1.2.1 The Government seeks views on how the selling of leases to companies may be a tactic employed by landlords to prevent sufficient numbers of lessees qualifying under the 1993 Act. We feel that provided the suggestions made at paragraph 1.1.1 are followed then a landlord would have to go some way to sell leases to companies to avoid enfranchisement. Moreover, as the participating tenants need to be a majority then this particular tactic may be substantially modified. One has to remember that the problem for company lessees, as it was for trustee-lessees (prior to substitution of S.6(4) by S.111 of the Housing Act 1996), is the residence requirement. However, as the government proposes for only 50% of the qualifying tenants to participate (and they must hold at least half of the flats in the premises), the 1993 Act only requires 50% of the participating tenants to meet any kind of residence requirement. If a residence requirement is to remain, (and on this we comment later), then it must be for some purpose. If its purpose was to prevent speculative company purchases then, like trustees, we would suggest the 1993 Act be amended so that if a share-holder or director of the company lessee occupies the flat as (or a member of his family) their only or principal residence for the requisite period then that should enable the company to participate not just as a simple participating tenant but also as one meeting the residence requirement. After all the rules as they stand would not stop a speculator, if he wished, and if enfranchised lessees were willing, to purchase enough flats post-enfranchisement to take effective control of the premises.

This test has, with the concept of Marriage Value, caused the most concern for lessees. The problem is that in a time when people move to employment opportunities away from their leasehold flat, or if a large proportion of lessees in a building have a home elsewhere, then a substantial proportion of lessees are unable to enfranchise. This is a problem well known in central London, but does occur elsewhere.

LEASE was concerned about the prospects for the post-enfranchisement management of premises if residence was not a requirement for enfranchisement. However, this consideration and may have been too much of a nannying view reflected in the fact that there are blocks of flats in England and Wales held by companies not registered in the jurisdiction. This does have its own problems, but if the Government has no desire to insist that companies or individuals that own freeholds in England and Wales be resident in the jurisdiction then why should it be a hurdle that a group of lessees, who are likely to have greater financial interest in the premises, should have to meet a residence requirement in order to acquire the freehold of the building containing their flats? Any fear of mismanagement should be countered by the new remedy in Part II of the 1987 Act for the appointment of a manager or even the proposed 'Right to Manage'.

The proposal by the Government is to amend the residence requirement so that it is fulfilled where half the participating tenants occupy their flats as their only or principal dwellings at the date when the initial notice is served, or have done so for periods totalling eighteen months out of the last five years. Whilst the second alternative can be readily understood, the first alternative, we would submit, presents an immediate problem: how does one determine whether or not at the date when the notice is served, the flat is the lessees only or principal residence? This point would need to be settled if it is not to become a loose-end, open to dispute later.

If the Government is prepared, as it appears, to relax the residence test there would be merit in a re-examination of the justification for such a test at all. There is no doubt that it is an impediment to enfranchisement, in many cases a full obstruction. It is appreciated that the requirements for residence follows the principles of the original 1967 Act, restricting rights of enfranchisement to the resident occupier but there seems little objective reason in this. Any owner of a property will, it can be argued, have interests in its future management and upkeep more immediate than the long-term objectives of the investment landlord sufficient, with the points above, to counter any case for requiring residence for purposes of good management.

LEASE considers there to be a case for the removal of the residence requirement, certainly in respect of 1993 Act rights, and suggests that it is appropriate for the Government to return to first principles and consider the matter a fresh.

2.1 There is little doubt that the valuation procedures provide the greatest area of concern and uncertainty to both sides, but predominantly to the tenants, who are, in the main, unfamiliar with the principles involved and not fully sensible of the relative values of their diminishing asset. The present rules are generally incomprehensible to the lay person and require too great an input from the professional valuer, to the extent that valuation costs often exceed amounts of purchase price or premium resulting. These costs often swallow up the nominal profit accruing to the tenant in the lease extension or freehold purchase and contribute greatly to the arguments of the reality of otherwise of marriage value.

We consider there to be an urgent need of simplification of the process such as to save professional costs and to provide accessibility to the lay person.

2.2 LEASE is aware of major concerns by tenants, and tenants organisations, as to the inclusion of marriage value in assessed prices or premiums, and the case for its removal from the statutory valuation process. However, for the purposes of this response we have accepted that marriage value exists in the market and have limited our comments to its assessment and apportionment. It is not necessary to rehearse the argument on marriage value, this is well presented in the Consultation Paper, but it is relevant to examine the situation in which it arises.

