This is the sort of manoeuvre adopted by some of London’s most secretive and well resourced landlords, not the housing branch of a local authority.
The only serious power a recognised tenants’ association has is to send in the auditors to check the accounts.
Tower Hamlets Homes claims that it is simply more administratively efficient – although efficiency has never been an obvious priority in the London borough. Last year it had to be taken over by Department of Communities and Local Government commissioners after mayor Lutfur Rahman was found guilty of multiple corruption allegations by the high court.
Tower Hamlets Homes lost its attempt to block the leaseholders in the First Tier Tribunal, but is running up yet more costs in legal fees to appeal.
Although Tower Hamlets Homes manages the properties the freeholder remains the London Borough of Tower Hamlets.
The formation of a recognised tenants association was being sort by right-to-buy leaseholders in the Campbell Road (182-228) Leaseholder’s Association. THH initially persuaded the tribunal to refuse the RTA in a written application by the leaseholders for recognition.
The tribunal then went on to grant the leaseholders application for an oral review. Readers may particularly wish to note the judge’s comments in the latest hearing decision attached to the bottom of the article.
At para 5 and 6 the judge felt it relevant to note “these errors of fact are concerning”, a statement which seems to come close to doubting the veracity of Tower Hamlets Homes officials.
It is also disappointing this is yet another case where the landlord seeks to introduce evidence in total disregard of tribunal rules.
Karl Schooling, solicitor for THH, and Jeff Hardman, counsel from Arden Chambers, attended the hearing.
At para 4 the judge notes: “Mr Hardman sought to introduce a new bundle of documents on the morning on the tribunal.”
According to the decision ,Mr Hardman asserted that the tribunal directions had only just come to light due to problems with re-organization.
Such excuses happen time after time, and are similar to the actions of a number of solicitors in other cases where they somehow forget the rule about always sending copies of documents to all the parties.
It is to be welcomed that at least on this occasion the tribunal judge felt it relevant to reach agreement with landlord’s counsel that he would withdraw the new documents.
The leaseholders, of course, represented themselves and after listening to long legal arguments about the tribunal’s right to hear the case, the leaseholders then faced the implausible demand for legal costs from the landlord. A claim dismissed by the Judge at para 28.
It should also be noted from the decision that Tower Hamlets Homes claim that dealing with an RTA supposedly adds a further administrative burden. There seems no logic in this argument as every singe leaseholder has the right to engage with THH on their own. Under all circumstances it must be more efficient to deal with a democratic RTA.
No matter what the supposed additional burden was supposed to entail, the cost would have been minimal compared with the thousands of pounds the landlord is now having to pay its legal team – having failed to land the bill on the residents.
Leaseholder Dean Morrison commented: “The leaseholders at Campbell Road are extremely confused and disappointed as to why Tower Hamlets Homes is refusing to engage with leaseholders as an organised group despite it being their stated policy to do so.
“We are concerned that our legal rights under the various Acts are being ignored which is why we felt the need to defend these rights at the property tribunal.
“The aggressiveness that Tower Hamlets Homes has exhibited in contesting our application, which is not even a financial dispute, has deeply shocked us. While we feel intimidated at the use of expensive external barristers in this case, leaseholders are united as one and are determined to uphold our democratic rights.”
Tower Hamlets Homes was contacted for comment, and responded as follows: “This is an ongoing matter and we have no further comment at this stage.”
Inevitably, Tower Hamlets Homes has been the recipient of a number of awards. The UK Housing 2015 Awards states that THH has an “outstanding approach to empowering local communities”.
Tower Hamlets Homes is headed by chief executive Susmita Sen, recruited in 2015 following a job advertised at an annual salary of “circa £130,000”.
Rebecca Cattermole, barrister at Tanfield Chambers, sets out below a technical analysis of the case so far. Her piece was written before it was known that THH has made an application for a further appeal and spend yet more taxpayers money on external counsel.
Campbell Road (182- 228) Leaseholders’ Association v London Borough of Tower Hamlets LON/00BG/LRA/2015/0009, 14 July 2016
The granting of a certificate of recognition to a tenants’ association in Tower Hamlets highlighted the differing interests of a local authority’s secure tenants on the one hand and its long leaseholders on the other, and importantly showed that a landlord cannot defeat an application simply by suggesting recognition will be more burdensome administratively.
