 48),

(b) it is comprised in a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5), or

Contingent title

3 (1) An application may not be made under section 2 if an estate in the whole or part of the land to which the application relates is a contingent estate.

(2) An estate is contingent for the purposes of this paragraph if (and only if)--

(a) it is liable to revert to or vest in a person other than the present registered proprietor on the occurrence or non-occurrence of a particular event, and

(b) the reverter or vesting would occur by operation of law as a result of an enactment listed in sub-paragraph (3).

(3) The enactments are--

(a) the School Sites Act 1841 (c. 38) (conveyance for use as school),

(b) the Lands Clauses Acts (compulsory purchase),

(d) the Places of Worship Sites Act 1873 (c. 50) (sites for places of worship).

(4) Regulations may amend sub-paragraph (3) so as to--

(a) add an enactment to the list, or

(b) remove an enactment from the list.

Section 34

SCHEDULE 3 Commonhold association

Part 1 Memorandum and articles of association

Introduction

1 In this Schedule--

(a) "memorandum" means the memorandum of association of a commonhold association, and

(b) "articles" means the articles of association of a commonhold association.

Form and content

2 (1) Regulations shall make provision about the form and content of the memorandum and articles.

(2) A commonhold association may adopt provisions of the regulations for its memorandum or articles.

(3) The regulations may include provision which is to have effect for a commonhold association whether or not it is adopted under sub-paragraph (2).

(4) A provision of the memorandum or articles shall have no effect to the extent that it is inconsistent with the regulations.

(5) Regulations under this paragraph shall have effect in relation to a memorandum or articles--

(a) irrespective of the date of the memorandum or articles, but

(b) subject to any transitional provision of the regulations.

Alteration

3 (1) An alteration of the memorandum or articles of association shall have no effect until the altered version is registered in accordance with this paragraph.

(2) If the commonhold association makes an application under this sub-paragraph the Registrar shall arrange for an altered memorandum or altered articles to be kept in his custody, and referred to in the register, in place of the unaltered version.

(3) An application under sub-paragraph (2) must be accompanied by a certificate given by the directors of the commonhold association that the altered memorandum or articles comply with regulations under paragraph 2(1).

(4) Where the Registrar amends the register on an application under sub-paragraph (2) he shall make any consequential amendments to the register which he thinks appropriate.

Disapplication of Companies Act 1985

4 (1) The following provisions of the Companies Act 1985 (c. 6) shall not apply to a commonhold association--

(a) sections 2(7) and 3 (memorandum), and

(b) section 8 (articles of association).

(2) No application may be made under paragraph 3(2) for the registration of a memorandum altered by special resolution in accordance with section 4(1) of the Companies Act 1985 (objects) unless--

(a) the period during which an application for cancellation of the alteration may be made under section 5(1) of that Act has expired without an application being made,

(b) any application made under that section has been withdrawn, or

Part 2 Membership

Pre-commonhold period

5 During the period beginning with incorporation of a commonhold association and ending when land specified in its memorandum becomes commonhold land, the subscribers (or subscriber) to the memorandum shall be the sole members (or member) of the association.

Transitional period

6 (1) This paragraph applies to a commonhold association during a transitional period.

(2) The subscribers (or subscriber) to the memorandum shall continue to be members (or the member) of the association.

(3) A person who for the time being is the developer in respect of all or part of the commonhold is entitled to be entered in the register of members of the association.

Unit-holders

7 A person is entitled to be entered in the register of members of a commonhold association if he becomes the unit-holder of a commonhold unit in relation to which the association exercises functions--

(a) on the unit becoming commonhold land by registration with unit-holders under section 9, or

(b) on the transfer of the unit.

Joint unit-holders

8 (1) This paragraph applies where two or more persons become joint unit-holders of a commonhold unit--

(a) on the unit becoming commonhold land by registration with unit-holders under section 9, or

(b) on the transfer of the unit.

(2) If the joint unit-holders nominate one of themselves for the purpose of this sub-paragraph, he is entitled to be entered in the register of members of the commonhold association which exercises functions in relation to the unit.

(3) A nomination under sub-paragraph (2) must--

(a) be made in writing to the commonhold association, and

(b) be received by the association before the end of the prescribed period.

(4) If no nomination is received by the association before the end of the prescribed period the person whose name appears first in the proprietorship register is on the expiry of that period entitled to be entered in the register of members of the association.

(5) On the application of a joint unit-holder the court may order that a joint unit-holder is entitled to be entered in the register of members of a commonhold association in place of a person who is or would be entitled to be registered by virtue of sub-paragraph (4).

(6) If joint unit-holders nominate one of themselves for the purpose of this sub-paragraph, the nominated person is entitled to be entered in the register of members of the commonhold association in place of the person entered by virtue of--

(a) sub-paragraph (2),

(b) sub-paragraph (5), or

Self-membership

9 A commonhold association may not be a member of itself.

No other members

10 A person may not become a member of a commonhold association otherwise than by virtue of a provision of this Schedule.

Effect of registration

11 A person who is entitled to be entered in the register of members of a commonhold association becomes a member when the company registers him in pursuance of its duty under section 352 of the Companies Act 1985 (c. 6) (duty to maintain register of members).

Termination of membership

12 Where a member of a commonhold association ceases to be a unit-holder or joint unit-holder of a commonhold unit in relation to which the association exercises functions--

(a) he shall cease to be a member of the commonhold association, but

(b) paragraph (a) does not affect any right or liability already acquired or incurred in respect of a matter relating to a time when he was a unit-holder or joint unit-holder.

13 A member of a commonhold association may resign by notice in writing to the association if (and only if) he is a member by virtue of paragraph 5 or 6 of this Schedule (and not also by virtue of any other paragraph).

Register of members

14 (1) Regulations may make provision about the performance by a commonhold association of its duty under section 352 of the Companies Act 1985 (c. 6) (duty to maintain register of members) where a person--

(a) becomes entitled to be entered in the register by virtue of paragraphs 5 to 8, or

(b) ceases to be a member by virtue of paragraph 12 or on resignation.

(2) The regulations may in particular require entries in the register to be made within a specified period.

(3) A period specified under sub-paragraph (2) may be expressed to begin from--

(a) the date of a notification under section 15(3),

(b) the date on which the directors of the commonhold association first become aware of a specified matter, or

(4) A requirement by virtue of this paragraph shall be treated as a requirement of section 352 for the purposes of section 352(5) (fines).

Companies Act 1985

15 (1) Section 22(1) of the Companies Act 1985 (initial members) shall apply to a commonhold association subject to this Schedule.

(2) Sections 22(2) and 23 of that Act (members: new members and holding company) shall not apply to a commonhold association.

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