Property ManagerFILE May 2010
Brethertons scoops 4 Awards in a Week
Law firm Brethertons was recognised this week by winning no less than four awards including:
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Best use of IT and Communications Award – Coventry Telegraph Awards
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Solicitor of the Year – News on the Block Magazine
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Young Professional of the Year – News on the Block Magazine
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Litigation Team of the Year - Credit Today Magazine.
Enfranchisement Solicitor Yashmin Mistry won an unprecedented two awards at the News on the Block ‘Enfranchisement & Right to Manage Awards’ including: Solicitor of the Year and the Young Professional of the Year.
The Property Management and Commercial Collections Teams received the award for Litigation Team of the Year at the Credit Today Awards, held at the Grosvenor House Hotel. This award recognised Brethertons achievements in the field of Commercial Recoveries and Property Management Litigation
The Coventry Telegraph award for ‘Best use of IT & Communications’ recognised the marketing launch of the firm’s online legal services LawSense.co.uk, a new way of providing legal services to their clients. Brethertons was also finalists for the ‘Contribution to the Community Award’ in recognition of the charity work the staff and partners undertake.
Partner Shaun Jardine explains: “These awards stand as testament to the strength, experience, expertise and enthusiasm we have at Brethertons across a variety of specialism’s. The whole firm is delighted with this news – being market leaders in industry specific areas ensures that our clients benefit from instructing lawyers who are recognised as leaders in their field. This is wonderful news for Brethertons and great news for our clients.”
Can an Estate Management Deed be a “Qualifying Long Term Agreement”?
On 20 April 2010, Lewison J handed down his decision in Paddington Basin Developments Ltd & Ors v West End Quay Estate Management Ltd & Anr [2010] EWHC 833 (Ch).
The case, which concerned the large development in Paddington Basin, is one of the very few High Court cases ever to consider the relevant statutory provisions on what constitutes a “Qualifying Long Term Agreement” for the purposes of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) Regulations 2003 and is of considerable importance for both landlord, tenants and their advisors in the context of service charge disputes and consultation requirements cases
Background: Paddington Basin, between Paddington Station and the Westway, has been under development for over twenty years. It consists of a large site containing a variety of different forms of developments. This case is concerned with part of the estate known as West End Quay which contains three blocks of residential flats called (i) Westcliffe Apartments (ii) Peninsula Apartments and (iii) Balmoral Apartments, which between them, contain approximately 460 lessees!
Under the terms of the leases, the individual residential lessees are required to pay a service charge. Part of the service charge is payable to a block management company for services provided to the individual block, whilst the remainder is payable to West End Quay Estate Management Limited (which is effectively an Estate Management Company).
Paddington Basin Estate Management Limited manages the whole of the Padding Basin estate, including West End Quay.
West End Quay Management Limited was party to an Estate Management Deed dated 5th September 2005 under which it covenanted to permit Paddington Basin Management Limited to enter the West Quay land to provide services to the whole of the Paddington Basin Estate. Under the Estate Management Deed West End Quay Management Limited were also required to pay a fair proportion of the costs incurred by Paddington Estate Basin Management Limited for providing those services.
The question therefore was: Is the Estate Management Deed a “qualifying long term agreement” for the purposes of the Landlord and Tenant Act 1985 and the Service Charge (Consultation Requirements) Regulations 2003?
The High Court held that the Estate Management Deed was in fact a Qualifying Long Term Agreement!
The Brethertons View: But how does this work in practice? In this case, the intermediate landlord would be the party required to undergo the consultation process before signing the estate management deed. However surely the intermediate landlord would have been entitled to press ahead almost regardless as after all, it does not really have much choice but to sign the agreement as it formed part of the leasehold structure of the development?
Moreover, isn’t the bigger problem for developer as follows: if the developer can only recover what the intermediate landlord can recover, how is the developer supposed to consult? And when exactly in the process does the developer consult?
It would seem Morgan J in this case therefore seems to think that making an application for dispensation to the consultation process would be the way forward. In other words, if consultation is pointless, dispensation must be the answer?
Indeed this case is notable for its discussion on the policy behind the statute and an analysis of types of agreement that will and will not fall within the definition of “Qualifying Long Term Agreement”.
The case has certain left many questions un-answered and perhaps is the first in a long long series of QLTA cases to come!
