Property Disputes Update29th August 2013
Landlords & Managing Agents: have you made the necessary changes from 1 July 2013 following creation of the new Property Chamber?
1 July 2013 saw the abolishment of a number of Property Tribunals in England and the creation of the First-tier Tribunal (Property Chamber) which will now deal with all the business of the now abolished Tribunals.
This change gives rise to implications for landlords and managing agents who should now ensure that all their documentation and communications with tenants is amended to reflect the changes, including:
- Service charge summary of tenants’ rights and obligations
- Administration charges summary of tenants’ rights and obligations
- Right to manage counternotices
- Lease extension and collective enfranchisement notices
- Ground rent notices
- Notice to long leaseholders of rent due
- Rent books
- Any correspondence or dialogue with tenants / other parties
All the above should now correctly refer to the First-tier Tribunal (Property Chamber) rather than the old, and now abolished Leasehold Valuation Tribunal, Adjudicator to HM Land Registry, Rent Assessment Committees, The Residential Property Tribunal, Rent Tribunal and Agricultural Lands Tribunal.
Another important implication for landlords is the Tribunal’s ability to make an unlimited wasted costs order against a party who has acted ‘unreasonably’. As was the case before 1 July 2013, the Tribunal is no longer limited to making a costs order of up to £500. It is difficult to say whether such orders will be readily made in practice but precautionary steps should be taken to ensure any dispute with tenants is dealt with as quickly and reasonably as possible to reduce the risk.
The Essentials for Landlords and Managing Agents
A new set of 56 rules will govern the way in which the Property Chamber will deal with cases. Unlike the previous property tribunal rules there is now an express provision setting out the overriding objective of the Rules to enable the Tribunal to deal with cases ‘fairly and justly’; this means the Tribunal is to deal with cases in a way that is proportionate to the complexities together with the anticipated costs involved and the parties’ resources. There is now an obligation on the parties to an application to help the Tribunal to further the overriding objective and cooperate with the Tribunal generally.
Some important rules for landlords and managing agents to note in the meantime are:
- The Rules allow a representative, whether legally qualified or not, not only to speak on behalf of a party to the proceedings at any hearing but to conduct the proceedings as any legal representative would.
- The Tribunal no longer has a limit of £500 when making a costs order. A party can ask for a costs order to be made in respect of its wasted costs against a party (including its representative or representative’s employee) who it considers has acted unreasonably in bringing, defending or conducting proceedings by making an application at any time during the proceedings, orally at a hearing or by making an application within 28 days of the Tribunal disposing of the proceedings. A copy of any application must be served on the other party at the same time as sending it to the Tribunal.
- The Tribunal should seek, where appropriate, to bring the parties’ attention the availability of any appropriate method of alternative dispute resolution and if the parties wish, and it is compatible with the overriding objective, facilitate the use of the alternative procedure.
- Fees will be payable in the same circumstances as have been paid before 1 July 2013 but have increased to take account of inflation.
If you would like to discuss the implications of this change further or require further advice please contact Faiza Ahmad.