Leasehold Reform, Housing and Urban Development Act 1993

Grant of new lease where interest of landlord or tenant is subject to a mortgage

58

• (1) Subject to subsection (2), a qualifying tenant shall be entitled to be granted a new lease under section 56 despite the fact that the grant of the existing lease was subsequent to the creation of a mortgage on the landlord’s interest and not authorised as against the persons interested in the mortgage; and a lease granted under that section—

• (a) shall be deemed to be authorised as against the persons interested in any mortgage on the landlord’s interest (however created or arising), and

• (b) shall be binding on those persons.

• (2) A lease granted under section 56 shall not, by virtue of subsection (1) above, be binding on the persons interested in any such mortgage if the existing lease—

• (a) is granted after the commencement of this Chapter, and

• (b) being granted subsequent to the creation of the mortgage, would not, apart from that subsection, be binding on the persons interested in the mortgage.

• (3) Where—

• (a) a lease is granted under section 56, and

• (b) any person having a mortgage on the landlord’s interest is thereby entitled to possession of the documents of title relating to that interest,

the landlord shall, within one month of the execution of the lease, deliver to that person a counterpart of it duly executed by the tenant.

• (4) Where the existing lease is, immediately before its surrender on the grant of a lease under section 56, subject to any mortgage, the new lease shall take effect subject to the mortgage in substitution for the existing lease; and the terms of the mortgage, as set out in the instrument creating or evidencing it, shall accordingly apply in relation to the new lease in like manner as they applied in relation to the existing lease.

• (5) Where—

• (a) a lease granted under section 56 takes effect subject to any such subsisting mortgage on the existing lease, and

• (b) at the time of execution of the new lease the person having the mortgage is thereby entitled to possession of the documents of title relating to the existing lease,

he shall be similarly entitled to possession of the documents of title relating to the new lease; and the tenant shall deliver the new lease to him within one month of the date on which the lease is received from Her Majesty’s Land Registry following its registration.

• (6) Where—

• (a) the landlord fails to deliver a counterpart of the new lease in accordance with subsection (3), or

• (b) the tenant fails to deliver the new lease in accordance with subsection (5),

the instrument creating or evidencing the mortgage in question shall apply as if the obligation to deliver a counterpart or (as the case may be) deliver the lease were included in the terms of the mortgage as set out in that instrument.

• (7) A landlord granting a lease under section 56 shall be bound to take such steps as may be necessary to secure that the lease is not liable in accordance with subsection (2) to be defeated by persons interested in a mortgage on his interest; but a landlord is not obliged, in order to grant a lease for the purposes of that section, to acquire a better title than he has or could require to be vested in him.

Further renewal, but no security of tenure, after grant of new lease

59

• (1) The right to acquire a new lease under this Chapter may be exercised in relation to a lease of a flat despite the fact that the lease is itself a lease granted under section 56; and the provisions of this Chapter shall, with any necessary modifications, apply for the purposes of or in connection with any claim to exercise that right in relation to a lease so granted as they apply for the purposes of or in connection with any claim to exercise that right in relation to a lease which has not been so granted.

• (2) Where a lease has been granted under section 56—

• (a) none of the statutory provisions relating to security of tenure for tenants shall apply to the lease;

• (b) after the term date of the lease none of the following provisions, namely—

• (i) section 1 of the Landlord and Tenant Act 1954 or Schedule 10 to the Local Government and Housing Act 1989 (which make provision for security of tenure on the ending of long residential tenancies), or

• (ii) Part II of that Act of 1954 (business tenancies),

shall apply to any sub-lease directly or indirectly derived out of the lease; and

• (c) after that date no person shall be entitled by virtue of any such sub-lease to retain possession under—

• (i) Part VII of the Rent Act 1977 (security of tenure for protected tenancies etc.) or any enactment applying or extending that Part of that Act,

• (ii) the Rent (Agriculture) Act 1976, or

• (iii) Part I of the Housing Act 1988 (assured tenancies etc.).

• (3) Where a lease has been granted under section 56, no long lease created immediately or derivatively by way of sub-demise under the lease shall confer on the sub-tenant, as against the tenant’s landlord, any right under this Chapter to acquire a new lease (and for this purpose “long lease” shall be construed in accordance with section 7).

• (4) Any person who—

• (a) grants a sub-lease to which subsection (2)(b) and (c) will apply, or

• (b) negotiates with a view to the grant of such a sub-lease by him or by a person for whom he is acting as agent,

shall inform the other party that the sub-lease is to be derived out of a lease granted under section 56, unless either he knows that the other party is aware of it or he himself is unaware of it.

• (5) Where any lease contains a statement to the effect that it is a lease granted under section 56, the statement shall be conclusive for the purposes of subsections (2) to (4) in favour of any person who is not a party to the lease, unless the statement appears from the lease to be untrue.

Costs incurred in connection with new lease

Costs incurred in connection with new lease to be paid by tenant

60

• (1) Where a notice is given under section 42, then (subject to the provisions of this section) the tenant by whom it is given shall be liable, to the extent that they have been incurred by any relevant person in pursuance of the notice, for the reasonable costs of and incidental to any of the following matters, namely—

• (a) any investigation reasonably undertaken of the tenant’s right to a new lease;

• (b) any valuation of the tenant’s flat obtained for the purpose of fixing the premium or any other amount payable by virtue of Schedule 13 in connection with the grant of a new lease under section 56;

• (c) the grant of a new lease under that section;

but this subsection shall not apply to any costs if on a sale made voluntarily a stipulation that they were to be borne by the purchaser would be void.

• (2) For the purposes of subsection (1) any costs incurred by a relevant person in respect of professional services rendered by any person shall only be regarded as reasonable if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs.

• (3) Where by virtue of any provision of this Chapter the tenant’s notice ceases to have effect, or is deemed to have been withdrawn, at any time, then (subject to subsection (4)) the tenant’s liability under this section for costs incurred by any person shall be a liability for costs incurred by him down to that time.

• (4) A tenant shall not be liable for any costs under this section if the tenant’s notice ceases to have effect by virtue of section 47(1) or 55(2).

• (5) A tenant shall not be liable under this section for any costs which a party to any proceedings under this Chapter before the appropriate tribunal incurs in connection with the proceedings.

• (6) In this section “relevant person”, in relation to a claim by a tenant under this Chapter, means the landlord for the purposes of this Chapter, any other landlord (as defined by section 40(4)) or any third party to the tenant’s lease.

Landlord’s right to terminate new lease

Landlord’s right to terminate new lease on grounds of redevelopment

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• (1) Where a lease of a flat (“the new lease”) has been granted under section 56 but the court is satisfied, on an application made by the landlord—

• (a) that for the purposes of redevelopment the landlord intends—

• (i) to demolish or reconstruct, or

• (ii) to carry out substantial works of construction on,

the whole or a substantial part of any premises in which the flat is contained, and

• (b) that he could not reasonably do so without obtaining possession of the flat,

the court shall by order declare that the landlord is entitled as against the tenant to obtain possession of the flat and the tenant is entitled to be paid compensation by the landlord for the loss of the flat.

• (2) An application for an order under this section may be made—

• (a) at any time during the period of 12 months ending with the term date of the lease in relation to which the right to acquire a new lease was exercised; and

• (b) at any time during the period of five years ending with the term date of the new lease.

• (3) Where the new lease is not the first lease to be granted under section 56 in respect of a flat, subsection (2) shall apply as if paragraph (b) included a reference to the term date of any previous lease granted under that section in respect of the flat, but paragraph (a) shall be taken to be referring to the term date of the lease in relation to which the right to acquire a new lease was first exercised.

• (4) Where an order is made under this section, the new lease shall determine, and compensation shall become payable, in accordance with Schedule 14 to this Act; and the provisions of that Schedule shall have effect as regards the measure of compensation payable by virtue of any such order and the effects of any such order where there are sub-leases, and as regards other matters relating to orders and applications under this section.

• (5) Except in subsection (1)(a) or (b), any reference in this section to the flat held by the tenant under the new lease includes any premises let with the flat under that lease.

Supplemental

Interpretation of Chapter II

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• (1) In this Chapter—

• “appropriate tribunal” means—in relation to premises in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; andin relation to premises in Wales, a leasehold valuation tribunal.

