What would I change about the Leasehold Reform, Housing & Urban Development Act 1993? (News on the Block Autumn edition)

Caroline Anstis - Associate  

The 1993 act had a difficult passage through Parliament and, as a result, there were a number of discrepancies. Later legislation has dealt with some of these with varying degrees of success however, as a practitioner specialising in this area, there are a few areas that have ‘holes’. When asked the question “what would I change about the 1993 Act?” I was surprised at how minor the issues seemed when described, but how much easier they would make the process, if changed.

Deemed service

Section 99(1)(a) of the 1993 Act provides that all notices must be in writing. I completely agree. Further, they may be sent by post – first class or recorded delivery. This seems pretty straight forward too but there is always the worry that first class mail gets lost, and/or the recipients of recorded delivery items refuse to sign for them. With the former, you may never discover the loss and the latter may take a month or so for the notice to be returned to you. I always serve notices by courier but wouldn’t service be considerably less stressful if there were deemed service provisions in the 1993 Act such as those contained in section 196 of the Law of Property Act 1925?

Deposit payable following service

Under section 42(8), as soon as a section 42 notice is served, and at any time while it continues in force, the landlord may demand from the tenant a deposit on account of the premium payable for the lease extension. This is either £250 or 10% of the premium proposed in the section 42 notice, whichever is the greater.the section 42 notice, whichever is the greater. In practice, this represents security for the landlord’s costs. Following receipt of the section 42 notice, the landlord will instruct his solicitor to investigate the tenant’s right to a new lease and instruct his surveyor to carry out a valuation. If the tenant defaults, these costs can be deducted from the deposit before it is returned. It has always struck me as unfair for landlords that this provision is not applicable in the case of a collective enfranchisement claim.

Voluntary extension of time limits

The 1993 Act is renowned for time limits which are often described as the ‘traps for the unwary’. Possibly the two most important time limits are the deadline for application to the Leasehold Valuation Tribunal (“LVT”), and the deadline for application to the County Court following voluntary agreement on terms, or a determination by the LVT. The Landlord and Tenant Act 1954 allows for the deadline for an application to the County Court to be voluntarily extended by the parties, in writing. Why is this not permitted under the 1993 Act? Surely if it were, it would avoid the need for “protective” applications and wasted costs. As the legislation does have some peculiarities, it really is best dealt with by an expert practitioner, even if it is one that would like to make changes!

Should you wish to discuss any of the points raised in this article, or enfranchisement in general, please email Caroline at caroline.anstis@pswlaw.co.uk