We previously wrote in our Legal Update from March 2021, entitled Address for service - getting this right, on the importance of ensuring you use the correct address for service of demands. This applies to both service charge and ground rent demands and we emphasised that if you get this wrong, demands may be invalid. The case below further supports this, specifically in relation to ground rent demands, and the facts are the reverse of those set out in the above referred to.  

In the case of Obi-Ezekpazu v (1) Avon Ground Rents Ltd (2) Gypsy Corner Management (2022) which was ruled upon by the Upper Tribunal in May 2022, the issue on which dispute had arisen was whether demands for rent served at the property address were validly served in the specific circumstances of the case.

The Facts

The Tenant was the original Leaseholder of a new flat purchased by her in 2006.  The lease was a tri-parte lease with a Landlord who collected rent and separately, a Management Company who were ostensibly responsible for all other management obligations.

Initially the Tenant lived in the flat and it was the address shown for her both on the face of the lease and in the registered title of the flat at HM Land Registry.  In 2010 she moved from the flat to a new address and, at that time, informed the Managing Agent, Crabtree, who worked for both the Landlord and the Management Company, of her new address to which she wished them to send future demands.

In 2013 the Management Company appointed alternative Managing Agents (Y&Y). Unfortunately the hand over by Crabtree was lacking and the notice of the change of address for service from 2010 was not passed to Y&Y, such that they were unaware of it and thereafter served future service charge demands at the flat, not the alternative address.

Also, in 2013 the freehold was purchased by Avon Ground Rents who appointed their own agent to collect future rents.  Avon Ground Rents were also unaware of the notice of change of address.  

Section 166 Commonhold and Leasehold Reform Act 2022

Section 166(6) of the Commonhold and Leasehold Reform Act 2002 requires that if a ground rent demand is sent by post (as was the case here), it must be addressed to a tenant at the subject dwelling unless the tenant has notified the landlord in writing of a different address in England and Wales at which the tenant wishes to be served notices under that section (and in which case the notice must be served at that alternative address).

The Demands

In this case, demands for ground rent pursuant to Section 166 were posted to the Tenant at her flat address and not to the alternative address provided in 2010 because neither the Landlord or the new agents had received notice of that address via the former agent.  The Tenant argued in the FTT  that service at the flat address was not good service as the Landlord (and their agent) would have known, by virtue of the notice provided in 2010, that she required service at the alternative address.

The FTT rejected her argument and found that the demands had been properly served because the Tenant had not notified the new Landlord herself when the freehold title was sold and that the new Landlord had, in considering the address of the Tenant as shown on the lease relating to the flat and at HMLR on the leasehold title for the flat, undertaken sufficient reasonable steps to confirm the correct address for service in the absence of alternative notice.  

This latter point was appealed by the Tenant to the UT.

The decision of the UT

The Upper Tribunal considered that s.166(6) CLRA2002 requires that a s.166 rent demand notice sent by post will be served if sent to the last address notified to the Landlord.

The UT found that the tenant had notified the Landlord in 2010 of her alternative address for service and, as such, the address for service nominated in 2010 was thereafter the correct and only address for service to be used for the rent demands.  As the s.166 had been sent to the flat only, and not the nominated alternative address, the Landlord had not served the notice at a valid address for service and so no rent was due until the valid address was used.

The effect of this decision was to preclude the Landlord from recovering not only the rent for the relevant period until re-demanded (if not prevented by s.19 Limitation Act 1980), but also administration costs that it had incurred in seeking to enforce payment of that rent.

The lesson learned

This case reinforces our advice to serve demands on lessees only at the address they have provided for service and not to assume other addresses which have been used in the past will suffice.  It emphasises the need to maintain a good process of record keeping where an address for service change is received and to insist that all such notices are provided only in writing.  It also emphasises that when taking on a new development it is worth writing to all leaseholders to confirm addresses for service so as to minimise instances where the above might arise and never to fully trust information passed to you by the previous Landlord or Managing Agent as, sometimes, information passed over is wrong or missing and the effect of that can be expensive.

If you have any queries whatsoever, please get in touch with a member of the team on 01435 897297 or info@kdllaw.com.

Disclaimer

This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

If you have received this update in error or wish to unsubscribe from future updates then please email us at info@kdllaw.com.