The Campbell Road (182- 228) Leaseholders’ Association (“CRLA”) comprise 12 long lessees of flats at 182- 228 Campbell Road (“the Building”). The Building is in a discrete wing of a larger low rise building which also includes 150- 181. The London Borough of Tower Hamlets (“LBTH”) describes the Building as being on the Lincoln Estate. Geographically, it is not an homogenous estate; it is a disparate collection of 19 blocks being the remnants of housing retained by the local authority after a large scale stock of its other housing stock to Poplar HARCA.
CRLA sought recognition from LBTH as a tenants’ association under s.29 of the Landlord and Tenant Act 1985. LBTH refused to issue a notice to that effect and CRLA applied to the First- tier Tribunal (Property Chamber) (“FTT”). It would seem that the main reason for doing so was that there was a tenants’ association already in existence, namely, the Lincoln Tenants’ Residents’ Association (“LTRA”) which covered the whole Lincoln estate.
Section 29(1) of the 1985 Act, defines a recognised tenants’ association as:
“an association of qualifying tenants (whether with or without other tenants) which is recognised for the purposes of the provisions of the Act relating to service charges either by notice given by the landlord or by a certificate in relation to dwellings in England of the First- tier Tribunal .”
Subsection (4) defines “qualifying tenants”:
“…for the purposes of this section a number of tenants are qualifying tenants if each of them may be required under the terms of his lease to contribute to the same costs by the payment of a service charge.”
Service charge is defined in s.18 as an
“amount payable by a tenant of a dwelling as part of or in addition to the rent-
(a) which is payable, directly, or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord’s cost of management, and
(b) the whole or part of which varies or may vary according to the relevant costs.”
Subsections (5) and (6) confer power on the Secretary of State to make regulations specifying:
• the procedure which is to be followed in connection with an application for, or for the cancellation of, a certificate;
• the matters to which regard is to be had in giving or cancelling a certificate;
• the duration of such a certificate; and
• any circumstances in which a certificate is not to be given.
To date, no regulations have been made.
The FTT’s power to grant a certificate is thus triggered if:
• the applicant is an association of tenants (whether with or without other tenants); and
• each of those tenants are required under the terms of their respective leases to contribute to the same costs by the payment of a service charge.
Section 29 does not impose any other limitation.
The DCLG refer to “current guidelines” having been in place since October 1980 (see text of guidance purported to be issued by Housing Division 5, Department of the Environment Housing (Policy) Division 4, Welsh Office. There have been successive “guidance documents” issued since, including the DCLG document “Residential Long Leaseholders: A guide to your rights and responsibilities” and the Ministry of Justice “Guidance on Recognition of Tenants’ Association General Information about the process” known as T545 in July 2014 and revised in January 2015.
The FTT determined the application on the papers following written submissions by the parties. It refused to grant the certificate for five reasons:
(1) The TLRA has sufficient leasehold representation based on LBTH’s assertions that half of the officers elected were leaseholders who were already in discussions with LBTH about major works and service charges.
(2) The recognition of another tenants’ association would place an additional burden on LBTH.
(3) The leaseholders already had the opportunity to be involved with LTRA (by election or approaching the organization with their service charge concerns).
(4) It would be cumbersome to have an RTA relating to only part of the block (182- 228) where service charges were levied in respect of 150- 228.
(5) Any additional rights conferred by s.29 should not be confined to only part of the block.
CRLA sought to set aside the decision (not least because the factual assertions made by LBTH were wrong). The FTT, treating CRLA’s request as an application for permission to appeal, agreed to review its decision at an oral hearing before a differently constituted FTT and invited further representations from the parties. At that hearing, CRLA was represented by its treasurer, LBTH instructed junior counsel.
