PCC in leasehold space [court claim started against MC & PPC]

Coupon-mad

I'm not a residential lease expert at all but I'm with you. Adding onerous terms that interfere with the rights and easements already enjoyed by residents cannot pass, and must constitute a requirement that would need the consensus of leaseholders set out in s37 of the L&T Act.

h2g2

Some updates:

A few of my neighbours have pledged to support any legal action I take.

The managing agent finally did respond to me. My complaint against them is with the ombudsman, currently, although they may declare that the complaint should be levied at the freeholder and he MA are just following instructions. They also cannot actually compel the MA to do anything. It wouldn't overly surprise me, given the managing agent's conduct, if they were told that the lease is being breached and still refused to do anything. The managing director is quite a character.

Since starting all this the managing agent actually got bought out. They are now run by a man named Benjamin Mire, who has an interesting past. He used to sit on the leasehold tribunals as a chair, but resigned two days before an investigation of misconduct against him was due to publish its findings. The JCIO did release a statement saying he would have been removed from office in any case.

I was initially hopeful (before I found all that out) that a new managing agent would be helpful. They would be in a great position to say "of course this was done by our predecessors, so we will correct it" without losing any face. But instead they have fought back hard, using much the same explanations as PCM UK did.

His response to me is very strange though. He says:

I have reviewed clause 3.21 which says you must comply and observe the regulations set out in the Fourth Schedule "…and such amendments or additional regulations…as the Landlord and or the Management Company may…reasonably and properly make…in the general interest of the residents and good estate management…".  I am afraid that I cannot see any reference and requirement for any additional regulations to be consistent with the provisions of the lease to which you refer.

Which is a baffling reading of the clause:



He quotes that clause to me o

He also writes:

in no way has the provision of a parking management scheme removed your automatic right to park in your designated spaces, it just requires you to display a permit.

which seems to contradict itself.

I also mentioned that my use of the space is restricted, one reasonable use I suggested was that while I was away I might wish to permit a neighbour to use the space for a short time. He wrote:

 The Lease is clear (clause 3.24) that the parking space is for your use only and cannot be used by anyone else.  That is the meaning of “part with possession”.

This isn't what that means, and I'd expect a former member of the judiciary and former member of RICS to know that.

Meanwhile the Freeholder makes the same arguments - including omitting the same words about "consistent with the provisions of the lease" (which I don't think are necessary anyway; I doubt the right to regulate could be reasonably interpreted as a license to materially alter the lease). They also say this:

we [the freeholder] are not privy to the parking enforcement agreement between the RTM Company/managing agents and the parking contractors and nor are we required to be.

Which suggests that PCM do not have the written permission from the landowner required by their code of conduct. (One thing I'm not entirely clear on is whether my lease agreement makes me the landowner of the parking space. I tried to find out, but can't.) Of course, they tell me they have been given authority but can't show it to me because it's commercially sensitive. I don't think I can - at this point - compel it to be revealed.

One thing I am wondering is whether the whole thing amounts to fraud: https://www.legislation.gov.uk/ukpga/2006/35/body

It beggars belief that the freeholder and MA are so insistent on misinterpreting quite simple contractual clauses, but they are clearly doing so in order to allow PCM to profit from residents. The definition for fraud would require them to know they were wrong, which is probably hardt to prove in this case, and I'm not really sure how to proceed in this case anyway.

Finally, I have been talking to solicitors. Given Mire's previous history slipping out of cases I thought it best to get professional help taking him on, but it's really daunting. I've been quoted between £15k to £80k to bring the case, including one firm asking for £3000+VAT to even read the papers so far. It's a situation where I feel there should be little issue recovering my legal costs if I win, but if I go alone I feel I might be vulnerable to some chicanery.

dadsma

I asked the Leasehold Advisory Service about this general scenario.

Here is their response.

A variation would be necessary to add the new conditions the freeholder wishes to impose. This can only be done with the leaseholder’s consent or a court order.

Please see below our general guide on lease variations.

Variation of leases

(Sections 35-40, Landlord and Tenant Act 1987)

A lease is a contract between the landlord and a leaseholder. No matter how unsatisfactory the terms may seem, none of the parties to the lease may vary the terms unilaterally. The consent of every party to the lease is required to vary it. Otherwise, the terms of a lease may only be varied by order of the Tribunal.