• “the existing lease”, in relation to a claim by a tenant under this Chapter, means the lease in relation to which the claim is made;

• “the landlord”, in relation to such a claim, has the meaning given by section 40(1);

• “mortgage” includes a charge or lien;

• “qualifying tenant” shall be construed in accordance with section 39(3);

• “the relevant date” (unless the context otherwise requires) has the meaning given by section 39(8);

• “the tenant’s notice” means the notice given under section 42;

• “the terms of acquisition” shall be construed in accordance with section 48(7);

• “third party”, in relation to a lease, means any person who is a party to the lease apart from the tenant under the lease and his immediate landlord.

• (2) Subject to subsection (3), references in this Chapter to a flat, in relation to a claim by a tenant under this Chapter, include any garage, outhouse, garden, yard and appurtenances belonging to, or usually enjoyed with, the flat and let to the tenant with the flat on the relevant date (or, in a case where an application is made under section 50(1), on the date of the making of the application).

• (3) Subsection (2) does not apply—

• (a) to any reference to a flat in section 47 or 55(1); or

• (b) to any reference to a flat (not falling within paragraph (a) above) which occurs in the context of a reference to any premises containing the flat.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III — ENFRANCHISEMENT UNDER LEASEHOLD REFORM ACT 1967

Extension of right to enfranchise

Extension of right to enfranchise to houses whose value or rent exceeds applicable limit

63

After section 1 of the Leasehold Reform Act 1967 there shall be inserted—

(1A) (1) Where subsection (1) of section 1 above would apply in the case of the tenant of a house but for the fact that the applicable financial limit specified in subsection (1)(a)(i) or (ii) or (as the case may be) subsection (5) or (6) of that section is exceeded, this Part of this Act shall have effect to confer on the tenant the same right to acquire the freehold of the house and premises as would be conferred by subsection (1) of that section if that limit were not exceeded. (2) Where a tenancy of any property is not a tenancy at a low rent in accordance with section 4(1) below but is a tenancy falling within section 4A(1) below, the tenancy shall nevertheless be treated as a tenancy at a low rent for the purposes of this Part of this Act so far as it has effect for conferring on any person a right to acquire the freehold of a house and premises.

Tenancies terminable after death or marriage

64

• (1) The following section shall be inserted in the Leasehold Reform Act 1967 after the section 1A inserted by section 63 above—

(1B) Where a tenancy granted so as to become terminable by notice after a death or marriage— (a) is (apart from this section) a long tenancy in accordance with section 3(1) below, but (b) was granted before 18th April 1980 or in pursuance of a contract entered into before that date, then (notwithstanding section 3(1)) the tenancy shall be a long tenancy for the purposes of this Part of this Act only so far as this Part has effect for conferring on any person a right to acquire the freehold of a house and premises.

• (2) In section 3(1) of that Act (meaning of “long tenancy”)—

• (a) after “and includes” there shall be inserted “ both a tenancy taking effect under section 149(6) of the Law of Property Act 1925 (leases terminable after a death or marriage) and ”; and

• (b) in the proviso (which prevents certain categories of tenancies terminable after death or marriage being long tenancies), for the words from “if either” onwards there shall be substituted

if— (a) the notice is capable of being given at any time after the death or marriage of the tenant; (b) the length of the notice is not more than three months; and (c) the terms of the tenancy preclude both— (i) its assignment otherwise than by virtue of section 92 of the Housing Act 1985 (assignments by way of exchange), and (ii) the sub-letting of the whole of the premises comprised in it.

Additional “low rent” test

65

After section 4 of the Leasehold Reform Act 1967 there shall be inserted—

(4A) (1) For the purposes of section 1A(2) above a tenancy of any property falls within this subsection if either no rent was payable under it in respect of the property during the initial year or the aggregate amount of rent so payable during that year did not exceed the following amount, namely— (a) where the tenancy was entered into before 1st April 1963, two-thirds of the letting value of the property (on the same terms) on the date of the commencement of the tenancy; (b) where— (i) the tenancy was entered into either on or after 1st April 1963 but before 1st April 1990, or on or after 1st April 1990 in pursuance of a contract made before that date, and (ii) the property had a rateable value at the date of the commencement of the tenancy or else at any time before 1st April 1990, two-thirds of the rateable value of the property on the relevant date; or (c) in any other case, £1,000 if the property is in Greater London or £250 if elsewhere. (2) For the purposes of subsection (1) above— (a) “the initial year”, in relation to any tenancy, means the period of one year beginning with the date of the commencement of the tenancy; (b) “the relevant date” means the date of the commencement of the tenancy or, if the property did not have a rateable value on that date, the date on which it first had a rateable value; and (c) paragraphs (b) and (c) of section 4(1) above shall apply as they apply for the purposes of section 4(1); and it is hereby declared that in subsection (1) above the reference to the letting value of any property is to be construed in like manner as the reference in similar terms which appears in the proviso to section 4(1) above. (3) Section 1(7) above applies to any amount referred to in subsection (1)(c) above as it applies to the amount referred to in subsection (1)(a)(ii) of that section.

Price payable by tenant on enfranchisement by virtue of section 63 or 64

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• (1) In section 9 of the Leasehold Reform Act 1967 (purchase price and costs of enfranchisement, etc.), after subsection (1B) there shall be inserted—

(1C) Notwithstanding subsection (1) above, the price payable for a house and premises where the right to acquire the freehold arises by virtue of any one or more of the provisions of sections 1A and 1B above shall be determined in accordance with subsection (1A) above; but in any such case— (a) if in determining the price so payable there falls to be taken into account any marriage value arising by virtue of the coalescence of the freehold and leasehold interests, the share of the marriage value to which the tenant is to be regarded as being entitled shall not exceed one-half of it; and (b) section 9A below has effect for determining whether any additional amount is payable by way of compensation under that section; and in a case where the provision (or one of the provisions) by virtue of which the right to acquire the freehold arises is section 1A(1) above, subsection (1A) above shall apply with the omission of the assumption set out in paragraph (b) of that subsection.

• (2) Section 9 of that Act, as amended by this section and with the omission of repealed provisions, is set out in Schedule 15 to this Act.

• (3) After section 9 of that Act there shall be inserted—

(9A) (1) If, in a case where the right to acquire the freehold of a house and premises arises by virtue of any one or more of the provisions of sections 1A and 1B above, the landlord will suffer any loss or damage to which this section applies, there shall be payable to him such amount as is reasonable to compensate him for that loss or damage. (2) This section applies to— (a) any diminution in value of any interest of the landlord in other property resulting from the acquisition of his interest in the house and premises; and (b) any other loss or damage which results therefrom to the extent that it is referable to his ownership of any interest in other property. (3) Without prejudice to the generality of paragraph (b) of subsection (2) above, the kinds of loss falling within that paragraph include loss of development value in relation to the house and premises to the extent that it is referable as mentioned in that paragraph. (4) In subsection (3) above “development value”, in relation to the house and premises, means any increase in the value of the landlord’s interest in the house and premises which is attributable to the possibility of demolishing, reconstructing, or carrying out substantial works of construction on, the whole or a substantial part of the house and premises. (5) In relation to any case falling within subsection (1) above— (a) any reference (however expressed)— (i) in section 8 or 9(3) or (5) above, or (ii) in any of the following provisions of this Act, to the price payable under section 9 above shall be construed as including a reference to any amount payable to the landlord under this section; and (b) for the purpose of determining any such separate price as is mentioned in paragraph 7(1)(b) of Schedule 1 to this Act, this section shall accordingly apply (with any necessary modifications) to each of the superior interests in question.

Exceptions to right to enfranchise

Exclusion of right to enfranchise in case of houses let by charitable housing trusts

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• (1) Section 1 of the Leasehold Reform Act 1967 (tenants entitled to enfranchisement or extension) shall be amended as follows.

• (2) In subsection (3) (excepted cases) there shall be added at the end— “ or, in the case of any right to which subsection (3A) below applies, at any time when the tenant’s immediate landlord is a charitable housing trust and the house forms part of the housing accommodation provided by the trust in the pursuit of its charitable purposes. ”

• (3) After subsection (3) there shall be inserted—

(3A) For the purposes of subsection (3) above this subsection applies as follows— (a) where the tenancy was created after the commencement of Chapter III of Part I of the Leasehold Reform, Housing and Urban Development Act 1993, this subsection applies to any right to acquire the freehold of the house and premises; but (b) where the tenancy was created before that commencement, this subsection applies only to any such right exercisable by virtue of any one or more of the provisions of sections 1A and 1B below; and in that subsection “charitable housing trust” means a housing trust within the meaning of the Housing Act 1985 which is a charity within the meaning of the Charities Act 1993.

