Legalize / United Kingdom / Public General Act

Commonhold and Leasehold Reform Act 2002

Type Public General Act

Publication 2002-05-01

Last updated 2025-03-03

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(b) the property comprised in every other lease consists of either a part of the flat (with or without appurtenant property) or appurtenant property only,

there shall be taken to be a single long lease of the property comprised in such of those leases as are long leases.

Claim to acquire right

Notice inviting participation

78

(1) Before making a claim to acquire the right to manage any premises, a RTM company must give notice to each person who at the time when the notice is given—

(a) is the qualifying tenant of a flat contained in the premises, but

(b) neither is nor has agreed to become a member of the RTM company.

(2) A notice given under this section (referred to in this Chapter as a “notice of invitation to participate”) must—

(a) state that the RTM company intends to acquire the right to manage the premises,

(b) state the names of the members of the RTM company,

(d) contain such other particulars (if any) as may be required to be contained in notices of invitation to participate by regulations made by the appropriate national authority.

(3) A notice of invitation to participate must also comply with such requirements (if any) about the form of notices of invitation to participate as may be prescribed by regulations so made.

(4) A notice of invitation to participate must either—

(a) be accompanied by a copy of the articles of association of the RTM company, or

(b) include a statement about inspection and copying of the articles of association of the RTM company.

(5) A statement under subsection (4)(b) must—

(a) specify a place (in England or Wales) at which the articles of association may be inspected,

(b) specify as the times at which they may be inspected periods of at least two hours on each of at least three days (including a Saturday or Sunday or both) within the seven days beginning with the day following that on which the notice is given,

(c) specify a place (in England or Wales) at which, at any time within those seven days, a copy of the articles of association may be ordered, and

(d) specify a fee for the provision of an ordered copy, not exceeding the reasonable cost of providing it.

(6) Where a notice given to a person includes a statement under subsection (4)(b), the notice is to be treated as not having been given to him if he is not allowed to undertake an inspection, or is not provided with a copy, in accordance with the statement.

(7) A notice of invitation to participate is not invalidated by any inaccuracy in any of the particulars required by or by virtue of this section.

Notice of claim to acquire right

79

(1) A claim to acquire the right to manage any premises is made by giving notice of the claim (referred to in this Chapter as a “claim notice”); and in this Chapter the “relevant date”, in relation to any claim to acquire the right to manage, means the date on which notice of the claim is given.

(2) The claim notice may not be given unless each person required to be given a notice of invitation to participate has been given such a notice at least 14 days before.

(3) The claim notice must be given by a RTM company which complies with subsection (4) or (5).

(4) If on the relevant date there are only two qualifying tenants of flats contained in the premises, both must be members of the RTM company.

(5) In any other case, the membership of the RTM company must on the relevant date include a number of qualifying tenants of flats contained in the premises which is not less than one-half of the total number of flats so contained.

(6) The claim notice must be given to each person who on the relevant date is—

(a) landlord under a lease of the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the Landlord and Tenant Act 1987 (c. 31) (referred to in this Part as “the 1987 Act”) to act in relation to the premises, or any premises containing or contained in the premises.

(7) Subsection (6) does not require the claim notice to be given to a person who cannot be found or whose identity cannot be ascertained; but if this subsection means that the claim notice is not required to be given to anyone at all, section 85 applies.

(8) A copy of the claim notice must be given to each person who on the relevant date is the qualifying tenant of a flat contained in the premises.

(9) Where a manager has been appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, a copy of the claim notice must also be given to the ... tribunal or court by which he was appointed.

Contents of claim notice

80

(1) The claim notice must comply with the following requirements.

(2) It must specify the premises and contain a statement of the grounds on which it is claimed that they are premises to which this Chapter applies.

(3) It must state the full name of each person who is both—

(a) the qualifying tenant of a flat contained in the premises, and

(b) a member of the RTM company,

and the address of his flat.

(4) And it must contain, in relation to each such person, such particulars of his lease as are sufficient to identify it, including—

(a) the date on which it was entered into,

(b) the term for which it was granted, and

(5) It must state the name and registered office of the RTM company.

(6) It must specify a date, not earlier than one month after the relevant date, by which each person who was given the notice under section 79(6) may respond to it by giving a counter-notice under section 84.

(7) It must specify a date, at least three months after that specified under subsection (6), on which the RTM company intends to acquire the right to manage the premises.

(8) It must also contain such other particulars (if any) as may be required to be contained in claim notices by regulations made by the appropriate national authority.

(9) And it must comply with such requirements (if any) about the form of claim notices as may be prescribed by regulations so made.

Claim notice: supplementary

81

(1) A claim notice is not invalidated by any inaccuracy in any of the particulars required by or by virtue of section 80.

(2) Where any of the members of the RTM company whose names are stated in the claim notice was not the qualifying tenant of a flat contained in the premises on the relevant date, the claim notice is not invalidated on that account, so long as a sufficient number of qualifying tenants of flats contained in the premises were members of the company on that date; and for this purpose a “sufficient number” is a number (greater than one) which is not less than one-half of the total number of flats contained in the premises on that date.

(3) Where any premises have been specified in a claim notice, no subsequent claim notice which specifies—

(a) the premises, or

(b) any premises containing or contained in the premises,

may be given so long as the earlier claim notice continues in force.

(4) Where a claim notice is given by a RTM company it continues in force from the relevant date until the right to manage is acquired by the company unless it has previously—

(a) been withdrawn or deemed to be withdrawn by virtue of any provision of this Chapter, or

(b) ceased to have effect by reason of any other provision of this Chapter.

Right to obtain information

82

(1) A company which is a RTM company in relation to any premises may give to any person a notice requiring him to provide the company with any information—

(a) which is in his possession or control, and

(b) which the company reasonably requires for ascertaining the particulars required by or by virtue of section 80 to be included in a claim notice for claiming to acquire the right to manage the premises.

(2) Where the information is recorded in a document in the person’s possession or control, the RTM company may give him a notice requiring him—

(a) to permit any person authorised to act on behalf of the company at any reasonable time to inspect the document (or, if the information is recorded in the document in a form in which it is not readily intelligible, to give any such person access to it in a readily intelligible form), and

(b) to supply the company with a copy of the document containing the information in a readily intelligible form ....

(3) A person to whom a notice is given must comply with it within the period of 28 days beginning with the day on which it is given.

(4) The RTM company is liable for the reasonable costs incurred by a person in complying (in accordance with this section) with a notice under this section.

(5) Any question arising in relation to the amount of the costs payable by the RTM company is, in default of agreement, to be determined by the appropriate tribunal.

Right of access

83

(1) Where a RTM company has given a claim notice in relation to any premises, each of the persons specified in subsection (2) has a right of access to any part of the premises if that is reasonable in connection with any matter arising out of the claim to acquire the right to manage.

(2) The persons referred to in subsection (1) are—

(a) any person authorised to act on behalf of the RTM company,

(b) any person who is landlord under a lease of the whole or any part of the premises and any person authorised to act on behalf of any such person,

(c) any person who is party to such a lease otherwise than as landlord or tenant and any person authorised to act on behalf of any such person, and

(d) any manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, and any person authorised to act on behalf of any such manager.

(3) The right conferred by this section is exercisable, at any reasonable time, on giving not less than ten days’ notice—

(a) to the occupier of any premises to which access is sought, or

(b) if those premises are unoccupied, to the person entitled to occupy them.

Counter-notices

84

(1) A person who is given a claim notice by a RTM company under section 79(6) may give a notice (referred to in this Chapter as a “counter-notice”) to the company no later than the date specified in the claim notice under section 80(6).

