What can you do if you are unhappy or dissatisfied with the terms of a lease? You could be the leaseholder or the landlord under the lease. It is not uncommon for one or more parties to a lease to want to vary the terms. There are situations where leases can be varied amicably where everyone is in agreement. What happens if you cannot reach a unanimous agreement? The Landlord and Tenant Act 1987 (1987 Act) provides some rules regarding variations to long residential leases. This will usually apply to leases which were more than 21 years when they were first granted. However, as the recent Upper Tribunal (UT) case below suggests it is certainly not an easy task.
Triplerose Ltd v Stride (2019) UKUT 99 (LC)
Triplerose Ltd owned the basement flat of a building in North London. There were four flats in total. The freeholder had an obligation under all the leases for repair and maintenance of the structure of the building and the employment of staff to assist the freeholder in performing these obligations under the leases. This freeholder obligation was present in all the leases, yet leases to only three of the flats included an obligation to pay a service charge in relation to the repair, maintenance and employment of staff by the freeholder. The basement flat did not have any such obligation within its lease. The freehold company which was run by the lessees argued at the First-Tier Tribunal (FTT) that this justified a variation to the basement flat lease under Section 35 of the Landlord and Tenant Act 1987 (1987 Act). This allows any party to a long lease to apply to the FTT to seek a variation where the lease fails to make satisfactory provision on certain grounds including the repair or maintenance of the building and the insurance of the building. It is a powerful right and one that requires clear evidence to support its application.
The FTT agreed with the freehold company that the absence of this obligation did indeed amount to a failure "to make satisfactory provision". However, Triplerose were successful in appealing this decision to the Upper Tribunal (UT). In its decision the UT made the following key points:
- the fact that the variations being sought will put the lease into a more common or standard form does not satisfy s35. This will not automatically make the original lease terms unsatisfactory
- in order to show the original terms are unsatisfactory the party seeking the variation must support their claim with clear evidence
In Triplerose the UT considered the current position. There was no clear evidence that the lease terms in their current form had actually caused any problems. Indeed expert evidence indicated the building was in a reasonable condition and for many years the other three flats had simply covered any shortfall. If the UT had been faced with a different set of circumstances which perhaps showed disrepair or the other three flats having difficulties paying this may have been sufficient evidence to justify a variation under s35.
An interesting and useful case which highlights the importance of evidence in assessing lease variation matters. Therefore, we would advise obtaining specialist legal advice before embarking on this route.