[2024] UKUT 423 (LC)

St Mary’s House, on London Road in Sheffield, is a former office block converted to residential flats by the appellant in or around 2014. Planning permission for the development required that it be used solely for student accommodation. The appellant remains the freeholder of the building, and has let the flats on long leases to investment purchasers. The leases provide that the landlord is responsible for the repair and maintenance of the building in return for a service charge in the usual way.

Initially the lettings to students were arranged by the appellant for the long leaseholders pursuant to a management agreement entered into at the time of the grant of the leases, but that agreement was brought to an end by the respondent and 63 other lessees in May 2022 and they now use Cloud Student Homes to manage their lettings.

On 23 December 2022 the respondent and those 63 other leaseholders sent to the appellant a notice under section 22 of the 1987 Act. As we have seen, the statute requires that the notice state both the grounds on which the FTT was going to be asked to make an order and the matters on which the tenant will rely in order to establish the grounds. The notice set out the grounds in its Second Schedule as follows:

“1.The applicants have no confidence in the proper management of St Mary’s House by [the appellant].

2.The Landlord and his Management Company are in breach of obligation owed to

leaseholders under their leases.

3.The Landlord and his Management Company are in breach of obligation owed to

leaseholders under the terms of the Management Agreement .

4.

The landlord has made unreasonable service charges 2021 and 2022 and provided no budget for 2022.

5.

Suspected breach of section 42 of the Landlord and Tenant Act 1985: Service Charges and Reserve Funds.

6.The Manager, Ms Jade Ata, Noble Design and Gunes Ata, Trading as Noble Design and Build, are in breach of the Code of Practice approved by the Secretary of State under section 87, the Leasehold Reform, Housing and Urban development Act 1993, the Service Charge Residential Management Code of the Royal Institute of Chartered Surveyors Code of Practice; RICS.

7.The Landlord denies the rights of St Mary’s House leaseholders in respect of Sections 21, and 22 of the Landlord and tenant Act 1985; Service Charges, accounts and supporting documents.

8.

Breach of the Environmental Protection Act 1990.

9.

Other circumstances exist which make it just and convenient to appoint a manager.”

In the Third Schedule to the notice were set out the matters on which the leaseholders proposed to rely in establishing the grounds. Under ground 1 it said:

“Leaseholders receive no responses to requests for information. The building is falling into disrepair. The Landlord and his manager are obstructive. Summaries of expenditure are not made available. The accounting system is in disarray. Leaseholders do not know how their money is held. The treatment of student tenants is poor. Cash has been taken from tenants with no apparent receipting or accounting. Violence has been threatened by the Landlord. Infestation continues without resolution. Misinformation passed to tenants by the Landlord’s manager. The situation is untenable.”

The matters relied upon under ground 2 were lengthy and need not be set out in full here but I shall come back to them.

The fourth schedule gave the appellant 14 days to do the following:

“Respond to S21 Notices

Provide summaries of expenditure and budgets for 2021 and 2022

Resolve infestation of St Mary’s House

Provide all keys outstanding.

Provide substantiation of claimed arrears.

Provide certified (by a third party) accounts and supporting documents for 2019, 2020,2021

Provide copies of all ASTs for 2021- to July 2022 for the listed properties.

Provide information in respect of Service Charge Trust accounts and Reserve Fund Trust accounts

Provide evidential confirmation that overcharges of Ground Rent have been rectified.”

The notice was served on 23 December 2022, and of course the holiday period came immediately after that date. The application to the FTT for the appointment of a manager was made by the respondent on 10 February 2023; the other tenants who had joined her in serving the notice were joined to the proceedings by the FTT as “Co-Joiners” so that they did not each have to pay an application fee.