(2) A counter-notice is a notice containing a statement either—

(a) admitting that the RTM company was on the relevant date entitled to acquire the right to manage the premises specified in the claim notice, or

(b) alleging that, by reason of a specified provision of this Chapter, the RTM company was on that date not so entitled,

and containing such other particulars (if any) as may be required to be contained in counter-notices, and complying with such requirements (if any) about the form of counter-notices, as may be prescribed by regulations made by the appropriate national authority.

(3) Where the RTM company has been given one or more counter-notices containing a statement such as is mentioned in subsection (2)(b), the company may apply to the appropriate tribunal for a determination that it was on the relevant date entitled to acquire the right to manage the premises.

(4) An application under subsection (3) must be made not later than the end of the period of two months beginning with the day on which the counter-notice (or, where more than one, the last of the counter-notices) was given.

(5) Where the RTM company has been given one or more counter-notices containing a statement such as is mentioned in subsection (2)(b), the RTM company does not acquire the right to manage the premises unless—

(a) on an application under subsection (3) it is finally determined that the company was on the relevant date entitled to acquire the right to manage the premises, or

(b) the person by whom the counter-notice was given agrees, or the persons by whom the counter-notices were given agree, in writing that the company was so entitled.

(6) If on an application under subsection (3) it is finally determined that the company was not on the relevant date entitled to acquire the right to manage the premises, the claim notice ceases to have effect.

(7) A determination on an application under subsection (3) becomes final—

(a) if not appealed against, at the end of the period for bringing an appeal, or

(b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

(8) An appeal is disposed of—

(a) if it is determined and the period for bringing any further appeal has ended, or

(b) if it is abandoned or otherwise ceases to have effect.

Landlords etc. not traceable

85

(1) This section applies where a RTM company wishing to acquire the right to manage premises—

(a) complies with subsection (4) or (5) of section 79, and

(b) would not have been precluded from giving a valid notice under that section with respect to the premises,

but cannot find, or ascertain the identity of, any of the persons to whom the claim notice would be required to be given by subsection (6) of that section.

(2) The RTM company may apply to the appropriate tribunal for an order that the company is to acquire the right to manage the premises.

(3) Such an order may be made only if the company has given notice of the application to each person who is the qualifying tenant of a flat contained in the premises.

(4) Before an order is made the company may be required to take such further steps by way of advertisement or otherwise as is determined proper for the purpose of tracing the persons who are—

(a) landlords under leases of the whole or any part of the premises, or

(b) parties to such leases otherwise than as landlord or tenant.

(5) If any of those persons is traced—

(a) after an application for an order is made, but

(b) before the making of an order,

no further proceedings shall be taken with a view to the making of an order.

(6) Where that happens—

(a) the rights and obligations of all persons concerned shall be determined as if the company had, at the date of the application, duly given notice under section 79 of its claim to acquire the right to manage the premises, and

(b) the ... tribunal may give such directions as it thinks fit as to the steps to be taken for giving effect to their rights and obligations, including directions modifying or dispensing with any of the requirements imposed by or by virtue of this Chapter.

(7) An application for an order may be withdrawn at any time before an order is made and, after it is withdrawn, subsection (6)(a) does not apply.

(8) But where any step is taken for the purpose of giving effect to subsection (6)(a) in the case of any application, the application shall not afterwards be withdrawn except—

(a) with the consent of the person or persons traced, or

(b) by permission of the ... tribunal.

(9) And permission shall be given only where it appears just that it should be given by reason of matters coming to the knowledge of the RTM company in consequence of the tracing of the person or persons traced.

Withdrawal of claim notice

86

(1) A RTM company which has given a claim notice in relation to any premises may, at any time before it acquires the right to manage the premises, withdraw the claim notice by giving a notice to that effect (referred to in this Chapter as a “notice of withdrawal”).

(2) A notice of withdrawal must be given to each person who is—

(a) landlord under a lease of the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant,

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, or

(d) the qualifying tenant of a flat contained in the premises.

Deemed withdrawal

87

(1) If a RTM company has been given one or more counter-notices containing a statement such as is mentioned in subsection (2)(b) of section 84 but either—

(a) no application for a determination under subsection (3) of that section is made within the period specified in subsection (4) of that section, or

(b) such an application is so made but is subsequently withdrawn,

the claim notice is deemed to be withdrawn.

(2) The withdrawal shall be taken to occur—

(a) if paragraph (a) of subsection (1) applies, at the end of the period specified in that paragraph, and

(b) if paragraph (b) of that subsection applies, on the date of the withdrawal of the application.

(3) Subsection (1) does not apply if the person by whom the counter-notice was given has, or the persons by whom the counter-notices were given have, (before the time when the withdrawal would be taken to occur) agreed in writing that the RTM company was on the relevant date entitled to acquire the right to manage the premises.

(4) The claim notice is deemed to be withdrawn if—

(a) a winding-up order . . . is made, or a resolution for voluntary winding-up is passed, with respect to the RTM company, or the RTM company enters administration,

(b) a receiver or a manager of the RTM company’s undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the RTM company comprised in or subject to the charge,

(c) a voluntary arrangement proposed in the case of the RTM company for the purposes of Part 1 of the Insolvency Act 1986 (c. 45) is approved under that Part of that Act, or

(d) the RTM company’s name is struck off the register under section 1000, 1001 or 1003 of the Companies Act 2006.

Costs: general

88

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Costs where claim ceases

89

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Acquisition of right

The acquisition date

90

(1) This section makes provision about the date which is the acquisition date where a RTM company acquires the right to manage any premises.

(2) Where there is no dispute about entitlement, the acquisition date is the date specified in the claim notice under section 80(7).

(3) For the purposes of this Chapter there is no dispute about entitlement if—

(a) no counter-notice is given under section 84, or

(b) the counter-notice given under that section, or (where more than one is so given) each of them, contains a statement such as is mentioned in subsection (2)(a) of that section.

(4) Where the right to manage the premises is acquired by the company by virtue of a determination under section 84(5)(a), the acquisition date is the date three months after the determination becomes final.

(5) Where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 84, the acquisition date is the date three months after the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.

(6) Where an order is made under section 85, the acquisition date is (subject to any appeal) the date specified in the order.

Notices relating to management contracts

91

(1) Section 92 applies where—

(a) the right to manage premises is to be acquired by a RTM company (otherwise than by virtue of an order under section 85), and

(b) there are one or more existing management contracts relating to the premises.

(2) A management contract is a contract between—

(a) an existing manager of the premises (referred to in this Chapter as the “manager party”), and

(b) another person (so referred to as the “contractor party”),

under which the contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage.

(3) And in this Chapter “existing management contract” means a management contract which—

(a) is subsisting immediately before the determination date, or

(b) is entered into during the period beginning with the determination date and ending with the acquisition date.

(4) An existing manager of the premises is any person who is—

(a) landlord under a lease relating to the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises.

(5) In this Chapter “determination date” means—

(a) where there is no dispute about entitlement, the date specified in the claim notice under section 80(6),

(b) where the right to manage the premises is acquired by the company by virtue of a determination under section 84(5)(a), the date when the determination becomes final, and

(c) where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 84, the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.

Duties to give notice of contracts

92

(1) The person who is the manager party in relation to an existing management contract must give a notice in relation to the contract—

(a) to the person who is the contractor party in relation to the contract (a “contractor notice”), and

(b) to the RTM company (a “contract notice”).

(2) A contractor notice and a contract notice must be given—

(a) in the case of a contract subsisting immediately before the determination date, on that date or as soon after that date as is reasonably practicable, and

(b) in the case of a contract entered into during the period beginning with the determination date and ending with the acquisition date, on the date on which it is entered into or as soon after that date as is reasonably practicable.