Marriage Value in the market place reflects, basically, the market difference in the relative values of shorter and longer leases of similar flats and there can be little dispute on this basis in the finding of marriage value, in say, a 60 year unexpired term. What has caused difficulties and confusion, both to the tenant and the professional, has been the application of marriage value by the LVTs in their determinations, moving outside what can generally be regarded as market conditions. The LVTs outside London work entirely on what appears to them to be market comparables and do not find marriage value on terms in excess of, on average, 75 years; this seems to reflect actual market conditions. The London LVT, by contrast, regularly finds marriage value on terms in excess of 80 years and has applied it in terms longer than 115 years, on the premise that control of the freehold has a premium value. There has been little compelling evidence presented to justify the concept of a premium on control and this has added to tenants uncertainity as to the principle of marriage value if it is applied in situations where there is no relative difference between present term and longer lease values.

2.3 The situation would be greatly improved by the statutory imposition of maximum terms beyond which no marriage value was deemed to accrue. It has been suggested that central London is a special case and that the upper limit for application of marriage value should be 100 years with 80 years for outer London and the rest of the country. LEASE does not support special terms for the very small numbers of properties likely to be affected (mainly in the Knightsbridge, Belgravia area) and recommends the imposition of a national limit of 80 years. Therefore, for any applicants with present terms beyond 80 years, the valuation will be a much simpler issue of the assessment of the value of the term, with the reversion being of minimal value; this will drastically reduce professional input and professional fees and, hereby, overall costs to the tenant.

In cases below 80 years the division of the marriage value must also be more certain if professional time and costs are to be reduced here too. There has been only one LVT determination which departed from the equal division between the parties; equal division seems the most equitable arrangement and LEASE would recommend this be imposed by statute. There is a valid argument of a greater proportion of marriage value accruing to the landlord in cases of terms of less than ten years, where the proportion of marriage value to revisionary value is much less; this approach has been taken by the Lands Tribunal in Cadogan Estates v Shahgholi (April 1998) where, in consideration of an unexpired term of nine months the Tribunal awarded 72% of the determined marriage value to the landlord. Notwithstanding the LT precedent, we feel that different divisions of marriage value of lesser terms will complicate rather than simplify the process and may lead to argument on marginal terms of, say 11-15 years. We therefore recommend no special arrangements for shorter leases with division of marriage value remaining even between the parties.

Finally, the premium from control would seem to reward a landlord who has made the need for lessees to gain control valuable. This cannot be right and LEASE would submit that marriage value arises only on this basis it should be statutorily excluded.

2.4 LEASE strongly supports the further simplification of the valuation process through the reduction of variables which presently take up considerable amounts of professional time and costs in determining.

2.4.1 the discount rate - the Consultation Paper refers to the very narrow range of yield rates applied by the LVTs in their determinations (these are, in fact, much narrower again outside London). In most long and mid-term lease lengths the result of differing yield

rates is minimal to the overall cost with the compensating effect of the marriage value.

This is demonstrated in the following examples, taken from LVT determinations; where the yield rate is changed the marriage value varies to compensate:-

4 flats in N4

(a) LVT determination @ 11%

i) Landlords interest 2,700

ii) Marriage value x 50% ,1,650

Price ,4,350

(b) Same calculation applying a 9% yield

i) Landlords interest ,3,300

ii) Marriage value x 50% ,1,350

Price ,4,650

7 flats in NW3

(a) LVT determination @ 13%

i) Landlords interest , 3,930

ii) Marriage value x 50% ,24,535

Price ,28.465

(b) Same @ 11%

i) Landlords interest , 5,215

ii) Marriage value x 50% ,23,892

Price ,29,107

Large building -

63 flats, Edgeware

(a) LVT determination @ 10%

i) Landlords interest , 56,450

ii) Improved value ,<8,547,000

less lhdrs interest ,8,140,000

less llords interest ,56,450

marriage value , 357,379 x 50% - ,178,68

Price ,235,139

(b) Same improvement in value, yield @ 12%

i) Landlords interest ,35,333

ii) Improved value ,8,547,000

less lhdrs interest ,8,140,000

less llords interest ,35,333

marriage value ,371,667 x 50% - ,185,833

Price ,221,116

2.4.2 relative values of individual flats - professional values at LVTs frequently refer to published tables of relative values in seeking to establish marriage value, for example those produced by W.A Ellis and by Savills, similarly the Valuation Office of the Inland Revenue produce, for their own use a relative value graph. These indications are well used in the market place and there seems little reason why something similar should not be given legislative status. As with yield rates, although to a greater final effect, the pre-determination of the values of lease by unexpired term in relation to freehold value, will drastically reduce uncertainty and professional fees.