A full copy of the decision can be found at: http://www.bailii.org/ew/cases/EWHC/Ch/2010/833.html
Service Providers – New Disclosure Rules
Providers of services in the EU are reminded that the Provision of Services Regulations 2009 came into effect on 28 December 2009. These require service providers to supply specified information to customers. In this context, a service provider is any organisation which normally supplies services for a consideration.
The required information includes the following (the list is not exhaustive):
Some services, such as health care, financial services and transport services are excluded. For further details see http://www.opsi.gov.uk/si/si2009/uksi_20092999_en_1.
Further specified information must be provided on request and there are requirements to have a complaints handling procedure. Also, there must be no discrimination in the provision of the service because of the place of residence of the customer.
Use of Premises Makes Rent an Administration Expense
Insolvencies have been running at a high rate for some time now, presenting problems for landlords and tenants alike.
It should be remembered that the expenses of the administration of an insolvent company rank for payment before debts due to unsecured creditors. Therefore, if a landlord can show that rent is an administration expense, there is a better chance of it being received.
A recent High Court case provides guidance for landlords on this area.
Where the payment date for rent falls in a period during which the administrators are using the let property for the purposes of the administration, the rent due will be an administration expense. This applies even if the administrators are using only part of the property and/or do so for only part of the time for which rent is payable.
However, where the administrators believe the assets of the insolvent tenant will be insufficient to pay all of the administration expenses, they are entitled not to make the full rent payment.
This may at first sight appear to be good news for landlords, but it might well make administrators keen to vacate premises as soon as possible.
Director Fined for Neglecting Legionella Risk
The managing director of a West Midlands company has been fined after neglecting to control legionella, the bacterium which causes Legionnaires’ disease, at its business premises.
In spite of warnings from water treatment contractors, Ernest Jones of Coseley-based First Metal Finishers Ltd. Had failed to put in place measures to prevent the growth of the bacterium. Mr Jones admitted breaching the Health and Safety at Work etc. Act 1974 and was fined £2,000 and ordered to pay £1,000 towards costs.
The court heard that in September 2008, inspectors visited the company’s premises to check on the control of legionella bacteria in two cooling towers. The towers were in operation at the time of the visit, but there was no management system in place to control the risks of legionella, nor had there been for at least eight months. In addition, none of the required test checks or monitoring had been carried out.
A prohibition notice was issued immediately to stop the towers operating and an improvement notice was issued for a management control system to be put in place. The failings identified in the investigation showed neglect on the part of Mr Jones.
Health and Safety Executive inspector Sarah Palfreyman said, “The risk was foreseeable and entirely preventable. The company, and therefore the managing director, had received quotes from two water treatment companies which hadn’t been acted upon and received information from one about very high bacteria levels in the towers. This is a very well known risk and there have been a number of outbreaks in recent years, one in the Dudley area.
“Legionella can make people seriously ill and in severe cases can kill. Managing directors have a responsibility to act upon findings like this as soon as possible. They should be fully aware of their duties and not rely on delegation or assume they will not be prosecuted for their individual failings.”
Immigration – Identity Cards for Foreign Nationals – Tier 2
In November 2008, the UK Border Agency (UKBA) introduced a new system making it compulsory for migrants from outside the European Economic Area and Switzerland to obtain an identity card for foreign nationals (ICFN). Use of ICFNs is being introduced gradually by immigration application type.
From 6 January 2010, ICFNs are compulsory for all sponsored skilled workers applying to extend their stay in the UK under Tier 2 of the points-based system of immigration, and their dependants. The ICFN replaces putting a vignette in the applicant’s passport.
In order to obtain an ICFN, it is necessary to provide biometric information in the form of a digital photograph and, for those over 6 years of age, a 10-digit finger scan. This information is checked against existing records and stored on the card and on the UKBA’s computer system. If the application is successful, an ICFN will be issued.
Migrants making postal applications to extend their stay in the UK will be able to submit their biometrics in one of two ways:
1. By making an appointment to attend one of the 11 biometric enrolment centres in the UK; or
2. By attending one of the 17 Post Office biometric enrolment centres. This method will only be offered to applicants with certain postcodes.
In addition, there is a Premium One-Day Service, whereby applicants can pay a higher fee and make an appointment to submit their application in person and provide their biometrics at the same time. However, there is currently a long waiting list for appointments.