(3) A contractor notice must—

(a) give details sufficient to identify the contract in relation to which it is given,

(b) state that the right to manage the premises is to be acquired by a RTM company,

(d) specify the acquisition date, and

(e) contain such other particulars (if any) as may be required to be contained in contractor notices by regulations made by the appropriate national authority,

and must also comply with such requirements (if any) about the form of contractor notices as may be prescribed by regulations so made.

(4) Where a person who receives a contractor notice (including one who receives a copy by virtue of this subsection) is party to an existing management sub-contract with another person (the “sub-contractor party”), the person who received the notice must—

(a) send a copy of the contractor notice to the sub-contractor party, and

(b) give to the RTM company a contract notice in relation to the existing management sub-contract.

(5) An existing management sub-contract is a contract under which the sub-contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage and which—

(a) is subsisting immediately before the determination date, or

(b) is entered into during the period beginning with the determination date and ending with the acquisition date.

(6) Subsection (4) must be complied with—

(a) in the case of a contract entered into before the contractor notice is received, on the date on which it is received or as soon after that date as is reasonably practicable, and

(b) in the case of a contract entered into after the contractor notice is received, on the date on which it is entered into or as soon after that date as is reasonably practicable.

(7) A contract notice must—

(a) give particulars of the contract in relation to which it is given and of the person who is the contractor party, or sub-contractor party, in relation to that contract, and

(b) contain such other particulars (if any) as may be required to be contained in contract notices by regulations made by the appropriate national authority,

and must also comply with such requirements (if any) about the form of contract notices as may be prescribed by such regulations so made.

Duty to provide information

93

(1) Where the right to manage premises is to be acquired by a RTM company, the company may give notice to a person who is—

(a) landlord under a lease of the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,

requiring him to provide the company with any information which is in his possession or control and which the company reasonably requires in connection with the exercise of the right to manage.

(2) Where the information is recorded in a document in his possession or control the notice may require him—

(a) to permit any person authorised to act on behalf of the company at any reasonable time to inspect the document (or, if the information is recorded in the document in a form in which it is not readily intelligible, to give any such person access to it in a readily intelligible form), and

(b) to supply the company with a copy of the document containing the information in a readily intelligible form.

(3) A notice may not require a person to do anything under this section before the acquisition date.

(4) But, subject to that, a person who is required by a notice to do anything under this section must do it within the period of 28 days beginning with the day on which the notice is given.

Duty to pay accrued uncommitted service charges

94

(1) Where the right to manage premises is to be acquired by a RTM company, a person who is—

(a) landlord under a lease of the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,

must make to the company a payment equal to the amount of any accrued uncommitted service charges held by him on the acquisition date.

(2) The amount of any accrued uncommitted service charges is the aggregate of—

(a) any sums which have been paid to the person by way of service charges in respect of the premises, and

(b) any investments which represent such sums (and any income which has accrued on them),

less so much (if any) of that amount as is required to meet the costs incurred before the acquisition date in connection with the matters for which the service charges were payable.

(3) He or the RTM company may make an application to the appropriate tribunal to determine the amount of any payment which falls to be made under this section.

(4) The duty imposed by this section must be complied with on the acquisition date or as soon after that date as is reasonably practicable.

Exercising right

Introductory

95

Sections 96 to 103 apply where the right to manage premises has been acquired by a RTM company (and has not ceased to be exercisable by it).

Management functions under leases

96

(1) This section and section 97 apply in relation to management functions relating to the whole or any part of the premises.

(2) Management functions which a person who is landlord under a lease of the whole or any part of the premises has under the lease are instead functions of the RTM company.

(3) And where a person is party to a lease of the whole or any part of the premises otherwise than as landlord or tenant, management functions of his under the lease are also instead functions of the RTM company.

(4) Accordingly, any provisions of the lease making provision about the relationship of—

(a) a person who is landlord under the lease, and

(b) a person who is party to the lease otherwise than as landlord or tenant,

in relation to such functions do not have effect.

(5) “Management functions” are functions with respect to services, repairs, maintenance, improvements, insurance and management.

(6) But this section does not apply in relation to—

(a) functions with respect to a matter concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant, or

(b) functions relating to re-entry or forfeiture.

(7) An order amending subsection (5) or (6) may be made by the appropriate national authority.

Management functions: supplementary

97

(1) Any obligation owed by the RTM company by virtue of section 96 to a tenant under a lease of the whole or any part of the premises is also owed to each person who is landlord under the lease.

(2) A person who is—

(a) landlord under a lease of the whole or any part of the premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,

is not entitled to do anything which the RTM company is required or empowered to do under the lease by virtue of section 96, except in accordance with an agreement made by him and the RTM company.

(3) But subsection (2) does not prevent any person from insuring the whole or any part of the premises at his own expense.

(4) So far as any function of a tenant under a lease of the whole or any part of the premises—

(a) relates to the exercise of any function under the lease which is a function of the RTM company by virtue of section 96, and

(b) is exercisable in relation to a person who is landlord under the lease or party to the lease otherwise than as landlord or tenant,

it is instead exercisable in relation to the RTM company.

(5) But subsection (4) does not require or permit the payment to the RTM company of so much of any service charges payable by a tenant under a lease of the whole or any part of the premises as is required to meet costs incurred before the right to manage was acquired by the RTM company in connection with matters for which the service charges are payable.

Functions relating to approvals

98

(1) This section and section 99 apply in relation to the grant of approvals under long leases of the whole or any part of the premises; but nothing in this section or section 99 applies in relation to an approval concerning only a part of the premises consisting of a flat or other unit not held under a lease by a qualifying tenant.

(2) Where a person who is—

(a) landlord under a long lease of the whole or any part of the premises, or

(b) party to such a lease otherwise than as landlord or tenant,

has functions in relation to the grant of approvals to a tenant under the lease, the functions are instead functions of the RTM company.

(3) Accordingly, any provisions of the lease making provision about the relationship of—

(a) a person who is landlord under the lease, and

(b) a person who is party to the lease otherwise than as landlord or tenant,

in relation to such functions do not have effect.

(4) The RTM company must not grant an approval by virtue of subsection (2) without having given—

(a) in the case of an approval relating to assignment, underletting, charging, parting with possession, the making of structural alterations or improvements or alterations of use, 30 days’ notice, or

(b) in any other case, 14 days’ notice,

to the person who is, or each of the persons who are, landlord under the lease.

(5) Regulations increasing the period of notice to be given under subsection (4)(b) in the case of any description of approval may be made by the appropriate national authority.

(6) So far as any function of a tenant under a long lease of the whole or any part of the premises—

(a) relates to the exercise of any function which is a function of the RTM company by virtue of this section, and

(b) is exercisable in relation to a person who is landlord under the lease or party to the lease otherwise than as landlord or tenant,

it is instead exercisable in relation to the RTM company.

(7) In this Chapter “approval” includes consent or licence and “approving” is to be construed accordingly; and an approval required to be obtained by virtue of a restriction entered on the register of title kept by the Chief Land Registrar is, so far as relating to a long lease of the whole or any part of any premises, to be treated for the purposes of this Chapter as an approval under the lease.

Approvals: supplementary

99

(1) If a person to whom notice is given under section 98(4) objects to the grant of the approval before the time when the RTM company would first be entitled to grant it, the RTM company may grant it only—

(a) in accordance with the written agreement of the person who objected, or

(b) in accordance with a determination of (or on an appeal from) the appropriate tribunal .

(2) An objection to the grant of the approval may not be made by a person unless he could withhold the approval if the function of granting it were exercisable by him (and not by the RTM company).

(3) And a person may not make an objection operating only if a condition or requirement is not satisfied unless he could grant the approval subject to the condition or requirement being satisfied if the function of granting it were so exercisable.

