No sheriff but plenty of Robin Hoods?
You may have noticed the number of times ‘criminal offence’ appears against things a landlord or his agent should do? Simple things like providing copies of insurance, or summaries of accounts?
Perhaps you bought your leasehold assuming you would have effective protection under law for your legal rights? After all, most consumers do not have to traipse off to court at personal expense for every basic element of their day to day relationship with a service provider.
Imagine if your bank failed to provide statements year after year? Or your gas supplier never sent your record of consumption, just charged? There would be uproar in Parliament. Matt Allwright would be on his bike in a flash. (Why is there no Matt Allwright doorstepping leasehold managing agents?)
Why do most non-leasehold organisations conform to norms and laws? Some don’t, obviously. But most do. Is it something to do with integrity? Or perhaps because they know their contract is not a trapped monopoly? Nothing like having the ability to block the ‘customer’ selling up if they make a fuss: think delayed LPE1 form and accusations of breach that can arise.
All that you can say with any confidence is that the leasehold caper seems to have no problem ignoring leasehold law.
On an industrial scale.
Perhaps it is because the various criminal offences that arise under landlord and tenant acts must be prosecuted by local authorities?
LAs seem historically reluctant to act. It is a power not a duty. Worse, in other circumstances a distraught citizen might pursue a civil remedy instead – an injunction – but leasehold courts have decided that lessees cannot do this as it would, apparently, be unfair on the freeholder. Whether or not the local authority refuses to act.
That would seem to leave somewhat obscure breach of contract law just to get your annual accounts!
In Morshead Mansions Ltd and Mr Di Marco, A3/2013/1718  EWCA Civ 96, a leaseholder sought remedy all the way to the Court of Appeal for allegedly rather modest rights:-
Summaries of accounts to be issued for certain years
s22 facility to inspect accounts receipts and other documents
The Court of Appeal considered the “statutory landscape” and picked out certain facts:
“The regulation of residential service charges has not been a legislative backwater.” … “The Landlord and Tenant Act 1985 … quite clearly create obligations that have consequences in the civil law” … “we see in this legislation express provision enabling the court to make a mandatory order of the kind that the tenant seeks in our case.” … “Sections 21 and 22 of the Act, by contrast, carry no explicit consequences for the parties’ civil rights or obligations.“
That sounds positive. The CoA went on:
“It is well settled that the question whether legislation which makes the doing or omitting to do a particular act a criminal offence renders the person guilty of that offence liable also in a civil action for damages at the suit of any person who thereby suffers loss or damage is a question of construction...”
Did they obey the law or not, I’m guessing you mean?
“…sections 21 and 22 (or their predecessors) have been on the statute book for over thirty years, and apart from increases in the maximum fine from time to time, no change of substance has ever been made to them. Third, during that same period Parliament has made many changes to the overall statutory regime for the regulation of residential service charges, so it cannot be said that the topic has been neglected.”
That depends on what laws have been passed, surely?
...”it is plain that a failure to comply with sections 21 or 22 will not cause personal injury or damage to property. It is difficult to see what claim for economic loss could arise…”
But wait a mo’, if the leaseholder can’t get the paperwork, they might be facing unscrupulous charges which they can’t challenge without seeing the paperwork. Is that not a loss or damage? Nobody else outside leasehold gets to fire invoices for thousands of pounds at home ‘owners’ without paperwork to back it up.
To a layperson leaseholder, this case could begin to read like the Court of Appeal constraining rights arising under s21 and s22 (similar to the “proof of prejudice” concept that was suddenly introduced over s20 consultation rights. No mention of ‘proof of prejudice’ in the original act).
A lengthy discussion followed on a “conundrum“. The CoA then dropped the hammer:
“…where Parliament has provided that the maximum punishment for the offence is a fine not exceeding level 4 on the standard scale it is unlikely that Parliament also intended the landlord (and its directors) to be potentially liable, at the suit of a private individual, to a fine of an unlimited amount or, in an extreme case, up to two years imprisonment as a sanction for failing to comply with an injunction.”
To layman thoughts. Any said liability would be for contempt of the injunction, i.e. persisting in the original criminal offence in defiance of a court. Why would Parliament go to the length of creating a criminal offence for a failing of a landlord but not wish the same landlord to face a civil injunction for failing to act? The point of an injunction is, I assume, that it must be obeyed or be in contempt of court. Sweet and effective.
To a layperson leaseholder, the criminal offences protecting them might seem like window-dressing. Maybe nobody really expects a prosecuting authority to enforce them? But they can be mentioned in debates: “Leaseholders have plenty of rights, look at the law.”
The accumulation of case law judgments such as above perhaps assures the leasehold industry be confident the criminal sanctions are toothless?
Meanwhile, management codes of practice are merely advisory and expressly stated to be so.
What is left?
In practice leaseholders have few effective rights. Even asking the Court of Appeal for help to receive a few receipts is not an available remedy.
The codes should be enforceable as ‘musts’. The criminal offences should be backed by rights of civil injunction.
Then we might start seeing integrity in leasehold management. Hell, it would be good to get transparent bills and accounts, integrity could come later.