In our Legal Update sent back in April 2018 (see here), we covered the requirements of Sections 47 and 48 of the  Tenant Act 1987 (“LTA 1987”).

Since then, and as recent as 11 July 2019, what is required has been further debated and clarity provided by the Upper Tribunal (Lands Chamber) in the case of Westlake Estates Ltd v Yinusa [2019] UKUT 225 (LC). This Legal Update provides a summary of the facts of this case and how the decision is relevant, to Leaseholders, managing agents and Landlords alike.

Section 47 LTA 1987 - What does this section say?

Section 47 requires that a Tenant must be provided with the name and address of the Landlord on any demand for rent or other sums due under the terms of the tenancy or long lease. If, however, the Landlord’s address is not in England and Wales, an address in England or Wales at which notices (including notices in proceedings) may be served on the Landlord must be given.

Failure to provide such information in the demand will prevent the Landlord from enforcing the amount demanded, whether rent or service charges, as that sum shall be treated as not due until a demand containing a compliant notice has been served.

Westlake Estates Ltd v Yinusa [2019] - The First-tier Tribunal (FTT) Decision

Westlake Estates Ltd was the Landlord of Snowshill Place, a purpose-built block of 17 flats. Mr Yinusa was the Leaseholder of flat 6 under a 125 year lease who, throughout 2012 to 2017, had not paid service charges or ground rents demanded. Westlake therefore applied to the First-Tier Tribunal (“FTT”) for a determination that the service charges were payable.

At the first hearing, the FTT found that although the service charge demands were properly served, they neither complied with Section 47 of LTA 1987 nor did they contain the information prescribed by section 21B of the Landlord and Tenant Act 1985 (“LTA 1985”) (summary of rights and obligations). This was despite Mr Yinusa not raising those issues himself; his case before the FTT in fact being that he had not received the demands at all, and not that there was anything wrong with those demands.

As a result, the FTT found that the service charges were not payable. In addition, the FTT ordered Westlake to pay penalty costs to Mr Yinusa under Rule 13 of the Tribunal Procedure Rules (for unreasonable costs) on the basis that it should have been aware of the “fundamental flaws” in its procedures, and also applied Section 20C of the LTA 1985 such that Westlake’s costs could not be applied as service charge funds.

Westlake appealed the decision. Only the points arising from the Section 47 appeal are relevant and covered by this Legal Update.

The Upper Tribunal (“UT”) Decision

The UT found that Westlake had complied with its obligations under Section 47 of LTA 1987.

Both the service charge demands and the covering letters sent to Mr Yinusa were on headed paper of “Westlake Estates Ltd”, which stated both Westlake’s name and address (albeit in the footer of the page). Mr Yinusa argued that this was not sufficient to comply with Section 47 of LTA 1987, and in each case an indication must be given that the name and address specified in the demand was the name and address of the Landlord.

The UT did not agree. It held that where only one name and address is given to a Tenant, a statement that that is the name and address of the Landlord is not required.

However, where more than one name and address is given on that demand (such as the Landlord’s and any management company’s), an indication of which party is the Landlord would be needed to avoid confusion. In this case, there was no other name on the demands which Mr Yinusa could become confused by.

In allowing the appeal, the UT overturned the penalty costs order against Westlake and the Section 20C order imposed by the FTT.

Conclusion

It is reassuring to see the UT taking a practical and commercial approach when applying what is often seen as complex and contentious points of law. The decision is also in keeping with earlier authorities in relation to notices under Section 48 of LTA 1987 (Landlord’s name and address for service to be given to Tenants), which have decided that it is not necessary for the notice to expressly say it is the address for service or even refer to Section 48.

The main lesson to be learned from the decision is to ensure that a Leaseholder cannot become confused as to who their Landlord is and what the Landlord’s address is. Where service charges are collected by a third party such as a management company or right to manage company, care should be taken to ensure that that company is clearly identified as a third party and not the Landlord.

Although not strictly required, we always recommend any demands include a statement along the lines set out below, to avoid this argument becoming an issue at any stage:

“For the purposes of Sections 47 and 48 of the Landlord and Tenant Act 1987, the Landlord’s name and address at which notices (including notices in proceedings) can be served is…..”

Should you have any questions relating to this update please contact us on info@kdllaw.com or 01435 897 297.

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