On the 1st July, 2013 the First Tier Tribunal (FTT) Property Chamber came into effect, incorporating the tribunals which dealt with residential property and agricultural land as well as the adjudicator to HM Land Registry. This new Property Tribunal replaced, amongst other things, the Leasehold Valuation Tribunal (often referred to as the LVT).
The idea of the property tribunal is to improve the ease with which people can access and understand the system.
Worried about a Tribunal application? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone legal advice – with no strings attached.
Our specialist lawyers represent clients in FTT Property Chamber applications both locally in Wiltshire, Hampshire, Somerset, Dorset and Berkshire and throughout England and Wales.
The FTT operates in England only; Scotland and Wales have separate systems for resolving these sort of property disputes. It does not get involved in any disputes about non-residential properties.
What disputes does the First-Tier Tribunal Property Chamber handle?
These issues can relate to a wide variety of property issues – ranging from agricultural land and property management disputes and in particular the following:
- leasehold disputes in general
- block management disputes – including the appointment of a block manager
- freehold enfranchisement and leasehold extension– see below
- the level of reasonable professional costs payable to a freeholder in dealing with enfranchisement or lease extension
- if the freeholder cannot be found, the Tribunal can make a ruling on the price to be paid for the transfer of the freehold. Click here to read more about property applications with missing freeholders
- service charges disputes
- variation of leases, including amending errors in a lease
- lease forfeiture – for service charge arrears or breach of the lease
- mobile or park home disputes
- HMO (houses in multiple occupation) licence disagreements
- refusal of your right to buy your council home
- certain Land Registry disputes
- disputes between agricultural landlord and tenant disputes
- whether the landlord can modify or do without the need to consult with their leaseholders before undertaking major work and then asking leaseholders to pay for it through the service charge.
The First-Tier Tribunal – lease extensions and freehold purchase
By far the most common cause for the involvement of our specialist leasehold team with the FTT is in relation to residential lease extensions and leasehold enfranchisement – also referred to as freehold purchase
In particular, negotiating lease extensions and freehold purchase with your freeholder can sometimes be difficult and – that’s why we usually end up at the Tribunal.
The most common cause are involvement in these areas are:
- The price to pay for your lease extension
- The fair level of legal and surveyors costs which a leaseholder has to pay to the freeholder when extending a lease
- The premium payable for collective enfranchisement
- The FTT can help decide what the right level of payments should be made, and whether or not what you are being charged is deemed reasonable. Bear in mind that the figure reached by the Tribunal may not be what you expect or indeed hope for, but in many instances it can be a lesser figure than what the freeholder has requested.
It is important to remember that the Tribunal can’t order a freeholder to refund any money that has already exchanged hands; this includes legal costs. Any issues regarding existing payments will need to be taken to the small claims court.
We can’t agree terms with the freeholder on enfranchisement – when can I apply to the tribunal?
If leaseholders wish to take the matter to the First Tier Property Tribunal for a decision on the right premium to be paid to buy their freehold, they must do so no sooner than two months and no later than six months from the date on which the Counter Notice was due (not served or received).
If this four-month window is missed, they will be legally deemed to have withdrawn their Enfranchisement Notice and must wait a full calendar year to begin the process again.
Of course, at a time of rising property prices, in this time the market value of the property may have increased.
But beware – it is not unknown for some large freeholders to only become seriously engaged in negotiations once they receive notice that a FTT date has been set – at which point they know the sale of the freehold is imminent and that they are legally obliged to go through with the compulsory sale of the freehold shortly. There are a number of loopholes such as this and ways in which rogue landlords can play the system, particularly if they know you are not properly legally represented. Don’t let this happen to you – make sure your solicitor has plenty of experience of collective enfranchisement.
Is the Tribunal’s valuation on an enfranchisement premium legally binding on both parties?
Yes. The landlord must agree to sell to the leaseholders at this price – but the leaseholders aren’t legally obliged to go through with the deal and can walk away at this point if they deem the concluding valuation to be to expensive for them to afford. However, a new enfranchisement application cannot be started for one year if the leaseholders do walk away from the deal.
The First-Tier Property Tribunal – appointment of a manager
Another situation often dealt with by the FTT is where the relationship between the freeholder or management company and the tenants of a block of flats deteriorates to a huge extent.
In such circumstances you can ask the Tribunal to replace a current building manager or appoint a new one. In doing so, the freeholder does not lose the ownership of the freehold, but transfers across to a group of leaseholders the right to manage the premises.
Click to read more about court-appointed block managers
The FTT can also help deal with disputes arising out of leasehold ownership of a block of flats, including arrears of service charges and disputes over the level of ground rent payable.
Who makes the decisions at Tribunals?
When a tribunal sits to consider a dispute, there are usually two or three members, including the chairman – who is often an experienced surveyor or property lawyer – and a non-specialist layperson.
The reason for the three-man panel is that things remain independent, impartial and completely unbiased.