In some cases, unsatisfactory provisions in the lease may affect all other leaseholders in a building, or the variation of one lease may have an effect on the others. In these cases it is often difficult to get every leaseholder to consent to vary the lease, so the law provides that the Tribunal can make an order to vary all the leases in the same way.

Variation of single leases (flats)

Any party to a long lease of a flat may make an application for it to be varied. The grounds for the application to the Tribunal to vary a single lease are that the terms of the lease fail to make satisfactory provision in certain areas. These are:

• for the repair and maintenance of the flat, or the building, or land or buildings let to the leaseholders or over which they have rights;
• for the insurance of the building containing the flat or the land or building;
• for the repair and maintenance of installations (whether in the building or not) which are necessary to ensure a reasonable standard of accommodation;
• for the provision or maintenance of services to ensure a reasonable standard of accommodation, for example, lighting, cleaning, caretaking, insurance;
• for the computation of the service charges in terms of the proportion of the charge payable by each flat in relation to the whole building, if the individual proportions add up to more or less than 100%;
• for the payment of interest on arrears of service charges; and
• for the recovery of expenditure from one party where it has been incurred on his behalf by another or for his benefit or the benefit of others including him.

Where an application is made by an individual leaseholder in respect of one flat, any other party to the lease may apply to the Tribunal seeking that the variation ordered should also apply to one or more other leases.

Variation of two or more leases (flats)

An application may also be made for an order to vary two or more leases in the building in the same way, in order to correct the same defect. An application can be made by the leaseholder or the landlord. Where the application concerns less than nine leases, then all (or all but one) of the parties concerned must consent to it. Where the application concerns more than eight leases, it must not be opposed by more than 10% of the parties concerned and at least 75% of them must consent to it. For these purposes the landlord shall constitute one of the parties concerned.

The ground for the variation of two or more leases is that the object sought to be achieved by the variation cannot be satisfactorily achieved unless all the leases are varied to the same effect.

The Tribunal may make an order to vary the leases according to the application or as it considers appropriate. It may also make an order instructing the parties to vary the leases in accordance with that instruction, and the Tribunal can order any party to pay compensation to anyone considered likely to be disadvantaged by the variation of the leases. However, it cannot order the variation if it would cause a disadvantage to another leaseholder which could not be remedied by payment of compensation.

Anyone seeking to make an application for a variation must serve advance notice of the application on anyone likely to be affected by the proposed variation. This will include the landlord (where he is not the applicant), the other leaseholders if the change will affect them and the mortgagee to the flat or flats. Failure to serve the notices will allow the affected parties to apply to the Tribunal for cancellation or modification of the variation or, in some cases, to bring action for damages.

If you have any questions please feel free to contact us. You can book an appointment for telephone advice using this link - https://clients.lease-advice.org/#/ 

Le_Kirk

dadsma said:

I asked the Leasehold Advisory Service about this general scenario.

Here is their response.

A variation would be necessary to add the new conditions the freeholder wishes to impose. This can only be done with the leaseholder’s consent or a court order.

Please see below our general guide on lease variations.

Variation of leases

(Sections 35-40, Landlord and Tenant Act 1987)

Yep, something that is regularly posted on here in this scenario.

h2g2

This case is with the The Property Ombudsman Service. They tell me that there's a backlog of cases and I should expect to wait four months to get any sort of response from them.

It's so frustrating that however I approach this it's going to take months. I'm not sure if it's better to go headlong into starting legal action. On the one hand, trying to resolve it through the Ombudsman is correct, on the other hand there is a need to get things resolved faster.

Coupon-mad

h2g2 said:

This case is with the The Property Ombudsman Service. They tell me that there's a backlog of cases and I should expect to wait four months to get any sort of response from them.

It's so frustrating that however I approach this it's going to take months. I'm not sure if it's better to go headlong into starting legal action. On the one hand, trying to resolve it through the Ombudsman is correct, on the other hand there is a need to get things resolved faster.

Have you seen the thread by @vaders who is also considering legal action?

h2g2

This will likely be the last update on this for a while:

The Property Ombudsman said they could only make a ruling on the fact that the managing agent took over weeks to evaluate my complaint to them, writing:

Unfortunately, TPO are unable to make legal determinations in relation to your lease, including whether there has been a breach of any of the lease covenants. The lease is between yourself and the RTM, not [the managing agent], so they are not the correct party to pursue. This Office does not have any jurisdiction over TPM’s client’s actions or the decisions that they have made. You may also wish to seek independent legal advice regarding any breach of the lease.