The UKBA guidance says that successful applicants should receive their ICFNs within 10 working days of receiving their decision letter. The expected time taken to process applications remains at 4 to 6 weeks.
At the end of 2010, the UKBA proposes to extend the requirement to obtain an ICFN to highly skilled and temporary workers when they apply to extend their stay under Tier 1 or Tier 5 of the points-based system.
New Penalties for Serious Data Protection Breaches
New powers, designed to prevent serious breaches of personal data security, are due to come into force on 6 April 2010. The Information Commissioner’s Office (ICO) will be able to order organisations to pay up to £500,000 as a penalty for serious breaches of one or more of the eight principles of the Data Protection Act 1998 (DPA).
When serving monetary penalties, the Information Commissioner will take into account the circumstances surrounding the failure to comply with the DPA, including:
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the seriousness of the data protection breach
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the likelihood of substantial damage and distress to individuals
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whether the breach was deliberate or negligent; and
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what reasonable steps the organisation has taken to prevent breaches.
Factors to be taken into account when determining the level of the fine will include the type of organisation, its financial resources and the size and severity of the data breach, so that undue financial hardship is not imposed on the organisation.
Statutory guidance on how the ICO will use this new power can be found at
http://www.ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/ico_guidance_monetary_penalties.pdf. Commissioner Christopher Graham said, “Getting data protection right has never been more important than it is today. As citizens, we are increasingly asked to complete transactions online, with the state, banks and other organisations using huge databases to store our personal details. When things go wrong, a security breach can cause real harm and great distress to thousands of people. These penalties are designed to act as a deterrent and to promote compliance with the DPA.”
Information
In addition to these new powers, the Ministry of Justice has carried out a consultation on exercising the power to impose custodial sentences on those found guilty of knowingly or recklessly obtaining, disclosing, selling or procuring the disclosure of personal data without the consent of the data controller. These are all offences under Section 55 of the DPA, relating to selling or offering to sell information that has been unlawfully obtained.
However, the proposals make it clear that the Government does not wish to prevent legitimate investigative journalism and there is therefore a proposal to commence, simultaneously, a new defence under section 55 relating to the purposes of journalism, art and literature.
Right to Request Training – Guidance Published
The Government has published guidance for employers on the new right of employees to request time off work for training, introduced on 6 April.
The right to request time to train was included in the Apprenticeships, Skills, Children and Learning Act, which received Royal Assent in November 2009. The introduction of the right will be phased. From April 2010, it will be made available to employees in organisations with 250 or more employees before being extended to all employees from April 2011. This will give smaller organisations and businesses more time to prepare for its introduction.
To make a request for time to train, an individual must be an employee and have worked continuously for their employer for at least 26 weeks on the date on which the request is made.
Employees’ requests can be to undertake accredited training programmes that will lead to a qualification or for unaccredited training that will assist them to develop specific skills relevant to their job, workplace or business. Whilst employee requests may involve agreeing time away from their workplace duties, the primary focus of the new right is on agreeing relevant training with your staff.
Employers are required to consider any requests and respond within a set timeframe. A request may be turned down if there is a good business reason for doing so, which includes where the employer does not believe the training will help improve business performance.
The way in which the new right will operate closely follows the model used for agreeing requests for flexible working arrangements.
Car Turning Area Creates Right Over Property
A landowner who allows another person or persons to make use of their land may lose the right to prevent the use if it persists over a long period. Where such use continues for more than 20 years, an ‘easement’ (the right of use over someone else’s property) is created.
In a recent case, a woman claimed an easement had arisen over land near her garage, because she had used the land to turn her car around so that she could reverse into the garage, thereby allowing an easier exit. The owner argued that no easement existed because, during a period of time within the 20-year period, the access to the land had been obstructed, requiring the garage owner to access the turning area by driving over land owned by a third party.
The court found that an easement did exist. It was the use of the land in question that was relevant, not the route by which the land was accessed. The fact that the woman had been obliged to cross a third party’s property when her normal access route was obstructed did not prevent a right of way from arising.
However, the court did consider that the landowner could build on the land provided that sufficient space was left for cars to be turned around: the right did not extend to the whole of the landowner’s property.
If you have land which you allow other people to use, it is important to make sure that you preserve your rights over it unless you are happy that these may be lost. We can advise you on the appropriate steps to take.