(4) An objection to the grant of the approval is made by giving notice of the objection (and of any condition or requirement which must be satisfied if it is not to operate) to—

(a) the RTM company, and

(b) the tenant,

and, if the approval is to a tenant approving an act of a sub-tenant, to the sub-tenant.

(5) An application to the appropriate tribunal for a determination under subsection (1)(b) may be made by—

(a) the RTM company,

(b) the tenant,

(d) any person who is landlord under the lease.

Enforcement of tenant covenants

100

(1) This section applies in relation to the enforcement of untransferred tenant covenants of a lease of the whole or any part of the premises.

(2) Untransferred tenant covenants are enforceable by the RTM company, as well as by any other person by whom they are enforceable apart from this section, in the same manner as they are enforceable by any other such person.

(3) But the RTM company may not exercise any function of re-entry or forfeiture.

(4) In this Chapter “tenant covenant”, in relation to a lease, means a covenant falling to be complied with by a tenant under the lease; and a tenant covenant is untransferred if, apart from this section, it would not be enforceable by the RTM company.

(5) Any power under a lease of a person who is—

(a) landlord under the lease, or

(b) party to the lease otherwise than as landlord or tenant,

to enter any part of the premises to determine whether a tenant is complying with any untransferred tenant covenant is exercisable by the RTM company (as well as by the landlord or party).

Tenant covenants: monitoring and reporting

101

(1) This section applies in relation to failures to comply with tenant covenants of leases of the whole or any part of the premises.

(2) The RTM company must—

(a) keep under review whether tenant covenants of leases of the whole or any part of the premises are being complied with, and

(b) report to any person who is landlord under such a lease any failure to comply with any tenant covenant of the lease.

(3) The report must be made before the end of the period of three months beginning with the day on which the failure to comply comes to the attention of the RTM company.

(4) But the RTM company need not report to a landlord a failure to comply with a tenant covenant if—

(a) the failure has been remedied,

(b) reasonable compensation has been paid in respect of the failure, or

(c) the landlord has notified the RTM company that it need not report to him failures of the description of the failure concerned.

Statutory functions

102

(1) Schedule 7 (provision for the operation of certain enactments with modifications) has effect.

(2) Other enactments relating to leases (including enactments contained in this Act or any Act passed after this Act) have effect with any such modifications as are prescribed by regulations made by the appropriate national authority.

Landlord contributions to service charges

103

(1) This section applies where—

(a) the premises contain at least one flat or other unit not subject to a lease held by a qualifying tenant (an “excluded unit”),

(b) the service charges payable under leases of flats contained in the premises which are so subject fall to be calculated as a proportion of the relevant costs, and

(c) the proportions of the relevant costs so payable, when aggregated, amount to less than the whole of the relevant costs.

(2) Where the premises contain only one excluded unit, the person who is the appropriate person in relation to the excluded unit must pay to the RTM company the difference between—

(a) the relevant costs, and

(b) the aggregate amount payable in respect of the relevant costs under leases of flats contained in the premises which are held by qualifying tenants.

(3) Where the premises contain more than one excluded unit, each person who is the appropriate person in relation to an excluded unit must pay to the RTM company the appropriate proportion of that difference.

(4) And the appropriate proportion in the case of each such person is the proportion of the internal floor area of all of the excluded units which is internal floor area of the excluded unit in relation to which he is the appropriate person.

(5) The appropriate person in relation to an excluded unit—

(a) if it is subject to a lease, is the landlord under the lease,

(b) if it is subject to more than one lease, is the immediate landlord under whichever of the leases is inferior to all the others, and

Supplementary

Registration

104

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cessation of management

105

(1) This section makes provision about the circumstances in which, after a RTM company has acquired the right to manage any premises, that right ceases to be exercisable by it.

(2) Provision may be made by an agreement made between—

(a) the RTM company, and

(b) each person who is landlord under a lease of the whole or any part of the premises,

for the right to manage the premises to cease to be exercisable by the RTM company.

(3) The right to manage the premises ceases to be exercisable by the RTM company if—

(a) a winding-up order . . . is made, or a resolution for voluntary winding-up is passed, with respect to the RTM company, or the RTM company enters administration,

(b) a receiver or a manager of the RTM company’s undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the RTM company comprised in or subject to the charge,

(c) a voluntary arrangement proposed in the case of the RTM company for the purposes of Part 1 of the Insolvency Act 1986 (c. 45) is approved under that Part of that Act, or

(d) the RTM company’s name is struck off the register under section 1000, 1001 or 1003 of the Companies Act 2006.

(4) The right to manage the premises ceases to be exercisable by the RTM company if a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, begins so to act or an order under that Part of that Act that the right to manage the premises is to cease to be exercisable by the RTM company takes effect.

(5) The right to manage the premises ceases to be exercisable by the RTM company if it ceases to be a RTM company in relation to the premises.

Agreements excluding or modifying right

106

Any agreement relating to a lease (whether contained in the instrument creating the lease or not and whether made before the creation of the lease or not) is void in so far as it—

(a) purports to exclude or modify the right of any person to be, or do any thing as, a member of a RTM company,

(b) provides for the termination or surrender of the lease if the tenant becomes, or does any thing as, a member of a RTM company or if a RTM company does any thing, or

(c) provides for the imposition of any penalty or disability if the tenant becomes, or does any thing as, a member of a RTM company or if a RTM company does any thing.

Enforcement of obligations

107

(1) The appropriate tribunal may, on the application of any person interested, make an order requiring a person who has failed to comply with a requirement imposed on him by, under or by virtue of any provision of this Chapter to make good the default within such time as is specified in the order.

(2) An application shall not be made under subsection (1) unless—

(a) a notice has been previously given to the person in question requiring him to make good the default, and

(b) more than 14 days have elapsed since the date of the giving of that notice without his having done so.

(3) Where an order other than an order to pay a sum of money has been made under subsection (1) by the appropriate tribunal—

(a) a person may apply to the county court for enforcement of the order;

(b) the appropriate tribunal may by order transfer proceedings to the county court for enforcement of the order;

and the order is to be enforceable by the court in the same way as an order of the court.

(4) See section 176C for general provision about the enforcement of tribunal decisions and section 27 of the Tribunals, Courts and Enforcement Act 2007 for provision about the enforcement of an order to pay a sum of money.

Application to Crown

108

(1) This Chapter applies in relation to premises in which there is a Crown interest.

(2) There is a Crown interest in premises if there is in the premises an interest or estate—

(a) which is comprised in the Crown Estate,

(b) which belongs to Her Majesty in right of the Duchy of Lancaster,

(d) which belongs to a government department or is held on behalf of Her Majesty for the purposes of a government department.

(3) Any sum payable under this Chapter to a RTM company by the Chancellor of the Duchy of Lancaster may be raised and paid under section 25 of the Duchy of Lancaster Act 1817 (c. 97) as an expense incurred in improvement of land belonging to Her Majesty in right of the Duchy.

(4) Any sum payable under this Chapter to a RTM company by the Duke of Cornwall (or any other possessor for the time being of the Duchy of Cornwall) may be raised and paid under section 8 of the Duchy of Cornwall Management Act 1863 (c. 49) as an expense incurred in permanently improving the possessions of the Duchy.

Powers of trustees in relation to right

109

(1) Where trustees are the qualifying tenant of a flat contained in any premises, their powers under the instrument regulating the trusts include power to be a member of a RTM company for the purpose of the acquisition and exercise of the right to manage the premises.

(2) But subsection (1) does not apply where the instrument regulating the trusts contains an explicit direction to the contrary.

(3) The power conferred by subsection (1) is exercisable with the same consent or on the same direction (if any) as may be required for the exercise of the trustees’ powers (or ordinary powers) of investment.