Exclusion of right in case of property transferred for public benefit etc

68

After section 32 of the Leasehold Reform Act 1967 there shall be inserted—

(32A) (1) A notice of a person’s desire to have the freehold of a house and premises under this Part shall be of no effect if at the relevant time the whole or any part of the house and premises is qualifying property and either— (a) the tenancy was created after the commencement of Chapter III of Part I of the Leasehold Reform, Housing and Urban Development Act 1993; or (b) (where the tenancy was created before that commencement) the tenant would not be entitled to have the freehold if either or both of sections 1A and 1B above were not in force. (2) For the purposes of this section the whole or any part of the house and premises is qualifying property if— (a) it has been designated under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984 (designation and undertakings relating to conditionally exempt transfers), whether with or without any other property, and no chargeable event has subsequently occurred with respect to it; or (b) an application to the Board for it to be so designated is pending; or (c) it is the property of a body not established or conducted for profit and a direction has been given in relation to it under section 26 of that Act (gifts for public benefit), whether with or without any other property; or (d) an application to the Board for a direction to be so given in relation to it is pending. (3) For the purposes of subsection (2) above an application is pending as from the time when it is made to the Board until such time as it is either granted or refused by the Board or withdrawn by the applicant; and for this purpose an application shall not be regarded as made unless and until the applicant has submitted to the Board all such information in support of the application as is required by the Board. (4) A notice of a person’s desire to have the freehold of a house and premises under this Part shall cease to have effect if— (a) before completion of the conveyance in pursuance of the tenant’s notice, the whole or any part of the house and premises becomes qualifying property; and (b) the condition set out in subsection (1)(a) or (as the case may be) subsection (1)(b) above is satisfied. (5) Where a tenant’s notice ceases to have effect by virtue of subsection (4) above— (a) section 9(4) above shall not apply to require the tenant to make any payment to the landlord in respect of costs incurred by reason of the notice; and (b) the person who applied or is applying for designation or a direction shall be liable to the tenant for all reasonable costs incurred by the tenant in connection with his claim to acquire the freehold of the house and premises. (6) Where it is claimed that subsection (1) or (4) above applies in relation to a tenant’s notice, the person making the claim shall, at the time of making it, furnish the tenant with evidence in support of it; and if he fails to do so he shall be liable for any costs which are reasonably incurred by the tenant in consequence of the failure. (7) In subsection (2) above— (a) paragraphs (a) and (b) apply to designation under section 34(1)(a), (b) or (c) of the Finance Act 1975 or section 77(1)(b), (c) or (d) of the Finance Act 1976 as they apply to designation under section 31(1)(b), (c) or (d) of the Inheritance Tax Act 1984; and (b) paragraphs (c) and (d) apply to a direction under paragraph 13 of Schedule 6 to the Finance Act 1975 as they apply to a direction under section 26 of that Act of 1984. (8) In this section— - “the Board” means the Commissioners of Inland Revenue; - “chargeable event” means— 1. any event which in accordance with any provision of Chapter II of Part II of the Inheritance Tax Act 1984 (exempt transfers) is a chargeable event, including any such provision as applied by section 78(3) of that Act (conditionally exempt occasions); or 2. any event which would have been a chargeable event in the circumstances mentioned in section 79(3) of that Act (exemption from ten-yearly charge).

Chapter IV — ESTATE MANAGEMENT SCHEMES IN CONNECTION WITH ENFRANCHISEMENT

Estate management schemes

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• (1) For the purposes of this Chapter an estate management scheme is a scheme which (subject to sections 71 and 73) is approved by the appropriate tribunal under section 70 for an area occupied directly or indirectly under leases held from one landlord (apart from property occupied by him or his licensees or for the time being unoccupied) and which is designed to secure that in the event of tenants—

• (a) acquiring the landlord’s interest in their house and premises (“the house”) under Part I of the Leasehold Reform Act 1967 by virtue of the provisions of section 1AA of that Act (as inserted by paragraph 1 of Schedule 9 to the Housing Act 1996), or

• (b) acquiring the landlord’s interest in any premises (“the premises”) in accordance with Chapter I of this Part of this Act in circumstances in which, but for section 117(1) of the Commonhold and Leasehold Reform Act 2002 and the repeal by that Act of paragraph 3 of Schedule 9 to the Housing Act 1996, they would have been entitled to acquire it by virtue of the amendments of that Chapter made by that paragraph,

the landlord will—

• (i) retain powers of management in respect of the house or premises, and

• (ii) have rights against the house or premises in respect of the benefits arising from the exercise elsewhere of his powers of management.

• (2) An estate management scheme may make different provision for different parts of the area of the scheme, and shall include provision for terminating or varying all or any of the provisions of the scheme, or excluding part of the area, if a change of circumstances makes it appropriate, or for enabling it to be done by or with the approval of the appropriate tribunal.

• (3) Without prejudice to any other provision of this section, an estate management scheme may provide for all or any of the following matters—

• (a) for regulating the redevelopment, use or appearance of property in which tenants have acquired the landlord’s interest as mentioned in subsection (1)(a) or (b);

• (b) for empowering the landlord for the time being to carry out works of maintenance, repair, renewal or replacement in relation to any such property or carry out work to remedy a failure in respect of any such property to comply with the scheme, or for making the operation of any provisions of the scheme conditional on his doing so or on the provision or maintenance by him of services, facilities or amenities of any description;

• (c) for imposing on persons from time to time occupying or interested in any such property obligations in respect of the carrying out of works of maintenance, repair, renewal or replacement in relation to the property or property used or enjoyed by them in common with others, or in respect of costs incurred by the landlord for the time being on any matter referred to in this paragraph or in paragraph (b) above provided that where obligations are imposed in relation to an occupation contract they are not incompatible with a fundamental provision of the Renting Homes (Wales) Act 2016 (anaw 1);

• (d) for the inspection from time to time of any such property on behalf of the landlord for the time being, and for the recovery by him of sums due to him under the scheme in respect of any such property by means of a charge on the property;

and the landlord for the time being shall have, for the enforcement of any charge imposed under the scheme, the same powers and remedies under the Law of Property Act 1925 and otherwise as if he were a mortgagee by deed having powers of sale and leasing and of appointing a receiver.

• (3A) In this section, the following terms have the same meaning as in the Renting Homes (Wales) Act 2016 (anaw 1)—

• (a) “fundamental provision” (see section 18 (see also section 19) of that Act);

• (b) “occupation contract” (see section 7 of that Act).

• (4) Except as provided by the scheme, the operation of an estate management scheme shall not be affected by any disposition or devolution of the landlord’s interest in the property within the area of the scheme or in parts of that property; but the scheme—

• (a) shall include provision for identifying the person who is for the purposes of the scheme to be treated as the landlord for the time being; and

• (b) shall also include provision for transferring, or allowing the landlord for the time being to transfer, all or any of the powers and rights conferred by the scheme on the landlord for the time being to a local authority or other body, including a body constituted for the purpose.

• (5) Without prejudice to the generality of paragraph (b) of subsection (4), an estate management scheme may provide for the operation of any provision for transfer included in the scheme in accordance with that paragraph to be dependent—

• (a) on a determination of the appropriate tribunal effecting or approving the transfer;

• (b) on such other circumstances as the scheme may provide.

• (6) An estate management scheme may extend to property in which the landlord’s interest is disposed of otherwise than as mentioned in subsection (1)(a) or (b) (whether residential property or not), so as to make that property, or allow it to be made, subject to any such provision as is or might be made by the scheme for property in which tenants acquire the landlord’s interest as mentioned in either of those provisions.

• (7) In this Chapter references to the landlord for the time being shall have effect, in relation to powers and rights transferred to a local authority or other body as contemplated by subsection (4)(b) above, as references to that authority or body.

• (8) For the purposes of this Chapter, “appropriate tribunal” means—

• (a) in relation to an area or areas in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; and

• (b) in relation to an area or areas in Wales, a leasehold valuation tribunal.

Approval by leasehold valuation tribunal of estate management scheme

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• (1) The appropriate tribunal may, on an application made by a landlord for the approval of a scheme submitted by him to the tribunal, approve the scheme as an estate management scheme for such area falling within section 69(1) as is specified in the scheme; but any such application must (subject to section 72) be made within the period of two years beginning with the coming into force of section 118 of the Housing Act 1996.