2.5 In both cases there is a substantial amount of evidence available, through both market evidence and LVT determinations. However, we would raise some doubt as to whether this is sufficiently widespread as to inform prescription of discount rates and relative values without further research. However, subject to this, LEASE strongly supports the principle of prescribed variables to simplify the process.

With the statutory prescription on marriage value, its division, discount rates and relative values, the valuation will become a more transparent and accessible to the lay tenant as well as considerably cheaper in terms of professional fees. This must be the target for the Government to aim at. There will be criticism that such prescription will provide rough justice in valuation with potential for both sides to lose out. This may be true overall but we are convinced that it would be little different on average across the board from present procedures. Valuation is not a science and has an accepted 15-20% margin of error, usually refined in negotiation. Accepting that degree of variation it is hard to accept that rough justice would be inferior justice to present uncertain and expensive methods.

3.1 The use or rather suggested use of arbitration as an alternative to the Leasehold Valuation Tribunal arises not because of the established advantages of arbitration, but due to the current deficiencies in the LVT. These problems on the whole concern delays, and the cost to parties of representation before the LVT. So far as delays are concerned, where they are due to lack of panel-members, then perhaps more resources need to be put into the recruitment of panel members. The London LVT in particular comes to mind, because if the government goes forward with its other proposals under Chapter 2, or adopts those submitted to it, it is likely to continue to be the busiest Tribunal and may become busier still. Hence, any extension or easing of the rights to enfranchisement must be followed by providing a dispute resolution procedure able to handle the referrals.

Where delays in the LVT are due to the actions of one or other party then the LVT, we would submit, should take a greater role in case management and seeing to it that cases which are in its lists are disposed of as soon as possible. Such management would be in line with the Woolf reforms.

With this case management role the LVT would need powers additional to those already provided in Schedule 22 paragraph 7 of the Housing Act 1980 for the enforcement of breaches of its directions or procedures. The options we feel, could include all, or some, of the following:

Arbitration or expert determination we would suggest should only be available as an option to the parties, and only with the agreement of both parties.

The Arbitration Act 1996 would be a good template for arbitrations for enfranchisement. However for determinations by experts we would suggest that the experts role be set out in an amended part of the 1993 Act dealing with amongst other things:

(a) his appointment;

(b) time periods for the referral of matters to him;

(c) the submission of documents; and

(d) procedures for leave to appeal

3.2 The imposition of a leave-filter for appealing decisions of the LVT is a proposal LEASE wholly endorses. In looking at cases where appeals have been mounted by certain landlords it is clear that an element of tactical appealing has arisen to intimidate and pressurise the enfranchising lessees to pay a higher figure then the LVT determined for the freehold. Such practice must be stopped in the interests of finality and to avoid what must be an abuse of process.

4.1 Any right of inclusion in a collective enfranchisement claim for a qualifying tenant against the wishes of the other participating tenants will be unworkable without the legislation imposing rules which apply in default of agreement between the participating tenants.

The rules would need to regulate who is to be the nominee purchaser (and if it is to be a company, its Articles and Memorandum of Association), how much each participating tenant is to contribute and when they can be required to contribure, what share each is to receive in the freehold, possibly whether new leases are to be issued to all the participants on acquisition of the freehold and the terms of such leases, and all other necessary rights and obligations of the participating tenants and of the nominee purchaser in relation to the exercise of the right to collective enfranchisement (i.e. all those matters whch should sensibly be dealt with in a Participation Agreement between the participating tenants and the nominee purchaser).

Alternatively, if there is to be a right of inclusion, there would have to be rules entitling the prospective participating tenants to vote on such matters and for a particular majority to be able to bind all the prospective participating tenants in relation to such matters, with the right to withdrawal if a particular tenant was not happy to participate on the terms voted for by the majority. Similarly, any rules would have to include requirements for any prospective participant to satisfy all necessary individual qualification at date of the Initial Notice.