I have applied for a membership of the RTM, although apparently the freeholder holds 30 properties and therefore has 30 votes in any meetings - I haven't been able to substantiate that. The RTM hasn't replied for a long time now to my application for membership which is concerning.

In any case: I have instructed legal council, a Mr Jackson Yamba of Contestor Legal Services, to act on my behalf now and he is taking over the case. Those who are regulars here will recognise him by his initials (I've seen C-M suggest "JY would love this case", for example). And if not you may recognise him as the "Mr Yamba" who acted for Mr Chan in the CEL vs Chan case that is now a strong part of the template defence. He is confident of winning, including costs, and hopes the case will set a useful precedent in the future.

For my part, I've asked the question to JY as to whether it may be worth claiming fraud, under the Fraud Act 2006, has occurred. My logic is that the managing agent must be aware of the rights conferred by a leasehold / tenancy or they'd be unable to functionally do their job, and yet knowingly chose to sign away those rights in order to allow someone to unjustly profit from the leaseholders & tenants. Likewise PCM Ltd, having been shown proof of a leasehold agreement, continued to insist that they had the right to enforce charges when they must (or reasonably should) have known that those charges were not lawful. It would certainly be an interesting development if either party was found to have acted fraudulently in this case and open the door for a lot of people to get their money back.

Coupon-mad

This is getting very interesting!

Did you ever get a PCN?

Who are you suing? PCM? The RTM group?

You are the Claimant?

Please let us know the outcome and to see the court transcript when it is all over. We need a residential one properly argued.

h2g2

Did you ever get a PCN?
You are the Claimant?

I personally didn't - when I complained to PCM they opted out my space and have thus far stuck to it.

However, I am joined in this action by a few neighbours (including one subtenant who has an AST with a leaseholder - an interesting element, IMO) who have variously got PCNs and some paid them. We sadly don't have anyone who got a NTK, but I'm hoping someone will join in still who has so we can establish how those should be handled. I'm claiming that my contract has been breached and the situation causes my property to be devalued as a result, although only asking for an injunction and a small amount of compensation (plus my costs, obviously) as a remedy.

Who are you suing? PCM? The RTM group?

That is a conversation to be had with JY, I think. I've listed possible causes of action as:

• Freeholder: breach of contract and very maybe fraud (depending on their involvement)
• RTM Company: breach of contract and breach of articles of incorporation
• Managing agent: tortious interference, mishandling of data under DPA and I think probably fraud (their director has almost certainly been dishonest with me in handling the case and done so in order to allow others to profit unjustly at my expense)
• PCM Ltd: mishandling data, tortious interference, trespass, and maybe fraud as well.

The tortious interference allegations I want to make are down to the fact that all parties knew about the lease agreements (or, if they didn't, were deliberately ignorant to them) and chose to act in a way that caused the contract to be broken in order to cause damages to the leaseholders (a party to the contract). Also the way the leasehold agreement is written the managing agent and freeholder are required to be aware of any tenancy agreements underneath them, so subtenants of leaseholders could prevail based on tortious interference with their tenancy agreement.

The fraud allegations I need to talk to JY about once he's reviewed the bundle I sent him. But the point is that everyone's pretended to have authorisation that does not and cannot exist, and continued to insist that authorisation exists after being shown proof it can't. Sometimes to the point of professional property managers telling me misleading things about what "part possession" or "quiet enjoyment" means - it is inconceivable that a vaguely competent professional in property management would not know what those terms mean.

Whether we focus on one of those or try to hit everyone is TBD. My preferred targets are the managing agent and PCM Ltd. The RTM Company could conceivably be forced to wind up, and I'd rather have an RTM Company I'm a member of with some control than have to set up a new one. Realistically I'm stuck with the freeholder whatever happens, so I don't want them to end up with a grudge against me. But if it works out so that they're liable to pay out to all the residents, but that the MA and PCM were found to have misbehaved to the point where the freeholder can recover all those costs from them it would hopefully make the freeholder more careful about upholding their covenants and also make it much easier to replace the MA given that the freeholder still has a majority of votes on the RTM Company.

Coupon-mad

This is great. Popcorn time!