(4) The purposes—

(a) authorised for the application of capital money by section 73 of the Settled Land Act 1925 (c. 18), and

(b) authorised by section 71 of that Act as purposes for which moneys may be raised by mortgage,

include the payment of any expenses incurred by a tenant for life or statutory owner as a member of a RTM company.

Power to prescribe procedure

110

(1) Where a claim to acquire the right to manage any premises is made by the giving of a claim notice, except as otherwise provided by this Chapter—

(a) the procedure for giving effect to the claim notice, and

(b) the rights and obligations of all parties in any matter arising in giving effect to the claim notice,

shall be such as may be prescribed by regulations made by the appropriate national authority.

(2) Regulations under this section may, in particular, make provision for a person to be discharged from performing any obligations arising out of a claim notice by reason of the default or delay of some other person.

Notices

111

(1) Any notice under this Chapter—

(a) must be in writing, and

(b) may be sent by post.

(2) A company which is a RTM company in relation to premises may give a notice under this Chapter to a person who is landlord under a lease of the whole or any part of the premises at the address specified in subsection (3) (but subject to subsection (4)).

(3) That address is—

(a) the address last furnished to a member of the RTM company as the landlord’s address for service in accordance with section 48 of the 1987 Act (notification of address for service of notices on landlord), or

(b) if no such address has been so furnished, the address last furnished to such a member as the landlord’s address in accordance with section 47 of the 1987 Act (landlord’s name and address to be contained in demands for rent).

(4) But the RTM company may not give a notice under this Chapter to a person at the address specified in subsection (3) if it has been notified by him of a different address in England and Wales at which he wishes to be given any such notice.

(5) A company which is a RTM company in relation to premises may give a notice under this Chapter to a person who is the qualifying tenant of a flat contained in the premises at the flat unless it has been notified by the qualifying tenant of a different address in England and Wales at which he wishes to be given any such notice.

Interpretation

Definitions

112

(1) In this Chapter—

“appurtenant property”, in relation to a building or part of a building or a flat, means any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the building or part or flat,

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

“copy”, in relation to a document in which information is recorded, means anything onto which the information has been copied by whatever means and whether directly or indirectly,

“document” means anything in which information is recorded,

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling,

“flat” means a separate set of premises (whether or not on the same floor)—which forms part of a building,which is constructed or adapted for use for the purposes of a dwelling, andeither the whole or a material part of which lies above or below some other part of the building,

“relevant costs” has the meaning given by section 18 of the 1985 Act,

“service charge” has the meaning given by that section, and

“unit” means—a flat,any other separate set of premises which is constructed or adapted for use for the purposes of a dwelling, ora separate set of premises let, or intended for letting, on a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies.

(2) In this Chapter “lease” and “tenancy” have the same meaning and both expressions include (where the context permits)—

(a) a sub-lease or sub-tenancy, and

(b) an agreement for a lease or tenancy (or for a sub-lease or sub-tenancy),

but do not include a tenancy at will or at sufferance.

(3) The expressions “landlord” and “tenant”, and references to letting, to the grant of a lease or to covenants or the terms of a lease, shall be construed accordingly.

(4) In this Chapter any reference (however expressed) to the lease held by the qualifying tenant of a flat is a reference to a lease held by him under which the demised premises consist of or include the flat (whether with or without one or more other flats).

(5) Where two or more persons jointly constitute either the landlord or the tenant or qualifying tenant in relation to a lease of a flat, any reference in this Chapter to the landlord or to the tenant or qualifying tenant is (unless the context otherwise requires) a reference to both or all of the persons who jointly constitute the landlord or the tenant or qualifying tenant, as the case may require.

(6) In the case of a lease which derives (in accordance with section 77(5)) from two or more separate leases, any reference in this Chapter to the date of the commencement of the term for which the lease was granted shall, if the terms of the separate leases commenced at different dates, have effect as references to the date of the commencement of the term of the lease with the earliest date of commencement.

Index of defined expressions

113

In this Chapter the expressions listed below are defined by the provisions specified.

Chapter 2 — Collective enfranchisement by tenants of flats

Introductory

Amendments of right to collective enfranchisement

114

This Chapter amends the right to collective enfranchisement which is conferred by Chapter 1 of Part 1 of the 1993 Act.

Qualifying rules

Non-residential premises

115

In section 4(1) of the 1993 Act (right not to apply in case of premises having non-residential parts with floor area exceeding 10 per cent. of total), for “10 per cent.” substitute “ 25 per cent. ”.

Premises including railway track

116

In section 4 of the 1993 Act (premises in the case of which right does not apply), insert at the end—

(5) This Chapter does not apply to premises falling within section 3(1) if the freehold of the premises includes track of an operational railway; and for the purposes of this subsection— (a) “track” includes any land or other property comprising the permanent way of a railway (whether or not it is also used for other purposes) and includes any bridge, tunnel, culvert, retaining wall or other structure used for the support of, or otherwise in connection with, track, (b) “operational” means not disused, and (c) “railway” has the same meaning as in any provision of Part 1 of the Railways Act 1993 (c. 43) for the purposes of which that term is stated to have its wider meaning.

Qualifying leases

117

(1) In section 5(1) of the 1993 Act (which provides that a qualifying tenant is a tenant under a long lease which is at a low rent or for a particularly long term), omit “which is at a low rent or for a particularly long term”.

(2) In section 69(1)(b) of the 1993 Act (estate management schemes), for “by virtue of the amendments of that Chapter made by paragraph 3 of Schedule 9 to the Housing Act 1996 (c. 52)” substitute “ 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 ”.

Premises with resident landlord

118

(1) Section 10 of the 1993 Act (premises with a resident landlord) is amended as follows.

(2) For subsection (1) (requirements that premises not be or form part of purpose-built block of flats and that they have been occupied for at least twelve months as only or principal home of owner of freehold or a family member) substitute—

(1) For the purposes of this Chapter any premises falling within section 3(1) are premises with a resident landlord at any time if— (a) the premises are not, and do not form part of, a purpose-built block of flats; (b) the same person has owned the freehold of the premises since before the conversion of the premises into two or more flats or other units; and (c) he, or an adult member of his family, has occupied a flat or other unit contained in the premises as his only or principal home throughout the period of twelve months ending with that time.

(3) For subsection (4) (premises held on trust) substitute—

(4) Where the freehold of any premises is held on trust, subsection (1) applies as if— (a) the requirement in paragraph (b) were that the same person has had an interest under the trust (whether or not also a trustee) since before the conversion of the premises, and (b) paragraph (c) referred to him or an adult member of his family.

Proportion of tenants required to participate

119

In section 13(2)(b) of the 1993 Act (persons by whom initial notice must be given), omit sub-paragraph (i) (initial notice to be given by at least two-thirds of qualifying tenants of flats contained in premises).

Abolition of residence condition

120

In section 13(2) of the 1993 Act, omit the words following paragraph (b) (which require at least one-half of the qualifying tenants by whom the initial notice is given to satisfy the residence condition).

Exercise of right

Right exercisable only by RTE company

121

(1) Section 13 of the 1993 Act is amended as follows.

(2) In paragraph (b) of subsection (2), after “given by” insert “ a RTE company which has among its participating members ”.

(3) After that subsection insert—

(2ZA) But in a case where, at the relevant date, there are only two qualifying tenants of flats contained in the premises, subsection (2)(b) is not satisfied unless both are participating members of the RTE company.

