The Islington Leaseholders Action Group (Ilag) is to challenge the charge for a leaseholders’ association at the Leasehold Valuation Tribunal.
A date for the hearing at the LVT has been set for 26 November, 2007.
ILAG is now supported in its application by two legal opinions. These are: Mr Anthony Essien, chief executive, the Leasehold Advisory Service, the foremost legal advice service on leasehold matters in the UK; and Mr Francis Davey, a barrister specialising in leasehold matters having written the book “Leasehold Disputes”. In addition, a Ms Ellodie Gibbons, a barrister with Tanfield Chambers who is also a Partners leaseholder, told ILAG by email that having read her lease she is not intending to pay the charge. She has also written to Partners challenging it.
Homes for Islington has already begun charging each leaseholder £20 a year on their annual service charge bill to fund an organisation which will have revenues of over £200,000.
ILAG has asked Islington Legal Services to disclose counsel’s opinion which supports its view that such a charge is legal. It has refused to do so.
Homes for Islington maintains that the ballot held earlier this year plus the provision of a service level agreement for the new organisation has given it authority to go ahead.
For its part, ILAG has received legal advice from Lease and Mr Davey. This advice is set out below. Mr Essien at Lease reviewed several variants of Islington Council’s leases – there are thought to be up to 16 in all. It is their opinion that such a charge is illegal.
The lease must be restrictively interpreted. There is no provision in it for such a charge to be made and that it one were made it would be unenforceable and unpayable.
The legal advice ILAG has received is also of the opinion that the organisation of a ballot and the provision of a service level agreement is irrelevant. These procedures cannot legitimise an illegal charge.
Mr Owen Hart, a member of ILAG, who has submitted the LVT application, commented:
“Every one who makes application to an LVT knows that the lease is the most important document in the bundle. It’s the first thing that the tribunal reviews.
“The legal opinion we have received is clear. The lease must be restrictively interpreted, it does not make provision for a charge to fund an ILA.Why haven’t officers asked these questions.
“More importantly, why hasn’t Mr Potter and his chums, who plan to run a service offering legal advice to leaseholders, also asked these questions.
They are apparently incapable of reading their own leases properly let alone offering legal advice to anyone.”
UPDATE ONE: 24 October, 2007. The following email was received from Mr Francis Davey, a barrister who has written a book on leasehold disputes.
“Hi.
“That’s an interesting story.
“I have looked at many examples of leases written by Islington and I would find it difficult to believe that a charge for a leaseholders’ association could be made.
“Good luck. I think you have a good case.”
Mr Davey has since provided ILAG with an advice note on the charge which states that it will be unpayable.
UPDATE TWO: 30 October, 2007. The following email was received from Ms Ellodie Gibbons, a barrister with Tanfield Chambers specialising in Landlord and Tenant Law, who is regarded as a leading advocate in her field. She is also a Partners’ leaseholder.
“Having read my lease, I am not at present intending to pay any levy towards a leaseholders’ association”.
UPDATE THREE: A specimen lease was submitted to Mr Anthony Essien, who then the principal legal adviser, with the Leasehold Advisory Service (Lease), the best source of legal advice on leasehold matters in the UK, for comment. Your lease will be similar if not identical. (Mr Essien is now the chief executive of Lease)
Like all lawyers, he takes an awfully long time to say not very much and then in such a way that if you weren’t awake you just might believe he was telling you the exact opposite of what he was really saying.
Does that make sense? Not really. Here are the fun bits. The best bit is his conclusion in the final paragraph.
“You will note the referral, at sub-clause (2), to the Third Schedule. The detail of the items forming the charges are set out there and, pursuant to clause 5(2)(f), the same Schedule is used to determine the proportion of the costs and expenses you pay.
The general headings in the Third Schedule are: 1. Part 1 the “Building Element”; 2. Part 2 the “Estate Element”; 3. Part 3 the “Management Element”. There is no explicit provision for the costs of a borough-wide leaseholder’s association in any of Parts 1 , 2 or 3 of the Third Schedule.
The scheme of this lease limits the costs to the Building and the Estate. The Building is defined at paragraph 4 of the Particulars as XXX … The “Estate” is defined in paragraph 5 of the Particulars as XXX …
These charges are plainly limited to the Building and/or the Estate, even then the lease makes no clear provision for an Estate or for building-by-building leaseholder associations.
Thus, in the light of its words and, as far as I am aware, the circumstances when the lease was granted, there is no ability for the service charge to include the costs of a borough-wide association”.
“Q Bloody E D” (Editor’s note)
Written by Norbert Stiles
