The recent case of Beitov Properties Ltd -v- Elliston Bentley Martin has caused a little concern amongst landlords and managing agents alike. Why? Because landlords can no longer keep their address ‘private’ and hide behind the managing agent as the only point of contact for a leaseholder (or tenant).
The legal case arose following a claim by the landlord for payment of arrears of service charge. At the hearing with the Leasehold Valuation Tribunal [LVT], it was found that the monies demanded were ‘reasonable’ and consequently should be payable. However, the LVT pointed out – even though the leaseholder did not raise the issue – that the address given for the landlord in the Demand was that of the managing agent, not the landlord. The LVT consequently concluded that the sums were not legally due.
The landlord did not agree and consequently appealed to the Upper Tribunal (Lands Chamber). After consideration, the Upper Tribunal dismissed the appeal and stated that the LVT had been correct in its interpretation of the law. The landlord argued that the relevant section of the Landlord & Tenant Act 1987 did not ‘prescribe’ or limit the address to be given and therefore it was entitled to provide any address with sufficient connection. It was also argued that the address of the managing agent was entirely adequate for the purposes of Section 47 of the 1987 Act.
The Upper Tribunal considered the landlord’s argument but concluded there was a distinction between Section 47 (for the address of the landlord to be provided in the Demand) and the requirements of Section 48 (for an address for the service of notices). Section 47 in the Upper Tribunal’s view would provide the leaseholder with sufficient information to identify the landlord – and if the landlord had more than one address, the landlord could choose which address to give. However, the managing agent’s address did not constitute the landlord’s address – despite the managing agent carrying out the landlord’s management duties from that address.
Section 47(1) of the 1987 Act sets out the requirements quite clearly:
“Where any written demand is given to a tenant of premises … the demand must contain the following information, namely (a) the name and address of the landlord, and (b) if that address is not in England or Wales an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.”
Section 47(4) goes on to state that in this section “demand” means a demand for rent or other sums payable to the Landlord under the terms of the tenancy – including, therefore, a service charge.
Section 47(2) clarifies the position on playability – stating that if a tenant is sent a demand which does not contain this information the sum will not become due until the information is provided.
So what do I conclude from this noteworthy case? Well, it is another reminder that landlords and their managing agents must remain ever conscious of their obligations and the precise meaning of the rules governing service charges for residential and mixed-use properties. Even those who work hard at meeting ‘best practice’ need to hurriedly review their systems to ensure they comply with requirements following this interesting case – particularly those landlords who do not manage their property directly and employ the services of managing agents.
And what do you do if you think an invalid demand has been served? Well, it may be possible to reserve the notice. Alternatively, a separate notice could be sent to the leaseholder, or tenant, providing him/her with the addresses i) for the landlord, and ii) for the service of notices.
However, under Section 20B of the Landlord and Tenant Act 1985, leaseholders and tenants are not liable to pay the charge if they receive the demand more than 18 months after the costs were incurred – unless there is notification within the 18 months that costs have been incurred for which the leaseholder will be liable to contribute.