RTE companies

122

After section 4 of the 1993 Act insert—

(4A) (1) A company is a RTE company in relation to premises if— (a) it is a private company limited by guarantee, and (b) its memorandum of association states that its object, or one of its objects, is the exercise of the right to collective enfranchisement with respect to the premises. (2) But a company is not a RTE company if it is a commonhold association (within the meaning of Part 1 of the Commonhold and Leasehold Reform Act 2002). (3) And a company is not a RTE company in relation to premises if another company which is a RTE company in relation to— (a) the premises, or (b) any premises containing or contained in the premises, has given a notice under section 13 with respect to the premises, or any premises containing or contained in the premises, and the notice continues in force in accordance with subsection (11) of that section. (4B) (1) Before the execution of a relevant conveyance to a company which is a RTE company in relation to any premises the following persons are entitled to be members of the company— (a) qualifying tenants of flats contained in the premises, and (b) if the company is also a RTM company which has acquired the right to manage the premises, landlords under leases of the whole or any part of the premises. (2) In this section— - “relevant conveyance” means a conveyance of the freehold of the premises or of any premises containing or contained in the premises; and - “RTM company” has the same meaning as in Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002. (3) On the execution of a relevant conveyance to the RTE company, any member of the company who is not a participating member ceases to be a member. (4) In this Chapter “participating member”, in relation to a RTE company, means a person who is a member by virtue of subsection (1)(a) of this section and who— (a) has given a participation notice to the company before the date when the company gives a notice under section 13 or during the participation period, or (b) is a participating member by virtue of either of the following two subsections. (5) A member who is the assignee of a lease by virtue of which a participating member was a qualifying tenant of his flat is a participating member if he has given a participation notice to the company within the period beginning with the date of the assignment and ending 28 days later (or, if earlier, on the execution of a relevant conveyance to the company). (6) And if the personal representatives of a participating member are a member, they are a participating member if they have given a participation notice to the company at any time (before the execution of a relevant conveyance to the company). (7) In this section “participation notice”, in relation to a member of the company, means a notice stating that he wishes to be a participating member. (8) For the purposes of this section a participation notice given to the company during the period— (a) beginning with the date when the company gives a notice under section 13, and (b) ending immediately before a binding contract is entered into in pursuance of the notice under section 13, is of no effect unless a copy of the participation notice has been given during that period to the person who (in accordance with section 9) is the reversioner in respect of the premises. (9) For the purposes of this section “the participation period” is the period beginning with the date when the company gives a notice under section 13 and ending— (a) six months, or such other time as the Secretary of State may by order specify, after that date, or (b) immediately before a binding contract is entered into in pursuance of the notice under section 13, whichever is the earlier. (10) In this section references to assignment include an assent by personal representatives, and assignment by operation of law where the assignment is to a trustee in bankruptcy or to a mortgagee under section 89(2) of the Law of Property Act 1925 (c. 20) (foreclosure of leasehold mortgage); and references to an assignee shall be construed accordingly. (4C) (1) The Secretary of State shall by regulations make provision about the content and form of the memorandum of association and articles of association of RTE companies. (2) A RTE company may adopt provisions of the regulations for its memorandum or articles. (3) The regulations may include provision which is to have effect for a RTE company whether or not it is adopted by the company. (4) A provision of the memorandum or articles of a RTE company has no effect to the extent that it is inconsistent with the regulations. (5) The regulations have effect in relation to a memorandum or articles— (a) irrespective of the date of the memorandum or articles, but (b) subject to any transitional provisions of the regulations. (6) The following provisions of the Companies Act 1985 (c. 6) do not apply to a RTE company— (a) sections 2(7) and 3 (memorandum), and (b) section 8 (articles).

Invitation to participate

123

(1) After section 12 of the 1993 Act insert—

(12A) (1) Before making a claim to exercise the right to collective enfranchisement with respect to any premises, a RTE company must give notice to each person who at the time when the notice is given— (a) is the qualifying tenant of a flat contained in the premises, but (b) neither is nor has agreed to become a participating member of the RTE company. (2) A notice given under this section (a “notice of invitation to participate”) must— (a) state that the RTE company intends to exercise the right to collective enfranchisement with respect to the premises, (b) state the names of the participating members of the RTE company, (c) explain the rights and obligations of the members of the RTE company with respect to the exercise of the right (including their rights and obligations in relation to meeting the price payable in respect of the freehold, and any other interests to be acquired in pursuance of this Chapter, and associated costs), (d) include an estimate of that price and those costs, and (e) invite the recipients of the notice to become participating members of the RTE company. (3) A notice of invitation to participate must either— (a) be accompanied by a copy of the memorandum of association and articles of association of the RTE company, or (b) include a statement about inspection and copying of the memorandum of association and articles of association of the RTE company. (4) A statement under subsection (3)(b) must— (a) specify a place (in England or Wales) at which the memorandum of association and articles of association may be inspected, (b) specify as the times at which they may be inspected periods of at least two hours on each of at least three days (including a Saturday or Sunday or both) within the seven days beginning with the day following that on which the notice is given, (c) specify a place (in England or Wales) at which, at any time within those seven days, a copy of the memorandum of association and articles of association may be ordered, and (d) specify a fee for the provision of an ordered copy, not exceeding the reasonable cost of providing it. (5) Where a notice given to a person includes a statement under subsection (3)(b), the notice is to be treated as not having been given to him if he is not allowed to undertake an inspection, or is not provided with a copy, in accordance with the statement. (6) A notice of invitation to participate shall not be invalidated by any inaccuracy in any of the particulars required by or by virtue of this section.

(2) In section 13 of the 1993 Act, after subsection (2ZA) (inserted by section 121(3)) insert—

(2ZB) The initial notice may not be given unless each person required to be given a notice of invitation to participate has been given such a notice at least 14 days before.

Consequential amendments

124

Schedule 8 (amendments consequential on sections 121 to 123) has effect.

Right of access

125

(1) In subsection (1) of section 17 of the 1993 Act (access by reversioner or other relevant landlord for purposes of valuation), insert at the end “ or if it is reasonable in connection with any other matter arising out of the claim to exercise the right to collective enfranchisement ”.

(2) For the sidenote of that section substitute “Rights of access.”

Purchase price

Valuation date

126

(1) In Schedule 6 to the 1993 Act (purchase price payable), for “the valuation date” (in each place) substitute “ the relevant date ”.

(2) In section 18(1) of the 1993 Act (duty to disclose existence of agreements affecting premises etc.), for “valuation date for the purposes of Schedule 6” substitute “ time when a binding contract is entered into in pursuance of the initial notice ”.

127

In paragraph 4(1) of Schedule 6 to the 1993 Act (freeholder’s share of marriage value), for the words after “freeholder’s share of the marriage value is” substitute “ 50 per cent. of that amount ”.

Disregard of marriage value in case of very long leases

128

(1) Paragraph 4 of Schedule 6 to the 1993 Act is amended as follows.

(2) In sub-paragraph (2) (meaning of marriage value), insert at the beginning “ Subject to sub-paragraph (2A), ”.

(3) After that sub-paragraph insert—

(2A) Where at the relevant date the unexpired term of the lease held by any of those participating members exceeds eighty years, any increase in the value of the freehold or any intermediate leasehold interest in the specified premises which is attributable to his potential ability to have a new lease granted to him as mentioned in sub-paragraph (2)(a) is to be ignored.

Chapter 3 — New leases for tenants of flats

Introductory

Amendments of right to acquire new lease

129

This Chapter amends the right of tenants of flats to acquire new leases which is conferred by Chapter 2 of Part 1 of the 1993 Act.

Qualifying rules

Replacement of residence test

130

(1) Section 39 of the 1993 Act (the right) is amended as follows.

(2) In subsection (2)(a) (requirement that tenant is qualifying tenant of flat on the relevant date), for “is” substitute “ has for the last two years been ”.

(3) Omit subsections (2)(b), (2A) and (2B) (requirement that tenant has occupied flat as only or principal home for three years).

Qualifying leases

131

In section 39(3) of the 1993 Act (which applies for the purposes of Chapter 2 of Part 1 of the 1993 Act the definition of qualifying tenant in Chapter 1 of that Part), omit paragraphs (c) and (d) (leases at a low rent and leases for a particularly long term).

