Property litigation weekly update – 17 December 2021


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This week the team analyses a report published by the House of Commons, which outlined how public policy can better support high streets as they bounce back from the negative impact of Covid-19. We also cover a case that discussed whether the First Tier Tribunal (FTT)'s decision was enforceable in the County Court.

Supporting our high streets after Covid-19 – A report on how to build back better

The Levelling Up, Housing and Communities Committee published a report last week on the future of the UK's high streets and town centres following the impact of Covid-19.

The Committee made a number of recommendations to Government including a call for an immediate 'lessons learned' review of the impact on the short and long-term health of the high street of the Government's response to the pandemic. The report also includes a critical review of the Build Back Better High Streets strategy which sets out how the Government intends to support high streets in their recovery from the pandemic.

The Committee considered those areas of government policy which need to be reviewed to support the regeneration of high streets and town centres in a post-pandemic environment. The report emphasises the importance of place, partnerships and collaboration between local authorities, the business community, property owners and local communities in order to 'build back better'. The development of mixed-use high street and town centres is considered crucial to meet the challenges posed by post-pandemic consumer trends and lifestyle habits, including increased online shopping and flexible working.

The report stresses the need for an overhaul of the Government's town regeneration funding schemes which are said to be too complex, short-term and fragmented and fail to reach the areas that need them most. The report suggests a move towards fewer but larger, longer-term grants to encourage sustainability and more comprehensive regeneration plans, as well greater local devolution of funding.

The report also calls for the Government to announce its plan for business rates once the current pandemic reduction for retail, hospitality and leisure businesses comes to an end. The Government's announcement that it will consult on the introduction of an online sales tax is welcomed by the Committee but the report highlights the continued need for wider long-term reforms of taxation for retail businesses generally.

The Committee also expressed its concerns about the impact of the pandemic on the ongoing relationship between landlords and tenants and asks for more clarity on the Government's ringfencing of commercial arrears, particularly on the periods to which the ringfencing applies. Investment landlords will welcome the Committee's call for a review of the current use of CVAs, which is acknowledged to be open to abuse under the current regime.

Whilst the report is positive about the Government's focus on the revitalisation of the UK's high streets and town centres, it highlights the many fundamental reforms which are urgently needed to ensure that vision can be put into practice.
 
Enforcement of FTT's determination under s27A LTA 1985

This case concerned the County Court's power to enforce a decision of the First Tier Tribunal (FTT) in particular, a decision made on an application under s27A of the Landlord and Tenant Act 1985 (LTA 1985) for the determination of service charge payable.

Section 27A of the Landlord and Tenant Act 1985 allows the FTT to determine, when asked to do so, whether a service charge is payable and if so, by whom, to whom, the amount, the date it is payable and the manner in which it is payable.

The leaseholder, Mr Athir Al-Balhaa, made an application to the FTT under s27A LTA 1985 and the FTT duly made a determination as to what service charges were allowed or disallowed for the various years in question. Termhouse then successfully applied to the County Court under Civil Procedure Rule 70.5 to enforce the determination and obtained an Order for Mr Al-Balhaa to make payment of the sums which comprised the service charges determined in principle by the FTT to be allowed.

Mr Al-Balhaa appealed to the Court of Appeal, which found the County Court did not have the jurisdiction to enforce a decision of the FTT of this nature because the decision was declaratory in nature, i.e. it did not order Mr Al-Balhaa to make a payment.

The consequences of the case are significant for residential landlords, because the Court of Appeal indicated in its judgment that any determination as to reasonableness of a service charge made by a FTT would need to be enforced by a fresh claim in the County Court. This is likely to increase time and cost, and will therefore need to be factored into when and how service charge recovery claims are brought, including forfeiture claims based upon arrears of rent.
 
Insights from across the firm

Positive news stories

  • In a much-needed boost for women's sport, the FA and Barclays Bank have this week agreed a three-year £30 million sponsorship deal which includes launching a community fund to support the development of the grassroots game, meaning more young girls in deprived and underrepresented areas will have the opportunity to get involved in the sport.
  • An autistic boy, Harry, whose mother put out a plea on social media for birthday cards from other children, to help her son feel included and less alone, ended up with 30 children attending a bowling party for Harry who was thrilled to be able to have a "proper birthday".
  • In Norway, a now disused coal mine will be turned into a 3,000-square-kilometre natural park which locals hope will encourage wildlife to flourish and return Svalbard, where the mine is located, into an area of vital ecological importance once again.
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