Whilst all the above could be achieved through legislation it is our reluctant view that the requirements of a right to participate will very greatly complicate and delay the enfranchisement process. In the context of present proposals for simplification this would seem a retrograde step.

1.1 Essentially we would foresee the right being similar to that in Part II of the 1987 Act, but without its fault based conditions. The manager should have to take all of the management power as currently vested, under the terms of their lease, with the landlord.

The appointed manager should be a limited company comprising as shareholders the requisite majority of leaseholders, or an individual professional manager. The new right would have to be accompanied by statutorily imposed obligations owed by the manager to all the parties to the lease (including tri-partite leases) to carry out the functions set out in the notice served on the landlord. Like the rights under Part II of the 1987 Act the new right would not be merely the swapping of one managing agent for another, with the landlord still as principal and therefore ultimately responsible, instead this right would place the manager in the position of the landlord or other party responsible under the terms of the lease so far as management is concerned.

The manager should, as in Part II of the 1987 Act, be able to bring actions relating to the premises, both contractual and tortious (see section 24(5)(b) of the 1987 Act). Such an action would be brought in the name of the manager, relying on the power provided by this new right. In that the nominee manager will have no legal estate in the property, forfeiture, if it is to remain, would be a matter for the landlord, but on the more restricted basis we discuss later.

2.1 The tenants who should qualify, we feel, are those tenants who, qualify under, Part I of 1987 Act but including long-leaseholders of local authorities and registered social landlords where all the flats are held on long leases and a variable service charge is paid.

The government proposals do not extend to premises belonging to local authorities and registered social landlords. Whilst we concede this point, reluctantly, where there is a mix of long-leaseholders and other tenants we do not see why premises should be exempt where all the flats are held by long-leaseholders. In such circumstances we feel that the landlords interest in the premises is limited, in the main, to the ground-rent, notwithstanding the covenants contained in the lease. Our view is that lessees of local authorities and registered social landlords in the circumstances described above should be in no worse position than any other leaseholder.

3.1 The government has requested consideration of the need for the nominee manager to have property management qualification. Only in the event that such a requirement is imposed generally would we feel that qualification should be imposed for the right to manage.

There is, at present pending introduction of any regulation of management, no legal requirement for a landlord to have any form of qualification or experience in managing property. In this context, it might be queried why the tenants taking over the management of their own homes should require any further qualification than their displaced landlord.

However, we feel that residential property does require professional management and propose that the right be subject to the appointment of a managing agent. There is no particular use or value in professional qualification of the nominee manager, what is required is an obligation, say for buildings of 10 flats and above, to appoint a properly qualified professional managing agent. This then begs the question of what qualification will be appropriate. The RICS or ISVA qualification is respected but not directly relevant to property management, CIH relates primarily to social landlord property; pending development of a specialised qualification in management the matter of qualification remains of doubtful value.

3.2 The financial position of the manager may hinder the effect of right to manage without a concomitant provision in the legislation creating these rights. Where a lease does not already make provision for monthly, quarterly or semi-annual payments in advance, then it should an implied term of the lease, from the date of appointment of the manager, for payment of service charges in advance on condition of presenting a budget at the beginning of the year; and a certified summary at the end of the year. In fact other terms may have to be implied such as management fees, a power to borrow and pass on the costs of borrowing, a power to raise reserve/sinking funds, and there may be more.

4.1 We would recommend that our suggested amendments to collective enfranchisement be the basis for the exercise of these rights. In other words a majority of qualifying tenants holding at least half the flats in the property.

As there are no terms of acquisition to cause difficulties, unlike a collective enfranchisement, we would recommend a right of inclusion. This right would require any group of qualifying tenants proposing to exercise the right to manage would have to serve notice on the non-participants and giving them a period to elect to participate, and in due course to become members of the vehicle set up to act as manager.

Where a manager has already been appointed by the LVT under Part II of the 1987 Act we suggest that before the right to manage can be exercised the qualifying tenants would have to apply to the LVT for the discharge of the appointed manager. Similarly where the right to manage has been exercised a lessee will still be able to apply for a manager to be appointed under Part II of the 1987 Act. This, we suggest will prevent minorities of lessees suffering at the hands of those who exercise the right to manage but prove not to meet the necessary standards of management.