Personal representatives

132

(1) In section 39 of the 1993 Act, after subsection (3) insert—

(3A) On the death of a person who has for the two years before his death been a qualifying tenant of a flat, the right conferred by this Chapter is exercisable, subject to and in accordance with this Chapter, by his personal representatives; and, accordingly, in such a case references in this Chapter to the tenant shall, in so far as the context permits, be to the personal representatives.

(2) In section 42 of the 1993 Act (notice by qualifying tenant of claim to exercise right), before subsection (5) insert—

(4A) A notice under this section may not be given by the personal representatives of a tenant later than two years after the grant of probate or letters of administration.

Crown leases

133

In section 94 of the 1993 Act (Crown land), for subsection (2) substitute—

(2) Chapter 2 applies as against a landlord under a lease from the Crown if— (a) a sub-tenant is seeking a new lease under that Chapter and the landlord, or a superior landlord under a lease from the Crown, is entitled to grant such a new lease without the concurrence of the appropriate authority, or (b) the appropriate authority notifies the landlord that, as regards any Crown interest affected, it will grant or concur in granting such a new lease.

Purchase price

Valuation date

134

In Schedule 13 to the 1993 Act (premium and other amounts payable by tenant on grant of new lease), for “the valuation date” (in each place) substitute “ the relevant date ”.

135

In paragraph 4(1) of Schedule 13 to the 1993 Act (landlord’s share of marriage value), for the words after “landlord’s share of the marriage value is” substitute “ 50 per cent. of that amount ”.

Disregard of marriage value in case of very long leases

136

(1) Paragraph 4 of Schedule 13 to the 1993 Act (meaning of marriage value) is amended as follows.

(2) In sub-paragraph (2), insert at the beginning “ Subject to sub-paragraph (2A), ”.

(3) After that sub-paragraph insert—

(2A) Where at the relevant date the unexpired term of the tenant’s existing lease exceeds eighty years, the marriage value shall be taken to be nil.

Chapter 4 — Leasehold houses

Introductory

Amendments of 1967 Act

137

This Chapter amends the Leasehold Reform Act 1967 (c. 88) (referred to in this Part as “the 1967 Act”).

Qualifying rules

Abolition of residence test

138

(1) In subsection (1) of section 1 of the 1967 Act (tenants of houses entitled to enfranchisement or extension), omit—

(a) “, occupying the house as his residence,” and

(b) “, and occupying it as his residence,”.

(2) After that subsection insert—

(1ZA) Where a house is for the time being let under two or more tenancies, a tenant under any of those tenancies which is superior to that held by any tenant on whom this Part of this Act confers a right does not have any right under this Part of this Act. (1ZB) Where a flat forming part of a house is let to a person who is a qualifying tenant of the flat for the purposes of Chapter 1 or 2 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28), a tenant of the house does not have any right under this Part of this Act unless, at the relevant time, he has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes)— (a) for the last two years; or (b) for periods amounting to two years in the last ten years.

(3) In subsection (3) of that section (exception where house is let to and occupied by tenant with other land or premises to which it is ancillary), for “occupation of it as his residence (but shall apply as if he were not so occupying it)” substitute “ being a tenant of it ”.

(4) In section 2(4) of the 1967 Act (premises previously let with house), for “occupied and used as mentioned in subsection (3) above” substitute “ subject to a tenancy vested in him ”.

(5) In section 6(1) of the 1967 Act (rights in case of trusts), for the words from the beginning to “right of the tenancy” substitute “ A tenant of a house shall for purposes of this Part of this Act be treated as having been a tenant of it at any earlier time ”.

(6) In section 7(3) and (4) of the 1967 Act (rights of members of family succeeding to tenancy on death), for “with him” substitute “ in the house ”.

Reduction of qualifying period as tenant etc

139

(1) In subsection (1)(b) of section 1 of the 1967 Act (requirement that person claiming entitlement to enfranchisement or extension has been tenant of house for last three years or for periods amounting to three years in last ten), for “three years or for periods amounting to three years in the last ten years” substitute “ two years ”.

(2) After subsection (1A) of that section insert—

(1B) This Part of this Act shall not have effect to confer any right on the tenant of a house under a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies unless, at the relevant time, the tenant has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes)— (a) for the last two years; or (b) for periods amounting to two years in the last ten years.

(3) In—

(a) section 9(3)(b) of the 1967 Act (no new notice for three years after withdrawal), and

(b) section 23(2)(b) of the 1967 Act (agreements excluding or restricting for period not exceeding three years right to give further notice),

for “three years” substitute “ twelve months ”.

Exclusion of certain business tenancies

140

After subsection (1ZB) of section 1 of the 1967 Act (inserted by section 138(2)) insert—

(1ZC) The references in subsection (1)(a) and (b) to a long tenancy do not include a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (business tenancies) applies unless— (a) it is granted for a term of years certain exceeding thirty-five years, whether or not it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise, (b) it is for a term fixed by law under a grant with a covenant or obligation for perpetual renewal, unless it is a tenancy by sub-demise from one which is not a tenancy which falls within any of the paragraphs in this subsection, (c) it is a tenancy taking effect under section 149(6) of the Law of Property Act 1925 (c. 20) (leases terminable after a death or marriage), or (d) it is a tenancy which— (i) is or has been granted for a term of years certain not exceeding thirty-five years, but with a covenant or obligation for renewal without payment of a premium (but not for perpetual renewal), and (ii) is or has been once or more renewed so as to bring to more than thirty-five years the total of the terms granted (including any interval between the end of a tenancy and the grant of a renewal). (1ZD) Where this Part of this Act applies as if there were a single tenancy of property comprised in two or more separate tenancies, then, if each of the separate tenancies falls within any of the paragraphs of subsection (1ZC) above, that subsection shall apply as if the single tenancy did so.

Tenancies not at low rent

141

(1) Section 1AA of the 1967 Act (additional right to enfranchisement where tenancy of house not at low rent) is amended as follows.

(2) Omit—

(a) in subsection (1)(b), “falls within subsection (2) below and”, and

(b) subsection (2) (tenancies for more than 35 years etc.).

(3) In subsection (3) (exceptions)—

(a) in paragraph (b), for “the coming into force of section 106 of the Housing Act 1996 (c. 52)” substitute “ 1st April 1997 (the date on which section 106 of the Housing Act 1996 came into force) ”, and

(b) for paragraph (c) substitute—

(c) the tenancy either— (i) was granted on or before that date, or (ii) was granted after that date, but on or before the coming into force of section 141 of the Commonhold and Leasehold Reform Act 2002, for a term of years certain not exceeding thirty-five years.

Personal representatives

142

(1) After section 6 of the 1967 Act insert—

(6A) (1) Where a tenant of a house dies and, immediately before his death, he had under this Part of this Act— (a) the right to acquire the freehold, or (b) the right to an extended lease, the right is exercisable by his personal representatives while the tenancy is vested in them (but subject to subsection (2) below); and, accordingly, in such a case references in this Part of this Act to the tenant shall, in so far as the context permits, be to the personal representatives. (2) The personal representatives of a tenant may not give notice of their desire to have the freehold or an extended lease by virtue of subsection (1) above later than two years after the grant of probate or letters of administration.

(2) In paragraph 6(2) of Schedule 3 (particulars to be contained in notice), after “6” (in both places) insert “ , 6A ”.

Abolition of limits on rights after lease extension

143

(1) In section 16 of the 1967 Act (limits on rights after extension of lease), omit—

(a) subsection (1)(a) (no right for tenant under extended tenancy to acquire freehold after end of original lease), and

(b) in subsection (4) (no right to freehold or extended lease in case of tenancy created by sub-demise under extended tenancy), the words “the freehold or”.