• (2) The appropriate tribunal shall not approve a scheme as an estate management scheme for any area unless it is satisfied that, in order to maintain adequate standards of appearance and amenity and regulate redevelopment within the area in the event of tenants acquiring the interest of the landlord in any property as mentioned in section 69(1)(a) or (b), it is in the general interest that the landlord should retain such powers of management and have such rights falling within section 69(1)(i) and (ii) as are conferred by the scheme.

• (3) In considering whether to approve a scheme as an estate management scheme for any area, the appropriate tribunal shall have regard primarily to—

• (a) the benefit likely to result from the scheme to the area as a whole (including houses or premises likely to be acquired from the landlord as mentioned in section 69(1)(a) or (b)); and

• (b) the extent to which it is reasonable to impose, for the benefit of the area, obligations on tenants so acquiring the interest of their landlord;

but the tribunal shall also have regard to the past development and present character of the area and to architectural or historical considerations, to neighbouring areas and to the circumstances generally.

• (4) The appropriate tribunal shall not consider any application for it to approve a scheme unless it is satisfied that the applicant has, by advertisement or otherwise, given adequate notice to persons interested—

• (a) informing them of the application for approval of the scheme and the provision intended to be made by the scheme, and

• (b) inviting them to make representations to the tribunal about the application within a time which appears to the tribunal to be reasonable.

• (5) In subsection (4) “persons interested” includes, in particular, in relation to any application for the approval of a scheme for any area (“the scheme area”) within a conservation area—

• (a) each local planning authority within whose area any part of the scheme area falls, and

• (b) if the whole of the scheme area is in England, the Historic Buildings and Monuments Commission for England.

• (6) Where the application is to be considered in an oral hearing, the tribunal shall afford to any person making representations under subsection (4)(b) about the application an opportunity to appear at the hearing.

• (7) Subject to the preceding provisions of this section, the appropriate tribunal shall, after considering the application, approve the scheme in question either—

• (a) as originally submitted, or

• (b) with any relevant modifications proposed or agreed to by the applicant,

if the scheme (with those modifications, if any) appears to the tribunal—

• (i) to be fair and practicable, and

• (ii) not to give the landlord a degree of control out of proportion to that previously exercised by him or to that required for the purposes of the scheme.

• (8) In subsection (7) “relevant modifications” means modifications relating to the extent of the area to which the scheme is to apply or to the provisions contained in it.

• (9) If, having regard to—

• (a) the matters mentioned in subsection (3), and

• (b) the provision which it is practicable to make by a scheme,

the tribunal thinks it proper to do so, the tribunal may declare that no scheme can be approved for the area in question in pursuance of the application.

• (10) The appropriate tribunal shall not dismiss an application for the approval of a scheme unless—

• (a) it makes such a declaration as is mentioned in subsection (9); or

• (b) in the opinion of the tribunal the applicant is unwilling to agree to a suitable scheme or is not proceeding in the matter with due despatch.

• (10A) Any person who makes representations under subsection (4)(b) about an application for the approval of a scheme may appeal from a decision of the tribunal in proceedings on the application.

• (11) A scheme approved under this section as an estate management scheme for an area shall be a local land charge, notwithstanding section 2(a) or (b) of the Local Land Charges Act 1975 (matters which are not local land charges), and for the purposes of that Act the landlord for that area shall be treated as the originating authority as respects any such charge.

• (12) Where such a scheme is registered in the ... local land charges register—

• (a) the provisions of the scheme relating to property of any description shall so far as they respectively affect the persons from time to time occupying or interested in that property be enforceable by the landlord for the time being against them, as if each of them had covenanted with the landlord for the time being to be bound by the scheme; and

• (b) in relation to any acquisition such as is mentioned in section 69(1)(a) above, section 10 of the Leasehold Reform Act 1967 (rights to be conveyed on enfranchisement) shall have effect subject to the provisions of the scheme, and the price payable under section 9 of that Act shall be adjusted so far as is appropriate (if at all); and

• (c) in relation to any acquisition such as is mentioned in section 69(1)(b) above, section 34 of, and Schedule 7 to, this Act shall have effect subject to the provisions of the scheme, and any price payable under Schedule 6 to this Act shall be adjusted so far as is appropriate (if at all).

• (13) Section 10 of the Local Land Charges Act 1975 (compensation for non-registration etc.) shall not apply to schemes which, by virtue of subsection (11) above, are local land charges.

• (14) In this section and section 73 as they apply in relation to England, “conservation area” and “local planning authority” have the same meaning as in the Planning (Listed Buildings and Conservation Areas) Act 1990; and in connection with the latter expression—

• (a) the expression “the planning Acts” in the Town and Country Planning Act 1990 as it applies in relation to England, shall be treated as including this Act; and

• (b) paragraphs 4 and 5 of Schedule 4 to the Planning (Listed Buildings and Conservation Areas) Act 1990 (further provisions as to exercise of functions by different authorities) shall apply in relation to functions under or by virtue of this section or section 73 of this Act as they apply in relation to functions under section 69 of that Act.

• (15) In this section and section 73 as they apply in relation to Wales—

• (a) “conservation area” has the same meaning as in the Historic Environment (Wales) Act 2023;

• (b) “local planning authority”‍ is to be interpreted in accordance with Part 1 of the Town and Country Planning Act 1990,

and in that Part as it applies in relation to Wales references to “the planning Acts are to be treated as including this Act.

Applications by two or more landlords or by representative bodies

71

• (1) Where, on a joint application made by two or more persons as landlords of neighbouring areas, it appears to the appropriate tribunal—

• (a) that a scheme could in accordance with subsections (1) and (2) of section 70 be approved as an estate management scheme for those areas, treated as a unit, if the interests of those persons were held by a single person, and

• (b) that the applicants are willing to be bound by the scheme to co-operate in the management of their property in those areas and in the administration of the scheme,

the tribunal may (subject to the provisions of section 70 and subsection (2) below) approve the scheme under that section as an estate management scheme for those areas as a whole.

• (2) Any such scheme shall be made subject to conditions (enforceable in such manner as may be provided by the scheme) for securing that the landlords and their successors co-operate as mentioned in subsection (1)(b) above.

• (3) Where it appears to the appropriate tribunal—

• (a) that a scheme could, on the application of any landlord or landlords, be approved under section 70 as an estate management scheme for any area or areas, and

• (b) that any body of persons—

• (i) is so constituted as to be capable of representing for the purposes of the scheme the persons occupying or interested in property in the area or areas (other than the landlord or landlords or his or their licensees), or such of them as are or may become entitled to acquire their landlord’s interest as mentioned in section 69(1)(a) or (b), and

• (ii) is otherwise suitable,

an application for the approval of the scheme under section 70 may be made to the tribunal by the representative body alone or by the landlord or landlords alone or by both jointly and, by leave of the tribunal, may be proceeded with by the representative body or by the landlord or landlords despite the fact that the body or landlord or landlords in question did not make the application.

• (4) Without prejudice to section 69(4)(b), any such scheme may with the consent of the landlord or landlords, or on such terms as to compensation or otherwise as appear to the tribunal to be just—

• (a) confer on the representative body any such rights or powers under the scheme as might be conferred on the landlord or landlords for the time being, or

• (b) enable the representative body to participate in the administration of the scheme or in the management by the landlord or landlords of his or their property in the area or areas.

• (5) Where any such scheme confers any rights or powers on the representative body in accordance with subsection (4) above, section 70(11) and (12)(a) shall have effect with such modifications (if any) as are provided for in the scheme.

Applications after expiry of two-year period

72

• (1) An application for the approval of a scheme for an area under section 70 (including an application in accordance with section 71(1) or (3)) may be made after the expiry of the period mentioned in subsection (1) of that section if the Secretary of State has, not more than six months previously, consented to the making of such an application for that area or for an area within which that area falls.

• (2) The Secretary of State may give consent under subsection (1) to the making of an application (“the proposed application”) only where he is satisfied—

• (a) that either or both of the conditions mentioned in subsection (3) apply; and

• (b) that adequate notice has been given to persons interested informing them of the request for consent and the purpose of the request.

• (3) The conditions referred to in subsection (2)(a) are—

• (a) that the proposed application could not have been made before the expiry of the period mentioned in section 70(1); and

• (b) that—

• (i) any application for the approval under section 70 of a scheme for the area, or part of the area, to which the proposed application relates would probably have been dismissed under section 70(10)(a) had it been made before the expiry of that period; but

• (ii) because of a change in any of the circumstances required to be considered under section 70(3) the proposed application would, if made following the giving of consent by the Secretary of State, probably be granted.