A matter we would put forward for consideration, but on which we have been unable to reach a conclusion is: if the right to manage has been exercised, and the lessees then enfranchise under the 1993 Act, would the right to manage be automatically discharged? The reason for the difficulty is that the right to manage, we would suggest, should be accompanied by terms to be implied in leases. If these terms are absent from the leases themselves, then on enfranchisement the nominee purchaser would manage by reverting to the explicit terms of the lease rather than the implied terms under the right to manage. The problem may be that these terms may be old, out moded and otherwise inadequate, and perhaps place the nominee purchase in difficulties which the previous nominee manager would not have had.

4.2 Information which the landlord can be required to supply would include, but would not be limited to:

The exercise of the right would be by the service of a notice which would be answered by a Counter-Notice. The admission in the Counter-Notice should be conclusive, it should not be accompanied by references to it being without prejudice or in any other way attempting to reserve a right to challenge. The Counter-Notice, if qualification for is in issue, should make it plain that the tenants qualification is being challenged. This right will then be assessed by the LVT, with a party only being able to appeal with leave.

6.1 A landlord against whom the right to manage has been exercised will, we suggest, have the following rights, irrespective of the terms of lease:

(a) access to the common parts of the premises; and

(b) where other matters arise or a conflict with the nominee manger occurs, he will be able to apply to the LVT for Directions.

6.2 Should the manager be shown, to the satisfaction of the LVT, to have failed to attain a reasonable standard in meeting the obligations arising from his appointment, then the LVT can discharge the appointment.

Where the landlord, we suggest, seeks to have particular works done, or matters such as insurance changed, he should be required to serve notice on the manager (such notice to also be served on the tenants). The manager should reply by counter-notice either accepting the points, or rejecting them all or in part (again to be copied to the lessees). If the landlord disputes the counter-notice he should apply to the LVT within a prescribed period, failing which the original notice is to be deemed withdrawn.

7.1 Discharge of the manager we have mentioned at 6.1, but where a manager wishes to relinquish his appointment this should be on notice to both tenants and the landlord. The tenants will then be entitled to serve, we suggest, a notice on the landlord by the majority setting out their proposals. These may include that the landlord recommence management or that another manager should take over. If the latter is proposed then particulars of the manager should be provided such as name, address, qualifications, and particulars of professional insurance (where the number of flats require professional management qualification for the manager).

Whilst the right to manage is a new right which will be particular to England and Wales, the control of property managers is something which many countries faced with similar problems have already addressed. In New South Wales and in France the state and national government respectively introduced compulsory registration and regulation of managing agents. LEASE would suggest, that the management of residential property be subject to regulation and a requirement for managers to be registered/licensed.

1.1 The continued imposition of a trust of service charges under section 42 of the 1987 Act we welcome. However, lessees should have more information relating to these trusts including a quarterly copy of the bank account information, for their particular premises. We feel that each account/fund should be peculiar to its letting scheme. Hence, on an estate with blocks of flats where the lessees of the blocks share the costs then one fund will be appropriate, but where the management obligations are specific to the building, and without lessees of other buildings sharing costs, then an account should be available for each building.

Where there are breaches of the requirements set out above or others relating to management then such breaches should be subject to reference to the registration body for the manager. This body would need to then contact the manager and seek his comments on the complaint made, and to be supplied with copies of the documents relevant to the complaint. This registration body can then take whatever level of action is deemed appropriate be it from admonishment to full blown disciplinary proceedings with the possibility of a fine, suspension or de-registration of the manager. It is this real threat from the registration body that may lead to improved standards. Additionally, we feel it is right to make it a specific offence to breach the requirements for the protection of lessee monies.

2.1 We strongly support the continuation of requirements for consultation of tenants under S20 Landlord and Tenant Act 1985 although there seems to be a case for a minor increase in amounts and a sliding scale. The present limits can require consultation on total expenditure of only 1000 in a block of 20 flats, which can be unnecessarily onerous to the landlord, but require no consultation where the landlord proposes 499 pounds expenditure per flat in a two unit conversion. This is unfair to tenants and we would propose a sliding scale, based on a revised limit of 100 pounds per flat:

It would seem self-evident that consultation with the lessees is in principle a good thing and leads to fewer disputes.

