HL Deb 18 June 1996 vol 573 cc165-6

(".—(1) After section 34 of the Landlord and Tenant Act 1987 there is inserted—

"Common parts: right to self-management.

34A.—(1) The qualifying tenants of premises other than premises in respect of which the valuable reversion condition set out in Schedule 1 A is satisfied may at any time serve notice on the landlord requiring him to grant to a management company to be established in accordance with subsection (3) a management lease of all the common parts of the premises which the landlord is obliged to maintain and for which the tenants contribute a service charge under their existing leases of parts of the premises.

(2) The landlord shall within 3 months of service of such notice enter into the lease, which shall contain—

  1. (a) provisions for the demise of the common parts;
  2. (b) details of the term of the lease which shall be commensurate (except for a nominal period) with the longest of the existing occupational leases;
  3. (c) provisions for the payment of a peppercorn rent;
  4. (d) provisions entitling the landlord to enforce obligations and to forfeit such lease in the event of non-observance; and
  5. (e) obligations on the management company to observe the landlord's covenants in occupational leases.

(3) Any management company established in accordance with this section shall be in the form of a company limited by guarantee with a Memorandum and Articles in accordance with Table C of the Companies (Tables A-F) Regulations 1985.

(4) Any application to forfeit such management lease shall be made on notice by the landlord to the County Court.

(5) Membership of the management company shall consist of all of the qualifying tenants and the landlord.

(6) In respect of all blocks of flats exceeding 4 flats the management company shall appoint a firm of managing agents on such terms as may be agreed to manage the premises in accordance with the principles of good estate management.

(7) No contract for the employment of managing agents shall extend for a period of more than 2 years and any contracts in existence at the time of service of notice under subsection (1) shall be deemed to come to an end within 9 months from the date of service of such notice irrespective of the contents of any contract and such notice and such termination shall not give rise to a claim for damages on the part of the managing agents.

(8) Any managing agents appointed in accordance with this section shall be required as a term of their contract to observe any management code approved under section 77 of the Leasehold Reform, Housing and Urban Development Act 1993.

(9) Any disputes arising under this section shall be referred for determination to the Leasehold Valuation Tribunal (save in respect of matters referred to in subsection (4)) which shall have full powers to determine all disputes arising under this section.

(10) Where a landlord fails to comply with the provisions of this section, any rent or service charge otherwise due from the tenant to the landlord shall as from the date of expiration of any notice served by the qualifying tenants be treated for all purposes as not being due from the tenant to the landlord.

(11) The qualifying tenants, by calling for a management lease, shall—

  1. (a) confirm the right of the management company to perform and charge for services included in their occupational leases, and
  2. (b) grant to the management company whatever rights as may be necessary to enforce such rights including the right to set up and maintain reserve funds.

(12) Any such management lease shall not affect the tenants' rights to acquire the freehold under Part 1 of this Act.". (2) After Schedule 1 to the Landlord and Tenant Act 1987 there is inserted—