• (4) A request for consent under subsection (1) must be in writing and must comply with such requirements (if any) as to the form of, or the particulars to be contained in, any such request as the Secretary of State may by regulations prescribe.

• (5) The procedure for considering a request for consent under subsection (1) shall be such as may be prescribed by regulations made by the Secretary of State.

Applications by certain public bodies

73

• (1) Where it appears to the appropriate tribunal after the expiry of the period mentioned in section 70(1) that a scheme could, on the application of any landlord or landlords within that period, have been approved under section 70 as an estate management scheme for any area or areas within a conservation area, an application for the approval of the scheme under that section may, subject to subsections (2) and (3) below, be made to the tribunal by one or more bodies constituting the relevant authority for the purposes of this section.

• (2) An application under subsection (1) may only be made if—

• (a) no scheme has been approved under section 70 for the whole or any part of the area or areas to which the application relates (“the scheme area”); and

• (b) any application which has been made in accordance with section 70(1), 71(1) or 71(3) for the approval of a scheme for the whole or any part of the scheme area has been withdrawn or dismissed; and

• (c) no request for consent under section 72(1) which relates to the whole or any part of the scheme area is pending or has been granted within the last six months.

• (3) An application under subsection (1) above must be made within the period of six months beginning—

• (a) with the date on which the period mentioned in section 70(1) expires, or

• (b) if any application has been made as mentioned in subsection (2)(b) above, with the date (or, as the case may be, the latest date) on which any such application is withdrawn or dismissed,

whichever is the later; but if at any time during that period of six months a request of a kind mentioned in subsection (2)(c) above is pending or granted, an application under subsection (1) above may, subject to subsection (2) above, be made within the period of—

• (i) six months beginning with the date on which the request is withdrawn or refused, or

• (ii) twelve months beginning with the date on which the request is granted,

as the case may be.

• (4) A scheme approved on an application under subsection (1) may confer on the applicant or applicants any such rights or powers under the scheme as might have been conferred on the landlord or landlords for the time being.

• (5) For the purposes of this section the relevant authority for the scheme area is—

• (a) where that area falls wholly within the area of a local planning authority—

• (i) that authority; or

• (ii) subject to subsection (6), that authority acting jointly with the Historic Buildings and Monuments Commission for England (“the Commission”); or

• (iii) subject to subsection (6), the Commission; or

• (b) in any other case—

• (i) all of the local planning authorities within each of whose areas any part of the scheme area falls, acting jointly; or

• (ii) subject to subsection (6), one or more of those authorities acting jointly with the Commission; or

• (iii) subject to subsection (6), the Commission.

• (6) The Commission may make, or join in the making of, an application under subsection (1) only if—

• (a) the whole of the scheme area is in England; and

• (b) they have consulted any local planning authority within whose area the whole or any part of the scheme area falls.

• (7) Where a scheme is approved on an application under subsection (1) by two or more bodies acting jointly, the scheme shall, if the tribunal considers it appropriate, be made subject to conditions (enforceable in such manner as may be provided by the scheme) for securing that those bodies co-operate in the administration of the scheme.

• (8) Where a scheme is approved on an application under subsection (1)—

• (a) section 70(11) and (12)(a) shall (subject to subsection (9) below) have effect as if any reference to the landlord, or the landlord for the time being, for the area for which an estate management scheme has been approved were a reference to the applicant or applicants; and

• (b) section 70(12)(b) and (c) shall each have effect with the omission of so much of that provision as relates to the adjustment of any such price as is there mentioned.

• (9) A scheme so approved shall not be enforceable by a local planning authority in relation to any property falling outside the authority’s area; and in the case of a scheme approved on a joint application made by one or more local planning authorities and the Commission, the scheme may provide for any of its provisions to be enforceable in relation to property falling within the area of a local planning authority either by the authority alone, or by the Commission alone, or by the authority and the Commission acting jointly, as the scheme may provide.

• (10) For the purposes of—

• (a) section 9(1A) of the Leasehold Reform Act 1967 (purchase price on enfranchisement) as it applies in relation to any acquisition such as is mentioned in section 69(1)(a) above, and

• (b) paragraph 3 of Schedule 6 to this Act as it applies in relation to any acquisition such as is mentioned in section 69(1)(b) above (including that paragraph as it applies by virtue of paragraph 7 or 11 of that Schedule),

it shall be assumed that any scheme approved under subsection (1) and relating to the property in question had not been so approved, and accordingly any application for such a scheme to be approved, and the possibility of such an application being made, shall be disregarded.

• (11) Section 70(14) applies for the purposes of this section.

Effect of application for approval on claim to acquire freehold

74

• (1) Subject to subsections (5) and (6), this subsection applies where—

• (a) an application (“the scheme application”) is made for the approval of a scheme as an estate management scheme for any area or a request (“the request for consent”) is made for consent under section 72(1) in relation to any area, and

• (b) whether before or after the making of the application or request—

• (i) the tenant of a house in that area gives notice of his desire to have the freehold under Part I of the Leasehold Reform Act 1967, . . .

• (ii) a notice is given under section 13 above in respect of any premises in the area and

• (c) in the case of an application for the approval of a scheme as an estate management scheme, the scheme would extend to the house or premises if acquired in pursuance of the notice.

• (2) Where subsection (1) applies by virtue of paragraph (b)(i) of that subsection, then—

• (a) no further steps need be taken towards the execution of a conveyance to give effect to section 10 of the 1967 Act beyond those which appear to the landlord to be reasonable in the circumstances; and

• (b) if the notice referred to in subsection (1)(b)(i) (“the tenant’s notice”) was given before the making of the scheme application or the request for consent, that notice may be withdrawn by a further notice given by the tenant to the landlord.

• (3) Where subsection (1) applies by virtue of paragraph (b)(ii) of that subsection, then—

• (a) if the notice referred to in that provision (“the initial notice”) was given before the making of the scheme application or the request for consent, the notice may be withdrawn by a further notice given by the nominee purchaser to the reversioner;

• (b) unless the initial notice is so withdrawn, the reversioner shall, if he has not already given the nominee purchaser a counter-notice under section 21, give him by the date referred to in subsection (1) of that section a counter-notice which complies with one of the requirements set out in subsection (2) of that section (but in relation to which subsection (3) of that section need not be complied with); and

• (c) no proceedings shall be brought under Chapter I in pursuance of the initial notice otherwise than under section 22 or 23, and, if the court under either of those sections makes an order requiring the reversioner to give a further counter-notice to the nominee purchaser, the date by which it is to be given shall be such date as falls two months after subsection (1) above ceases to apply;

but no other counter-notice need be given under Chapter I, and (subject to the preceding provisions of this subsection) no further steps need be taken towards the final determination (whether by agreement or otherwise) of the terms of the proposed acquisition by the nominee purchaser beyond those which appear to the reversioner to be reasonable in the circumstances.

• (4) If the tenant’s notice or the initial notice is withdrawn in accordance with subsection (2) or (3) above, section 9(4) of the 1967 Act or (as the case may be) section 33 above shall not have effect to require the payment of any costs incurred in pursuance of that notice.

• (5) Where the scheme application is withdrawn or dismissed, subsection (1) does not apply at any time falling after—

• (a) the date of the withdrawal of the application, or

• (b) the date when the decision of the tribunal dismissing the application becomes final,

as the case may be; and subsection (1) does not apply at any time falling after the date on which a scheme is approved for the area referred to in that subsection, or for any part of it, in pursuance of the scheme application.

• (6) Where the request for consent is withdrawn or refused, subsection (1) does not apply at any time falling after the date on which the request is withdrawn or refused, as the case may be; and where the request is granted, subsection (1) does not apply at any time falling more than six months after the date on which it is granted (unless that subsection applies by virtue of an application made in reliance on the consent).

• (7) Where, in accordance with subsection (5) or (6), subsection (1) ceases to apply as from a particular date, it shall do so without prejudice to—

• (a) the effect of anything done before that date in pursuance of subsection (2) or (3); or

• (b) the operation of any provision of this Part, or of regulations made under it, in relation to anything so done.

• (8) If, however, no notice of withdrawal has been given in accordance with subsection (3) before the date when subsection (1) so ceases to apply and before that date either—

• (a) the reversioner has given the nominee purchaser a counter-notice under section 21 complying with the requirement set out in subsection (2)(a) of that section, or

• (b) section 23(6) would (but for subsection (3) above) have applied to require the reversioner to give a further counter-notice to the nominee purchaser,

the reversioner shall give a further counter-notice to the nominee purchaser within the period of two months beginning with the date when subsection (1) ceases to apply.