We would suggest that where a landlord appoints a manager rather than a residents association having to serve notice under section 30B of the Landlord and Tenant Act, 1985 requiring the landlord to provide information about the managing agent, it should be required that the landlord as a matter of course provide a copy of the terms of engagement of the agent, including the managers qualifications, to the tenants.

Where a landlord proposes to change his appointed manager he should be required to inform the lessees of this proposal and seek comments similar to a S20 consultation and if more than 50% oppose the particular appointment that the landlord be required put forward another manager.

2.2 In our experience insurance disputes become bitter because, amongst other things, the manager often fails to answer lessees enquiries on the subject. Although paragraph 16 of the RICS Code sets out good practice, much of it is what should@ be done rather than what must be done. We would suggest that a lessee should be able to serve notice on the landlord requiring the landlord to not only attach a copy of the insurance policy and a statement of the premium, but to also explain why that insurance policy was selected for the premises, with the additional duty to disclose any commission or connection with the insurer or insurance broker. This connection would be defined as arising where the management company is the holding company or a subsidiary of that bodys holding company, as these matters are defined in section 736 of the Companies Act, 1985.

The lessees may then decide on whether or not, in the light or the written representations they have received, to make an application to the LVT on the basis that the insurance is unreasonable, as part of the service charge:

3.1 LEASE feels that licensing of managers as in other jurisdictions should be followed in England and Wales. To be licensed certain minimum qualifications would be expected and in addition a requirement that the licenced manager undertake continuing professional development.

Whichever body is established to regulate managers, and we recommend an independent statutory body, it must have real power to discipline licensed practitioners. We feel that could be financed by an annual levy which the landlord or nominee manager would be required to pay to the regulatory body.

1.1 We welcome the extension of enfranchisement to lessees of houses who have extended their leases. As these premises qualified under the original valuation basis we would suggest that this be the method for calculating the purchase price for the freehold as opposed to an open market price. The landlord would have already received not only a premium on the grant of the original lease, but also the benefit of a modern ground rent since the beginning of the extended term.

2.1 We endorse the proposed procedure for enfranchisement of houses with an absentee freeholder, by application to the County Court followed by determination of the terms by the LVT.

2.2 To be consistent with our comments on the residence test for collective enfranchisement, we would propose the same considerations now be raised for the enfranchisement of leasehold houses.

2.3 A subject on which the government has not commented, but on which LEASE has received consistent requests for action is Estate Management Schemes (EMS). In essence the problem is that whilst the need for such schemes is, perhaps reluctantly, accepted such schemes essentially perpetuate positive covenants between freehold owners. These covenants are essentially service charges (as defined by section 18 of the Landlord and Tenant Act, 1985) yet enfranchised owners, as freeholders, are outside the statutory regime of reasonableness in the Landlord and Tenant Act 1985.

We would suggest that as, for practical purposes, leasehold covenants have been perpetuated, these charges under an EMS should be subject to having to be reasonable as understood under section 19 of the Landlord and Tenant Act 1985, and in the event a cost, including costs incurred for various consents, is disputed that an LVT can determine whether or not that cost is reasonable. Similarly, the nominee purchaser of a building containing flats should also be able to make an application to the LVT, where the premises are subject to an EMS.

3.1 We agree with the extension of the right of first refusal to leasehold houses.

3.2 Prosecution of offences, we would submit, under the 1987 Act should be based on either a longer period than six months, from the commission of the offence, for the prosecution to be brought; or that the time for bringing the prosecution should only arise from the time when knowledge of the offence has come to the attention of the requisite majority of qualifying tenants, or the tenant, depending on if it is premises consisting of flats or a leasehold house.

It would be helpful for section 10A to give a non-exhaustive list of circumstances constituting reasonable excuse from prosecution. For example:

a. where following the correct service of offer notices, at least 50% of qualifying tenants indicate in writing to the landlord within the two month period for acceptance of the offer that they do not wish to accept his offer. As things stand at present, even if this occurs, the landlord risks committing a criminal offence if he sells to a third party within the two month period because the tenants may be able to argue that the legislation as framed requires the landlord to wait the full 2 months to see whether the offer is accepted by the requisite majority even if it has been indicated to him in writing that they do not wish to accept by a sufficient number of qualifying tenants making it impossible for the requisite majority to serve an acceptance notice. It is at present open to the tenants to argue that the legislation does not allow the landlord to place any reliance on such statements by the qualifying tenants but that he must allow for the possibility of their changing their minds within the 2 month period and subsequently joining in the service of a valid acceptance notice (see section 6(1) of the 1987 Act).

b. Should the Act make it a criminal offence for a landlord to contract with a third party to sell his interest to that third party where the contract makes the sale conditional upon the landlord complying with the right of first refusal procedure and the tenants failing to accept the offer in accordance with the statutory provision?