It takes the form of a court or Tribunal hearing but on a smaller and much less formal scale. The hearing is open to all members of the public and is not as intimidating as a regular court case would be
Arguments can be presented on both sides without solicitors needing to be present. In fact it’s not unusual for individual leaseholders to handle their own case and win – even in situations where they are taking on experienced freeholders with full legal representation. However, it is always a good idea that you seek specialist legal advice before even thinking of commencing action in the Tribunal.
The Tribunal is open to applications from freeholders and leaseholders alike. Sometimes an expert is introduced at the hearing to give evidence either by either party or by the tribunal itself.
Why a Tribunal rather than a court to settle property disputes?
Trying to resolve disputes in court can often be extremely expensive, unnecessarily formal and slow.
Importantly, the new tribunals have greater powers than the old LVT which is supposed to help to reduce some of the freeholder bias and overcome the perception that the tribunal does not have enough clout.
Whereas the old LVT could only award costs to one party up to £500 following unacceptable behaviour from the other party, the First-Tier Tribunal Property Chamber is now able to award unlimited costs. Parties can also apply to the tribunal to strike off a case if it clearly lacks merit. Perhaps most significantly, the FTT can now impose harsh sanctions, for example: the power to exclude a party from proceedings.
What is the process?
Before attending a FTT hearing you will need to gather the evidence, that the Tribunal panel will need to consider in making a decision. Also remember that both sides will have the chance to present their side of the story, which means the freeholder will present their own evidence. Freeholders will often bring their own lawyers with them.
The Tribunal will then ask questions of both parties and any expert to attend and look into both the arguments presented, with both parties being allowed to respond to any accusations and allegations.
Hearings can last as short as a few hours or as long as a few days, if it is a particularly complex matter.
You won’t get an immediate decision at the end of the case – you will normally have to wait for several weeks at least, before receiving a written tribunal decision in the post. Tribunal hearings are often oversubscribed and as a result, you may face a long waiting list.
Is it compulsory for a leaseholder to attend a Tribunal Hearing?
No – but your case is very likely to be badly damaged if you choose not to attend. At the very least, if you choose not to attend you should send someone (preferably a solicitor or barrister with plenty of experience of the FTT) to represent you in your place
Is it compulsory for a leaseholder to have legal representation at Tribunal?
Again no – but if your case comes with a multitude of issues or is complex, it may be best to do so.
Are hearings open to the public?
Yes – hearings are generally open to members of the public who can sit and observe proceedings.
How much does it cost to apply to the First-Tier Tribunal?
Application fees differ, depending on the type of application. However the majority of Tribunal applications require a fixed £100 fee.
However, whatever your type of case, you may also have to consider the costs of legal representation, the cost of any expert evidence used to present your evidence, not to mention the time taken in preparing your case and attending the tribunal – which can all add up. In some cases the Tribunal may order the freeholder to refund your application costs.
If you are receiving benefits or government welfare you may be entitled to discounted fees or possibly have your entire costs covered.
Can you appeal a Tribunal decision?
If you wish to challenge an FTT decision, you will need to make a formal appeal to the Upper Tribunal (Lands Chamber). That requires leave (i.e. permission) to appeal which must be given by the First-Tier Tribunal itself.
In general terms, appeals are normally only available on the basis that the First-Tier Tribunal acted unfairly or ignored proper hearing protocol. You can’t simply file an appeal solely on the grounds of disagreeing with the decision. However the First-Tier Tribunal also has the power to correct its own mistakes.
Can the Tribunal make a Consent Order?
Yes. If both parties involved in the proceedings agree on how the case should be settled, the FTT have power to make a consent order – which will bring the case to an end without a tribunal hearing
The First Tier Property Tribunal has increased powers
When the LVT was replaced by the FTT, it wasn’t just a simple change of name. The newly created chamber has increased powers including the following:
- To impose sanctions when the other side’s fails to comply with directions set by the tribunal. These sanctions include stopping the other side from remaining involved in application if they don’t comply
- To permit you to request the other side’s application be struck out if it is considered to be “without merit”
- To make a costs order against any party acting unreasonable either in making or defending an application, or in the actual conduct of case. There is no limit to the level of costs that can be awarded in this way – which is considerably different from the £500 maximum on costs orders made by the LVT
Need Help With Advice on an Application to the First-Tier Tribunal Property Chamber?
It can be difficult to find solicitors who genuinely specialise in lease enfranchisement and extending leases but the expert team here at at Bonallack & Bishop are dedicated experts. That places us perfectly to help you with freeholder/leaseholder disputes which need to be referred to the tribunal.
In fact we regularly represent clients in proceedings in new tribunal wherever their property is based in England and Wales . Our highly specialist five strong leasehold team is a national leader in terms of lease extension and freehold purchase.
- Call us today on FREEPHONE 0800 1404544 or locally on 01722 422300, or
- Complete the email enquiry form below to get in touch.