• (9) Subsections (3) to (5) of section 21 shall apply to any further counter-notice required to be given by the reversioner under subsection (8) above as if it were a counter-notice under that section complying with the requirement set out in subsection (2)(a) of that section; and sections 24 and 25 shall apply in relation to any such counter-notice as they apply in relation to one required by section 22(3).

• (10) In this section—

• “the 1967 Act” means the Leasehold Reform Act 1967; and

• “the nominee purchaser” and “the reversioner” have the same meaning as in Chapter I of this Part of this Act;

and references to the approval of a scheme for any area include references to the approval of a scheme for two or more areas in accordance with section 71 or 73 above.

Variation of existing schemes

75

• (1) Where a scheme under section 19 of the Leasehold Reform Act 1967 (estate management schemes in connection with enfranchisement under that Act) includes, in pursuance of subsection (6) of that section, provision for enabling the termination or variation of the scheme, or the exclusion of part of the area of the scheme, by or with the approval of the High Court, that provision shall have effect—

• (a) as if any reference to the High Court were a reference to the appropriate tribunal, and

• (b) with such modifications (if any) as are necessary in consequence of paragraph (a).

• (2) A scheme under that section may be varied by or with the approval of the appropriate tribunal for the purpose of, or in connection with, extending the scheme to property within the area of the scheme in which the landlord’s interest may be acquired as mentioned in section 69(1)(a) above.

• (3) Where any such scheme has been varied in accordance with subsection (2) above, section 19 of that Act shall apply as if the variation had been effected under provisions included in the scheme in pursuance of subsection (6) of that section (and accordingly the scheme may be further varied under provisions so included).

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter V — TENANTS’ RIGHT TO MANAGEMENT AUDIT

Right to audit management by landlord

76

• (1) This Chapter has effect to confer on two or more qualifying tenants of dwellings held on leases from the same landlord the right, exercisable subject to and in accordance with this Chapter, to have an audit carried out on their behalf which relates to the management of the relevant premises and any appurtenant property by or on behalf of the landlord.

• (2) That right shall be exercisable—

• (a) where the relevant premises consist of or include two dwellings let to qualifying tenants of the same landlord, by either or both of those tenants; and

• (b) where the relevant premises consist of or include three or more dwellings let to qualifying tenants of the same landlord, by not less than two-thirds of those tenants;

and in this Chapter the dwellings let to those qualifying tenants are referred to as “the constituent dwellings”.

• (3) In relation to an audit on behalf of two or more qualifying tenants—

• (a) “the relevant premises” means so much of—

• (i) the building or buildings containing the dwellings let to those tenants, and

• (ii) any other building or buildings,

as constitutes premises in relation to which management functions are discharged in respect of the costs of which common service charge contributions are payable under the leases of those qualifying tenants; and

• (b) “appurtenant property” means so much of any property not contained in the relevant premises as constitutes property in relation to which any such management functions are discharged.

• (4) This Chapter also has effect to confer on a single qualifying tenant of a dwelling the right, exercisable subject to and in accordance with this Chapter, to have an audit carried out on his behalf which relates to the management of the relevant premises and any appurtenant property by or on behalf of the landlord.

• (5) That right shall be exercisable by a single qualifying tenant of a dwelling where the relevant premises contain no other dwelling let to a qualifying tenant apart from that let to him.

• (6) In relation to an audit on behalf of a single qualifying tenant—

• (a) “the relevant premises” means so much of—

• (i) the building containing the dwelling let to him, and

• (ii) any other building or buildings,

as constitutes premises in relation to which management functions are discharged in respect of the costs of which a service charge is payable under his lease (whether as a common service charge contribution or otherwise); and

• (b) “appurtenant property” means so much of any property not contained in the relevant premises as constitutes property in relation to which any such management functions are discharged.

• (7) The provisions of sections 78 to 83 shall, with any necessary modifications, have effect in relation to an audit on behalf of a single qualifying tenant as they have effect in relation to an audit on behalf of two or more qualifying tenants.

• (8) For the purposes of this section common service charge contributions are payable by two or more persons under their leases if they may be required under the terms of those leases to contribute to the same costs by the payment of service charges.

Qualifying tenants

77

• (1) Subject to the following provisions of this section, a tenant is a qualifying tenant of a dwelling for the purposes of this Chapter if—

• (a) he is a tenant of the dwelling under a long lease other than a business lease; and

• (b) any service charge is payable under the lease.

• (2) For the purposes of subsection (1) a lease is a long lease if—

• (a) it is a lease falling within any of paragraphs (a) to (c) of subsection (1) of section 7; or

• (b) it is a shared ownership lease (within the meaning of that section), whether granted in pursuance of Part V of the Housing Act 1985 or otherwise and whatever the share of the tenant under it.

• (3) No dwelling shall have more than one qualifying tenant at any one time.

• (4) Accordingly—

• (a) where a dwelling is for the time being let under two or more leases falling within subsection (1), any tenant under any of those leases which is superior to that held by any other such tenant shall not be a qualifying tenant of the dwelling for the purposes of this Chapter; and

• (b) where a dwelling is for the time being let to joint tenants under a lease falling within subsection (1), the joint tenants shall (subject to paragraph (a)) be regarded for the purposes of this Chapter as jointly constituting the qualifying tenant of the dwelling.

• (5) A person can, however, be (or be among those constituting) the qualifying tenant of each of two or more dwellings at the same time, whether he is tenant of those dwellings under one lease or under two or more separate leases.

• (6) Where two or more persons constitute the qualifying tenant of a dwelling in accordance with subsection (4)(b), any one or more of those persons may sign a notice under section 80 on behalf of both or all of them.

Management audits

78

• (1) The audit referred to in section 76(1) is an audit carried out for the purpose of ascertaining—

• (a) the extent to which the obligations of the landlord which—

• (i) are owed to the qualifying tenants of the constituent dwellings, and

• (ii) involve the discharge of management functions in relation to the relevant premises or any appurtenant property,

are being discharged in an efficient and effective manner; and

• (b) the extent to which sums payable by those tenants by way of service charges are being applied in an efficient and effective manner;

and in this Chapter any such audit is referred to as a “management audit”.

• (2) In determining whether any such obligations as are mentioned in subsection (1)(a) are being discharged in an efficient and effective manner, regard shall be had to any applicable provisions of any code of practice for the time being approved by the Secretary of State under section 87.

• (3) A management audit shall be carried out by a person who—

• (a) is qualified for appointment by virtue of subsection (4); and

• (b) is appointed—

• (i) in the circumstances mentioned in section 76(2)(a), by either or both of the qualifying tenants of the constituent dwellings, or

• (ii) in the circumstances mentioned in section 76(2)(b), by not less than two-thirds of the qualifying tenants of the constituent dwellings;

and in this Chapter any such person is referred to as “the auditor”.

• (4) A person is qualified for appointment for the purposes of subsection (3) above if—

• (a) he has the necessary qualification (within the meaning of subsection (1) of section 28 of the 1985 Act (meaning of “qualified accountant”)) or is a qualified surveyor;

• (b) he is not disqualified from acting (within the meaning of that subsection); and

• (c) he is not a tenant of any premises contained in the relevant premises.

• (5) For the purposes of subsection (4)(a) above a person is a qualified surveyor if he is a fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers and Auctioneers or satisfies such other requirement or requirements as may be prescribed by regulations made by the Secretary of State.

• (6) The auditor may appoint such persons to assist him in carrying out the audit as he thinks fit.

Rights exercisable in connection with management audits

79

• (1) Where the qualifying tenants of any dwellings exercise under section 80 their right to have a management audit carried out on their behalf, the rights conferred on the auditor by subsection (2) below shall be exercisable by him in connection with the audit.

• (2) The rights conferred on the auditor by this subsection are—

• (a) a right to require the landlord—

• (i) to supply him with such a summary as is referred to in section 21(1) of the 1985 Act (request for summary of relevant costs) in connection with any service charges payable by the qualifying tenants of the constituent dwellings, and

• (ii) to afford him reasonable facilities for inspecting, or taking copies of or extracts from, the accounts, receipts and other documents supporting any such summary;

• (b) a right to require the landlord or any relevant person to afford him reasonable facilities for inspecting any other documents sight of which is reasonably required by him for the purpose of carrying out the audit; and

• (c) a right to require the landlord or any relevant person to afford him reasonable facilities for taking copies of or extracts from any documents falling within paragraph (b).