3.3 Section 7(1) of the 1987 Act provides essentially, that where the landlord has offered and the tenants have failed to serve the requisite notices of acceptance and nomination, that for 12 months from the end of the protected period a disposal to a third party can occur subject to contain provisions. The problem is that the definition of the protected period is defined in section 6(4) as:

A... the period beginning with the date of service of the acceptance notice...

4.1 We support the proposal that rent should only be recoverable if demanded and suggest that the demand be in a prescribed form stating the tenants rights and obligations and the effect of non-payment.

4.2 We welcome steps to prevent what is often the threat of forfeiture proceedings for what are relatively minor breaches of terms of the lease. We would suggest that for breaches of the lease:

Similarly, where alterations are made without consent, and the landlord alleges some loss affecting his reversion the landlord should be required to serve notice on the tenant setting out, how the alteration has affected the value of his reversion. Similarly if he has incurred costs for the granting of a licence, that only those reasonable costs should be recoverable, and the LVT would be the venue to determine whether or not those costs are reasonable.

The Law Commission is already considering forfeiture. However, at LEASE our experience is that it gives too great an opportunity for, at least so far as residential long leasehold property is concerned, bullying and intimidation particularly when matters are in dispute.

Forfeiture should be the last possible remedy after a number of preliminary steps have failed such as those expressed above. The windfall result is unfair , particularly where the matter at issue is the non-payment of money. In these circumstances, we submit that an action for the money should be the correct procedure, which if successful can lead to, if the debt remains unpaid;

A charging order in particular should be borne in mind because it can result in an order for the sale of the premises.

Furthermore, if the debt is more than ,750 a defendant can be the subject of bankruptcy proceedings and these are ample remedies in English Law to meet any need for the enforcement of breaches concerning non-payment of rent and/or service charges.

5.1 The definition of service charges in section 18 of the Landlord and Tenant Act 1985, does not explicitly include improvements. In the interest of those who have leases where the costs of such works can be recovered, we would submit that they be subject to the same requirements of reasonableness as other service charges. This is particularly significant for lessees of local authorities and registered social landlords because their leases often include the right to recover improvement contributions.

Where a landlord displays a section 20 Notice rather than serving it on each lessee it would be of assistance to landlord and tenant alike if the method of display could be further particularised.

5.2 At present Part II of the 1987 Act would appear to assume the landlord is the party responsible for managing, whereas leases often have three parties: landlord, tenant and management company. In such circumstances the management company is responsible for managing the premises. As presently constituted, part II does not define the management company as the landlord, thus does Part II apply in circumstances involving tri-partite leases? We would submit that surely that is the intention, but in the interest of removing doubt Part II should account for such circumstances.

5.3 The government is already consulting on matters concerning conveyancing in England and Wales. We would only like to add to our comments to be submitted on that separately, that where flats are being sold, a landlord should be obliged by statute to provide information relevant to the sale of the premises, and where there are arrears of rent or service be required to provide a statutory statement which specifies and sets out the arrears an the periods to which they relate.

5.4 Section 20 of the Landlord and Tenant Act 1985, we suggest, could be improved upon so that the fees of professionals eg surveyors involved in the preparation of specification of the purposes of relevant works should be part of a pre-section 20 procedure. Cases in the County Court and the LVT are not consistent on this point.

5.5 Where as part of a letting scheme a landlord has covenanted that other leases he grants will be granted on the same or similar terms, in order for the lessee to seek enforcement of those clauses, a landlord should be required by statute to supply (at reasonable cost) certified copies of the relevant lease(s).

5.6 Where property has passed to the Crown, for example bona vacantia, we would submit that tenants be able to apply to the LVT under Part II of the 1987 Act, and whilst the Crown is not bound by the Act it will give similar undertakings to follow it as it did for the Leasehold Reform Act 1967, and the Leasehold Reform, Housing and Urban Development Act 1993.