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Banana Bread and Dogs Chasing Cars

Tuesday September 1, 2020

The law of unforeseen consequences has been hard at work during the Covid-19 crisis with locked-down people discovering talents they never imagined they possessed. Plaster and some building materials are in short supply due to a rush of DIY activity, some unlikely social media stars have emerged and enough banana bread has been made to feed a sizable army.

Interesting times too in the property sector. On the commercial side, some tough rent negotiations are ongoing and there is an anticipation of voids in the leisure, entertainment and hospitality sectors as small businesses are forced to close their doors. Office accommodation is one to watch as businesses discover some workers are happier and more productive working from home.

Empty offices can now be converted to residential premises without the need for planning permission by applying for Permitted Development Rights (PDR). This is a great idea on paper, providing an easy route to convert empty offices into much needed inner-city accommodation. Unfortunately, unscrupulous landlords have used PDR to create tiny living spaces, often with no windows or natural ventilation. These properties have been referred to as ‘the slums of the future’ and it remains to be seen if there is will on the part of Government to regulate PDRs.

Our block management division has had an interesting time of it with a flood of instructions from owners of blocks of flats. There seem to be two factors in play here. First, a number of large block management companies have simply run up the shutters since the beginning of lockdown. Phones and emails go unanswered, maintenance is neglected yet leaseholders are still expected to pay a management fee. 

Second, people with time on their hands can research precisely what it is they are getting for that fee, then how easy it is to take back control of their block management. This latter is relatively easy by enacting Right to Manage legislation. But for leaseholders, it can be a bit like a dog chasing a car. When he caches it, what is he going to do with it?

Block management is a complicated business for leaseholders. Each leaseholder needs to have a share in the limited company setup to manage the block. The lease is governed by Landlord and Tenant law, the limited company by Company Law. While these two systems run roughly in parallel, there are grey areas and here be dragons.

In a recent example, a leaseholder demanded from us personal details on all other leaseholders in the block. We thought this an unreasonable request so the matter ended up in the High Court. We won. The same leaseholder brought the same action in another block in Greater Manchester. He won.

In both cases barristers put the case for either side and the learned judges reached a decision. Or rather, they reached two different decisions on the same set of facts. If the legal experts cannot agree on an interpretation, what chance has the layman? Hence our rush of instructions and a halt to banana bread production.

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