• (3) The rights conferred on the auditor by subsection (2) shall be exercisable by him—

• (a) in relation to the landlord, by means of a notice under section 80; and

• (b) in relation to any relevant person, by means of a notice given to that person at (so far as is reasonably practicable) the same time as a notice under section 80 is given to the landlord;

and, where a notice is given to any relevant person in accordance with paragraph (b) above, a copy of that notice shall be given to the landlord by the auditor.

• (4) The auditor shall also be entitled, on giving notice in accordance with section 80, to carry out an inspection of any common parts comprised in the relevant premises or any appurtenant property.

• (5) The landlord or (as the case may be) any relevant person shall—

• (a) where facilities for the inspection of any documents are required under subsection (2)(a)(ii) or (b), make those facilities available free of charge;

• (b) where any documents are required to be supplied under subsection (2)(a)(i) or facilities for the taking of copies or extracts are required under subsection (2)(a)(ii) or (c), be entitled to supply those documents or (as the case may be) make those facilities available on payment of such reasonable charge as he may determine.

• (6) The requirement imposed on the landlord by subsection (5)(a) to make any facilities available free of charge shall not be construed as precluding the landlord from treating as part of his costs of management any costs incurred by him in connection with making those facilities so available.

• (7) In this Chapter “relevant person” means a person (other than the landlord) who—

• (a) is charged with responsibility—

• (i) for the discharge of any such obligations as are mentioned in section 78(1)(a), or

• (ii) for the application of any such service charges as are mentioned in section 78(1)(b); or

• (b) has a right to enforce payment of any such service charges.

• (8) In this Chapter references to the auditor in the context of—

• (a) being afforded any such facilities as are mentioned in subsection (2), or

• (b) the carrying out of any inspection under subsection (4),

shall be read as including a person appointed by the auditor under section 78(6).

Exercise of right to have a management audit

80

• (1) The right of any qualifying tenants to have a management audit carried out on their behalf shall be exercisable by the giving of a notice under this section.

• (2) A notice given under this section—

• (a) must be given to the landlord by the auditor, and

• (b) must be signed by each of the tenants on whose behalf it is given.

• (3) Any such notice must—

• (a) state the full name of each of those tenants and the address of the dwelling of which he is a qualifying tenant;

• (b) state the name and address of the auditor;

• (c) specify any documents or description of documents—

• (i) which the landlord is required to supply to the auditor under section 79(2)(a)(i), or

• (ii) in respect of which he is required to afford the auditor facilities for inspection or for taking copies or extracts under any other provision of section 79(2); and

• (d) if the auditor proposes to carry out an inspection under section 79(4), state the date on which he proposes to carry out the inspection.

• (4) The date specified under subsection (3)(d) must be a date falling not less than one month nor more than two months after the date of the giving of the notice.

• (5) A notice is duly given under this section to the landlord of any qualifying tenants if it is given to a person who receives on behalf of the landlord the rent payable by any such tenants; and a person to whom such a notice is so given shall forward it as soon as may be to the landlord.

Procedure following giving of notice under section 80

81

• (1) Where the landlord is given a notice under section 80, then within the period of one month beginning with the date of the giving of the notice, he shall—

• (a) supply the auditor with any document specified under subsection (3)(c)(i) of that section, and afford him, in respect of any document falling within section 79(2)(a)(ii), any facilities specified in relation to it under subsection (3)(c)(ii) of section 80;

• (b) in the case of every other document or description of documents specified in the notice under subsection (3)(c)(ii) of that section, either—

• (i) afford the auditor facilities for inspection or (as the case may be) taking copies or extracts in respect of that document or those documents, or

• (ii) give the auditor a notice stating that he objects to doing so for such reasons as are specified in the notice; and

• (c) if a date is specified in the notice under subsection (3)(d) of that section, either approve the date or propose another date for the carrying out of an inspection under section 79(4).

• (2) Any date proposed by the landlord under subsection (1)(c) must be a date falling not later than the end of the period of two months beginning with the date of the giving of the notice under section 80.

• (3) Where a relevant person is given a notice under section 79 requiring him to afford the auditor facilities for inspection or taking copies or extracts in respect of any documents or description of documents specified in the notice, then within the period of one month beginning with the date of the giving of the notice, he shall, in the case of every such document or description of documents, either—

• (a) afford the auditor the facilities required by him; or

• (b) give the auditor a notice stating that he objects to doing so for such reasons as are specified in the notice.

• (4) If by the end of the period of two months beginning with—

• (a) the date of the giving of the notice under section 80, or

• (b) the date of the giving of such a notice under section 79 as is mentioned in subsection (3) above,

the landlord or (as the case may be) a relevant person has failed to comply with any requirement of the notice, the court may, on the application of the auditor, make an order requiring the landlord or (as the case may be) the relevant person to comply with that requirement within such period as is specified in the order.

• (5) The court shall not make an order under subsection (4) in respect of any document or documents unless it is satisfied that the document or documents falls or fall within paragraph (a) or (b) of section 79(2).

• (6) If by the end of the period of two months specified in subsection (2) no inspection under section 79(4) has been carried out by the auditor, the court may, on the application of the auditor, make an order providing for such an inspection to be carried out on such date as is specified in the order.

• (7) Any application for an order under subsection (4) or (6) must be made before the end of the period of four months beginning with—

• (a) in the case of an application made in connection with a notice given under section 80, the date of the giving of that notice; or

• (b) in the case of an application made in connection with such a notice under section 79 as is mentioned in subsection (3) above, the date of the giving of that notice.

Requirement relating to information etc. held by superior landlord

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• (1) Where the landlord is required by a notice under section 80 to supply any summary falling within section 79(2)(a), and any information necessary for complying with the notice so far as relating to any such summary is in the possession of a superior landlord—

• (a) the landlord shall make a written request for the relevant information to the person who is his landlord (and so on, if that person is himself not the superior landlord);

• (b) the superior landlord shall comply with that request within the period of one month beginning with the date of the making of the request; and

• (c) the landlord who received the notice shall then comply with it so far as relating to any such summary within the time allowed by section 81(1) or such further time, if any, as is reasonable.

• (2) Where—

• (a) the landlord is required by a notice under section 80 to afford the auditor facilities for inspection or taking copies or extracts in respect of any documents or description of documents specified in the notice, and

• (b) any of the documents in question is in the custody or under the control of a superior landlord,

the landlord shall on receiving the notice inform the auditor as soon as may be of that fact and of the name and address of the superior landlord, and the auditor may then give the superior landlord a notice requiring him to afford the facilities in question in respect of the document.

• (3) Subsections (3) to (5) and (7) of section 81 shall, with any necessary modifications, have effect in relation to a notice given to a superior landlord under subsection (2) above as they have effect in relation to any such notice given to a relevant person as is mentioned in subsection (3) of that section.

Supplementary provisions

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• (1) Where—

• (a) a notice has been given to a landlord under section 80, and

• (b) at a time when any obligations arising out of the notice remain to be discharged by him—

• (i) he disposes of the whole or part of his interest as landlord of the qualifying tenants of the constituent dwellings, and

• (ii) the person acquiring any such interest of the landlord is in a position to discharge any of those obligations to any extent,

that person shall be responsible for discharging those obligations to that extent, as if he had been given the notice under that section.

• (2) If the landlord is, despite any such disposal, still in a position to discharge those obligations to the extent referred to in subsection (1), he shall remain responsible for so discharging them; but otherwise the person referred to in that subsection shall be responsible for so discharging them to the exclusion of the landlord.

• (3) Where a person is so responsible for discharging any such obligations (whether with the landlord or otherwise)—

• (a) references to the landlord in section 81 shall be read as including, or as, references to that person to such extent as is appropriate to reflect his responsibility for discharging those obligations; but

• (b) in connection with the discharge of any such obligations by that person, that section shall apply as if any reference to the date of the giving of the notice under section 80 were a reference to the date of the disposal referred to in subsection (1).

• (4) Where—

• (a) a notice has been given to a relevant person under section 79, and

• (b) at a time when any obligations arising out of the notice remain to be discharged by him, he ceases to be a relevant person, but

• (c) he is, despite ceasing to be a relevant person, still in a position to discharge those obligations to any extent,

he shall nevertheless remain responsible for discharging those obligations to that extent; and section 81 shall accordingly continue to apply to him as if he were still a relevant person.

