Justice At Last

In those days there was no Leasehold Valuation Tribunal (LVT) to go to and no legal rights to stop Mr Bebbington claiming the money from the leaseholders’ mortgage lenders. Two of the leaseholders were so worn down by years of swingeing charges for seemingly never-ending building work and massive legal bills and forfeiture notices that they abandoned their flats and left the country. Mr Bebbington got their flats for nothing. He was the subject of the Evening Standard’s Nightmare Landlords campaign, but he said our story was “not about an evil landlord preying on vulnerable lessees, but concerns a number of unemployed people who were badly advised when they bought their flats, have suffered the consequences of the fall in property values and have no resources of their own to pay towards the necessary maintenance of the property.”

Section 20 notices

Mr Bebbington added that he had not made money on the Brixton block and was out out of pocket by £200,000. The Denmark Mansions Leaseholders Association (DMLA) had their day with Mr Bebbington on 22 March earlier this year at the LVT. This time, as we shall read later in this article, they were seeking to replace him as manager of the building, with masses of evidence with which to persuade the LVT of the merits of their claims. (See Denmark Mansions v Maryland Estates Ltd and others – case no. LON/00AY/LAM/2006/0026)

At the LVT the expert testified that he could not understand why the roof was replaced at considerable cost less than 15 years after a previous complete re-roofing that should have been good for 50 years. The Tribunal agreed with the expert.

In July 1999 John Bebbington lost a crucial case in the Court of Appeal, the result of which has been of great help to flat owners ever since. The court ruled that he could not charge leaseholders the cost of additional building works he carried out without consulting them. (See Martin & Anor v Maryland Estates Ltd [1999] EWCA Civ 1259)

In November 1994, Section 20 notices were sent to three leaseholders and work begun in spite of their objections. But during the project it became clear that further work would be necessary. But no Section 20 notices were issued for the additional £8,600.

In the Court of Appeal Mr Bebbington’s QC argued that Mr Bebbington was justified in not issuing the legal notice because of the flat owners’ “negative and obstructive behaviour”, which he claimed “would have made any consultation exercise fruitless”. The Court of Appeal dismissed this argument as “not one which can be regarded as reasonable for the purposes of Section 20”.

This was also demonstrated at the LVT hearing on 22 March, when Bebbington did not attend or make any arrangements for a legal or other representative to attend. The leaseholders of Denmark Mansions were applying for the “appointment of a manager” to replace Mr Bebbington’s Ladygate Management, against which the tribunal found “myriad management failings” since 2001. Also: “Overall, the Tribunal formed the clear impression that the Respondent had no interest or had lost all interest in managing
the building.”

The “catalogue of neglect” included no service charge accounts since 2000/01, resulting in two flat sales that failed. Endless failures to respond to letters and telephone calls on issues like sewer smells and water penetration resulted in leaseholders paying for the work to be done themselves. The property also had not been insured since the end of 2002, and Mr Bebbington failed to account for a £36,000 sinking fund that various flat owners were made to pay into. Because of the shops on the lower levels, Denmark Mansions is a block that cannot enfranchise nor benefit from the right to manage. This is because more than 25% of the internal floor area of the building is used for non-residential purposes. Even the LVT’s appointed manager, Haleys Chartered Surveyors, will for the time being only be able to control the residential parts. But for the leaseholders it will be a hige relief and a lifeline.

A spokesperson for the DMLA said: “It has been a long struggle, both financially and mentally, to get the building the maintenance it requires and deserves.

FAST FACTS

The right to manage through the appointment of a manager.

Part 2 of the Landlord and Tenant Act 1987 provides that a LVT may appoint a manager to take over the and run the building. Such an order may be in response to an application by any of the leaseholders, or by the landlord. Alternatively, the LVT may simply make an order that the right ceases to be exercisable by the RTM company.

The grounds for an application under Part 2 are quite specific and are that the landlord, or the RTM company:

– is in breach of an obligation under the lease;

– has demanded, or is likely to demand, unreasonable service charges;

– has failed to comply with any relevant provision of an approved code of management practice.

Or other circumstances exist that make it just and convenient for the order to be made.

Where the right to manage is terminated, for any reason, no further application for the right to manage may be made for another four years, other than with a LVT’s consent.