(2) For subsection (1B) of that section (extended tenancy not an assured tenancy or assured agricultural occupancy or a tenancy to which Schedule 10 to the Local Government and Housing Act 1989 (c. 42) applies) substitute—

(1B) Schedule 10 to the Local Government and Housing Act 1989 applies to every tenancy extended under section 14 above (whether or not it is for the purposes of that Schedule a long tenancy at a low rent as respects which the qualifying condition is fulfilled).

(3) Paragraph (a) of subsection (1) and subsection (2) apply whether the tenancy in question is extended before or after the coming into force of that paragraph or subsection; and paragraph (b) of subsection (1) applies whether the lease by sub-demise in question is created before or after the coming into force of that paragraph.

(4) In section 9 of the 1967 Act (purchase price), after subsection (1A) insert—

(1AA) Where, in a case in which the price payable for a house and premises is to be determined in accordance with subsection (1A) above, the tenancy has been extended under this Part of this Act— (a) if the relevant time is on or before the original term date, the assumptions set out in that subsection apply as if the tenancy is to terminate on the original term date; and (b) if the relevant time is after the original term date, the assumptions set out in paragraphs (a), (c) and (e) of that subsection apply as if the tenancy had terminated on the original term date and the assumption set out in paragraph (b) of that subsection applies as if the words “at the end of the tenancy” were omitted.

Exclusion of shared ownership leases

144

(1) Schedule 4A to the 1967 Act (exclusion of certain shared ownership leases) is amended as follows.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In paragraph 3(2)(d) (conditions to be satisfied for exclusion of lease granted by a housing association), omit “assign,”.

Purchase price

145

(1) Section 9 of the 1967 Act (purchase price etc.) is amended as follows.

(2) In subsection (1C) (purchase price payable where the right to acquire freehold arises by virtue of section 1A, 1AA or 1B), omit paragraph (a) (tenant’s share of marriage value not to exceed one-half).

(3) After that subsection insert—

(1D) Where, in determining the price payable for a house and premises in accordance with this section, 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 be one-half of it.

Disregard of marriage value in case of very long leases

146

In section 9 of the 1967 Act (purchase price etc.), after subsection (1D) (inserted by section 145) insert—

(1E) But where at the relevant time the unexpired term of the tenant’s tenancy exceeds eighty years, the marriage value shall be taken to be nil.

Purchase price for enfranchisement during lease extension

147

(1) In section 9 of the 1967 Act (purchase price on enfranchisement), in subsection (1C) (cases where price is to be determined in accordance with subsection (1A)), after “1B above” insert “ , or where the tenancy of the house and premises has been extended under section 14 below and the notice under section 8(1) above was given (whether by the tenant or a sub-tenant) after the original term date of the tenancy, ”.

(2) In section 9A(1) of the 1967 Act (compensation payable in certain cases), after “1B above” insert “ or where the tenancy of the house and premises has been extended under section 14 below and the notice under section 8(1) above was given (whether by the tenant or a sub-tenant) after the original term date of the tenancy ”.

Absent landlords

Applications to be to county court

148

(1) Section 27 of the 1967 Act (enfranchisement where landlord cannot be found) is amended as follows.

(2) In subsection (1)—

(a) for “the High Court” (in both places), and

(b) for “the Court”,

substitute “ the court ”.

(3) In subsection (2)—

(a) for “the High Court” (in each place), and

(b) for “the Court” (in both places),

substitute “ the court ”.

(4) In subsection (3)—

(a) for “the Supreme Court”, and

(b) for “High Court” (in both places),

substitute “ court ”.

(5) In subsection (4), for “High Court” substitute “ court ”.

(6) In subsection (6), for “the Supreme Court” substitute “ court ”.

(7) In subsection (7)—

(a) for “the High Court” (in both places), and

(b) for “the Court”,

substitute “ the court ”.

Valuation by leasehold valuation tribunal

149

(1) In section 27 of the 1967 Act (enfranchisement where landlord cannot be found), for subsection (5) substitute—

(5) The appropriate sum which, in accordance with subsection (3) above, is to be paid into court is the aggregate of— (a) such amount as may be determined by (or on appeal from) a leasehold valuation tribunal to be the price payable in accordance with section 9 above; and (b) the amount or estimated amount (as so determined) of any pecuniary rent payable for the house and premises up to the date of the conveyance which remains unpaid.

(2) In section 21(1) of the 1967 Act (jurisdiction of leasehold valuation tribunals), after paragraph (c) insert—

(cza) the amount of the appropriate sum to be paid into court under section 27(5);

Chapter 5 — Other provisions about leases

Service charges, administration charges etc.

Extending meaning of service charge and management etc

150

Schedule 9 (which amends certain provisions about management of, and service charges in respect of, leasehold properties and confers power further to amend certain of those provisions) has effect.

Consultation about service charges

151

For section 20 of the 1985 Act (limitation of service charges: estimates and consultation) substitute—

(20) (1) Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are limited in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either— (a) complied with in relation to the works or agreement, or (b) dispensed with in relation to the works or agreement by (or on appeal from) a leasehold valuation tribunal. (2) In this section “relevant contribution”, in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his lease to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works or under the agreement. (3) This section applies to qualifying works if relevant costs incurred on carrying out the works exceed an appropriate amount. (4) The Secretary of State may by regulations provide that this section applies to a qualifying long term agreement— (a) if relevant costs incurred under the agreement exceed an appropriate amount, or (b) if relevant costs incurred under the agreement during a period prescribed by the regulations exceed an appropriate amount. (5) An appropriate amount is an amount set by regulations made by the Secretary of State; and the regulations may make provision for either or both of the following to be an appropriate amount— (a) an amount prescribed by, or determined in accordance with, the regulations, and (b) an amount which results in the relevant contribution of any one or more tenants being an amount prescribed by, or determined in accordance with, the regulations. (6) Where an appropriate amount is set by virtue of paragraph (a) of subsection (5), the amount of the relevant costs incurred on carrying out the works or under the agreement which may be taken into account in determining the relevant contributions of tenants is limited to the appropriate amount. (7) Where an appropriate amount is set by virtue of paragraph (b) of that subsection, the amount of the relevant contribution of the tenant, or each of the tenants, whose relevant contribution would otherwise exceed the amount prescribed by, or determined in accordance with, the regulations is limited to the amount so prescribed or determined. (20ZA) (1) Where an application is made to a leasehold valuation tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works or qualifying long term agreement, the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements. (2) In section 20 and this section— - “qualifying works” means works on a building or any other premises, and - “qualifying long term agreement” means (subject to subsection (3)) an agreement entered into, by or on behalf of the landlord or a superior landlord, for a term of more than twelve months. (3) The Secretary of State may by regulations provide that an agreement is not a qualifying long term agreement— (a) if it is an agreement of a description prescribed by the regulations, or (b) in any circumstances so prescribed. (4) In section 20 and this section “the consultation requirements” means requirements prescribed by regulations made by the Secretary of State. (5) Regulations under subsection (4) may in particular include provision requiring the landlord— (a) to provide details of proposed works or agreements to tenants or the recognised tenants’ association representing them, (b) to obtain estimates for proposed works or agreements, (c) to invite tenants or the recognised tenants’ association to propose the names of persons from whom the landlord should try to obtain other estimates, (d) to have regard to observations made by tenants or the recognised tenants’ association in relation to proposed works or agreements and estimates, and (e) to give reasons in prescribed circumstances for carrying out works or entering into agreements. (6) Regulations under section 20 or this section— (a) may make provision generally or only in relation to specific cases, and (b) may make different provision for different purposes. (7) Regulations under section 20 or this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Statements of account

152

For section 21 of the 1985 Act (request for summary of relevant costs) substitute—

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