• (5) Where—

• (a) a notice has been given to a landlord under section 80, or

• (b) a notice has been given to a relevant person under section 79,

then during the period of twelve months beginning with the date of that notice, no subsequent such notice may be given to the landlord or (as the case may be) that person on behalf of any persons who, in relation to the earlier notice, were qualifying tenants of the constituent dwellings.

Interpretation of Chapter V

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In this Chapter—

• “the 1985 Act” means the Landlord and Tenant Act 1985;

• “appurtenant property” shall be construed in accordance with section 76(3) or (6);

• “the auditor”, in relation to a management audit, means such a person as is mentioned in section 78(3);

• “the constituent dwellings” means the dwellings referred to in section 76(2)(a) or (b) (as the case may be);

• “landlord” means immediate landlord;

• “management audit” means such an audit as is mentioned in section 78(1);

• “management functions” includes functions with respect to the provision of services or the repair, maintenance , improvement or insurance of property;

• “relevant person” has the meaning given by section 79(7);

• “the relevant premises” shall be construed in accordance with section 76(3) or (6);

• “service charge” has the meaning given by section 18(1) of the 1985 Act.

Chapter VI — MISCELLANEOUS

Compulsory acquisition of landlord’s interest

Amendment of Part III of Landlord and Tenant Act 1987

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• (1) Part III of the Landlord and Tenant Act 1987 (compulsory acquisition by tenants of their landlord’s interest) shall be amended as follows.

• (2) In section 25 (compulsory acquisition of landlord’s interest by qualifying tenants)—

• (a) for subsection (2)(c) there shall be substituted—

(c) the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.

; and

• (b) subsection (3) shall be omitted.

• (3) In section 27(4) (meaning of requisite majority in relation to qualifying tenants), for “more than 50 per cent.” there shall be substituted “ not less than two-thirds ”.

• (4) In section 29(2) (conditions for making acquisition orders), the words from “and (c)” onwards shall be omitted.

Variation of leases

Variation of leases under Part IV of Landlord and Tenant Act 1987

86

In section 35(4) of the Landlord and Tenant Act 1987 (variation of lease on grounds that it fails to make satisfactory provision with respect to the computation of a service charge), in paragraph (c), for “exceed” there shall be substituted “ either exceed or be less than ”.

Codes of practice

Approval by Secretary of State of codes of management practice

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• (1) The Secretary of State may, if he considers it appropriate to do so, by order—

• (a) approve any code of practice—

• (i) which appears to him to be designed to promote desirable practices in relation to any matter or matters directly or indirectly concerned with the management of residential property by relevant persons; and

• (ii) which has been submitted to him for his approval;

• (b) approve any modifications of any such code which have been so submitted; or

• (c) withdraw his approval for any such code or modifications.

• (2) The Secretary of State shall not approve any such code or any modifications of any such code unless he is satisfied that arrangements have been made for the text of the code or the modifications to be published in such manner as he considers appropriate for bringing the provisions of the code or the modifications to the notice of those likely to be affected by them (which, in the case of modifications of a code, may include publication of a text of the code incorporating the modifications).

• (3) The power of the Secretary of State under this section to approve a code of practice which has been submitted to him for his approval includes power to approve a part of any such code; and references in this section to a code of practice may accordingly be read as including a reference to a part of a code of practice.

• (4) At any one time there may be two or more codes of practice for the time being approved under this section.

• (5) A code of practice approved under this section may make different provision with respect to different cases or descriptions of cases, including different provision for different areas.

• (6) Without prejudice to the generality of subsections (1) and (5)—

• (a) a code of practice approved under this section may, in relation to any such matter as is referred to in subsection (1), make provision in respect of relevant persons who are under an obligation to discharge any function in connection with that matter as well as in respect of relevant persons who are not under such an obligation; and

• (b) any such code may make provision with respect to—

• (i) the resolution of disputes with respect to residential property between relevant persons and the tenants of such property;

• (ii) competitive tendering for works in connection with such property; and

• (iii) the administration of trusts in respect of amounts paid by tenants by way of service charges.

• (7) A failure on the part of any person to comply with any provision of a code of practice for the time being approved under this section shall not of itself render him liable to any proceedings; but in any proceedings before a court or tribunal—

• (a) any code of practice approved under this section shall be admissible in evidence; and

• (b) any provision of any such code which appears to the court or tribunal to be relevant to any question arising in the proceedings shall be taken into account in determining that question.

• (8) For the purposes of this section—

• (a) “relevant person” means any landlord of residential property or any person who discharges management functions in respect of such property, and for this purpose “management functions” includes functions with respect to the provision of services or the repair, maintenance , improvement or insurance of such property;

• (b) “residential property” means any building or part of a building which consists of one or more dwellings let on leases, but references to residential property include—

• (i) any garage, outhouse, garden, yard and appurtenances belonging to or usually enjoyed with such dwellings,

• (ii) any common parts of any such building or part, and

• (iii) any common facilities which are not within any such building or part; and

• (c) “service charge” means an amount payable by a tenant of a dwelling as part of or in addition to the rent—

• (i) which is payable, directly or indirectly, for services, repairs, maintenance , improvements or insurance or any relevant person’s costs of management, and

• (ii) the whole or part of which varies or may vary according to the costs or estimated costs incurred or to be incurred by any relevant person in connection with the matters mentioned in sub-paragraph (i).

• (9) This section applies in relation to dwellings let on licences to occupy as it applies in relation to dwellings let on leases, and references in this section to landlords and tenants of residential property accordingly include references to licensors and licensees of such property.

Jurisdiction of ... tribunals in relation to enfranchisement etc. of Crown land

Jurisdiction of leasehold valuation tribunals in relation to enfranchisement etc. of Crown land

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• (1) This section applies where any tenant under a lease from the Crown is proceeding with a view to acquiring the freehold or an extended lease of a house and premises in circumstances in which, but for the existence of any Crown interest in the land subject to the lease, he would be entitled to acquire the freehold or such an extended lease under Part I of the Leasehold Reform Act 1967.

• (2) Where—

• (a) this section applies in accordance with subsection (1), and

• (b) any question arises in connection with the acquisition of the freehold or an extended lease of the house and premises which is such that, if the tenant were proceeding as mentioned in that subsection in pursuance of a claim made under Part I of that Act, the appropriate tribunal ... would have jurisdiction to determine it in proceedings under that Part, and

• (c) it is agreed between—

• (i) the appropriate authority and the tenant, and

• (ii) all other persons (if any) whose interests would fall to be represented in proceedings brought under that Part for the determination of that question by such a tribunal,

that that question should be determined by such a tribunal,

the appropriate tribunal shall have jurisdiction to determine that question.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) For the purposes of this section “lease from the Crown” means a lease of land in which there is, or has during the subsistence of the lease been, a Crown interest superior to the lease; and “Crown interest” and “the appropriate authority” in relation to a Crown interest mean respectively—

• (a) an interest comprised in the Crown Estate, and the Crown Estate Commissioners;

• (b) an interest belonging to Her Majesty in right of the Duchy of Lancaster, and the Chancellor of the Duchy;

• (c) an interest belonging to the Duchy of Cornwall, and such person as the Duke of Cornwall or the possessor for the time being of the Duchy appoints;

• (d) any other interest belonging to a government department or held on behalf of Her Majesty for the purposes of a government department, and the Minister in charge of that department.

• (6A) For the purposes of subsection (2), “appropriate tribunal” means—

• (a) in relation to a house and premises in England, the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal; and

• (b) in relation to a house and premises in Wales, a leasehold valuation tribunal.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision of accommodation for persons with mental disorders

Avoidance of provisions preventing occupation of leasehold property by persons with mental disorders.

89

• (1) Any agreement relating to a lease of any property which comprises or includes a dwelling (whether contained in the instrument creating the lease or not and whether made before the creation of the lease or not) shall be void in so far as it would otherwise have the effect of prohibiting or imposing any restriction on—

• (a) the occupation of the dwelling, or of any part of the dwelling, by persons with mental disorders (within the meaning of the Mental Health Act 1983), or

• (b) the provision of accommodation within the dwelling for such persons.

• (2) Subsection (1) applies to any agreement made after the coming into force of this section.

Chapter VII — GENERAL

Jurisdiction of county courts

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• (1) Any jurisdiction expressed to be conferred on the court by this Part shall be exercised by the county court.