Errors of fact
Although the FTT declined to find that there had been any procedural irregularity, it was satisfied- and indeed found it “concerning” that LBTH’s factual assertions -which the original FTT had relied upon and were pertinent to its determination refusing to grant a certificate- were plainly wrong. Thus, whereas in its written submissions LBTH had said that half of leaseholders were officers of LTRA, LBTH were unable to contradict CRLA’s case that this was wrong. It was also factually incorrect that LTRA were in active discussions with LBTH regarding major works and service charges. And finally, LTRA excluded non- resident leaseholders and had passed resolutions precluding discussion of leaseholders’ service charge concerns. The existence of the LTRA which had weighed heavily in the original’s FTT’s determination in fact was not the association which could speak on the leaseholders’ behalf.
Review or re- hearing?
LBTH argued that the FTT could only review and set aside its decision on review if there had been an error of law. Although the FTT did not make any decision on that point it considered in any event that there had been an error of law, namely, that the original FTT has refused to grant the certificate on the basis that the recognition of the CRLA would be cumbersome and pose an additional burden for LBTH without any evidence of such presented by LBTH. The burden point had weighed heavily in the exercise of the original FTT’s discretion and thus in the present FTT’s view the original decision was likely to be overturned if it went on appeal. Accordingly, the original FTT’s decision was set aside.
It would appear that at the oral hearing LBTH’s main objection to the granting of the certificate was that as the block was defined as 150- 282 by LBTH for service charge purposes, any tenants’ association should also extend that far. LBTH submitted that when regulations under s.29 come into force it is likely that an association will need to invite participation from all qualifying tenants by analogy with the right to manage and enfranchisement provisions. This was rejected: right to manage and enfranchisement have a direct effect on non- participating tenants to a degree which requires their involvement. The FTT went on: “…a [tenants’] association is a group of people who want their voices to be heard together. There is nothing intrinsically wrong with that group consisting of only some of the potential participants- there is certainly nothing in section 29 to suggest that such a situation would be wrong in any way.”
Although there is no presumption in favour of recognising a tenant’s association (see Rosslyn Mansions Tenants’ Association v Winstonworth Ltd  UKUT 11 (LC) equally, there is no presumption against recognition, There was nothing preventing the leaseholders organizing themselves in the way they had regardless of how LBTH had organized the blocks. It would have been different if CRLA had excluded membership by the other leaseholders but in this case 5 of the leaseholders at 150- 180 had been contacted but did not express any interest in being involved. In addition, save for one lease, the block was in fact defined as 182- 228 and the guidance suggesting that an association should represent 60% of the flats in the block in respect of which a variable service is payable, would have been reached even if 150- 180 was included.
Importantly, the FTT held that the statutory policy behind s.29 regards tenants’ associations and recognition as “meritorious”. Once the association has set out and established, with evidence, a positive case for recognition, that recognition should only be denied if the landlord provides a counter- argument of at least equal weight. It is not enough for a landlord to say that the association could potentially organize themselves in a different way which might be more efficient or less onerous on them.
In the present case, the FTT had already decided that LBTH had not provided evidence either to substantiate its original factual assertions or as to the crucial issue that the recognition of CRLA would be cumbersome or burdensome for LBTH. Yet, LBTH who had been invited to make representations as to whether the FTT should adjourn the proceedings, agreed the hearing should continue (without an adjournment). They did not avail themselves of the opportunity to gather its evidence together.
The existence of LTRA was less relevant given the factual errors and earlier findings by the FTT. LTRA was largely irrelevant because even on LBTH’s own case, CRLA’s members could not exercise their rights through LTRA: first, it had not been recognized by LBTH under s.29 (and indeed it would not be able to claim as such being comprised of secure tenants); secondly, LTRA excluded non- resident leaseholders. LTRA could not be the residents’ mouthpiece.
In short, the FTT was satisfied that CRLA complied with the criteria in, and the policy of, s.29. CRLA members had disputes, actual and potential, with LBTH which appeared to be genuine and substantial. In the absence of any good reason why they should not be permitted to act collectively, the certificate should be granted. The certificate was not was not limited in time this not being stipulated in s.29.
Although this is only an FTT decision, it demonstrates the wide discretion in granting the certificate as well as highlighting that it is not only leaseholders who need to carefully present their evidence; if the granted is opposed the landlord’s evidence needs to be just as good.
It is not known at present whether LBTH will seek permission to appeal the decision.
A copy of the decision can be read HERE