Although the work you do within a residents’ association or as a residential managing agent can be fulfilling and help many individuals find a safe place to call ‘home’, such a profession carries the risk of involvement in various property management-related disputes. Whether it be in regard to the fairness of increased rent charges or the validity of houses in multiple occupation (HMO) licensing, it’s crucial for your organisation to understand the process and ramifications of experiencing a residential property dispute through the First-tier Tribunal (property chamber).
What Is the FTT?
Previously known as the Leasehold Valuation Tribunal (LVT), the First-tier Tribunal (FTT) handles applications, appeals and references related to disputes over property and land. The FTT’s responsibilities extend to residential property concerns, land registration matters, and agricultural land or drainage issues. In terms of residential property disputes, the FTT handles:
- Leasehold disputes
- Leasehold enfranchisement issues
- Increased rent concerns or rent repayment orders
- Park home disputes
- Financial penalties
- Matters regarding improvement notices and prohibition orders under the Housing Act 2004
- Concerns regarding licences for HMOs
- The right to buy a council home being refused because it’s deemed suitable for elderly people
Landlords, tenants, freeholders, leaseholders, park home occupiers and site owners can apply for a hearing with the FTT. The FTT is independent of the government and will listen to both sides of the matter before making a decision.
The FTT Process
- The first step in applying to the FTT is for one or both of the parties involved in the matter to fill in the appropriate application. There are different applications for each type of dispute. Applications are located here. Keep in mind that some forms have a fee for application. Once the application is completed, it needs to be sent via post or fax to the regional office that covers your area. Keep in mind that the application process is different for Wales, Scotland and Northern Ireland.
- From there, the FTT will determine whether to consider the case. More evidence or supporting documents could be required. In some cases, the FTT will not require a hearing, and make a decision on the application and supporting documents alone—also called a ‘paper decision’. You can still ask for a hearing (oral hearing) if you’d like one. A paper decision occurs within six weeks of the FTT reviewing the application. Otherwise, the FTT will ask for an oral hearing.
- In an oral hearing, both parties will attend and present their side of the dispute to the FTT. Someone else can represent each party, such as a legal adviser, surveyor, friend or family member. Both parties will be asked questions by their representatives and the FTT panel members hearing the case. In addition, FTT panel members often inspect the property associated with the case. It’s important to note that oral hearings are typically quite informal, seeing as they are conducted ‘without unnecessary formality’. Following the hearing, the FTT will make a decision (usually provided in writing, with reasons for the outcome) within six weeks.
- If either party is unhappy with the decision, they can ask the FTT for permission to appeal to the Upper Tribunal (lands chamber) within 28 days of the decision. If either party wants to complain about the quality of service they received, they can contact the HM Courts and Tribunals Service.
FTT Costs and Ramifications
Depending on the hearing decision, your organisation might be required to make property management changes (eg removing a property service charge), provide compensation to the other party or receive compensation from the other party.
Costs can be awarded by the FTT in the following instances:
- There is a written contract (eg a lease) that allows a party to claim costs from another party.
- An Act of Parliament says so.
- A party’s representative has unreasonably increased costs incurred by another party (referred to as a ‘wasted costs’ order), such as requiring an oral hearing when a paper decision was appropriate.
- A party has unreasonably brought, defended or conducted a case before the FTT.
It’s important to note that while the LVT previously had cost powers limited to awards of up to £500 for the latter two instances, The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 permitted the FTT to award unlimited costs in those instances.
The 2013 regulations also provided the FTT with the power to ‘strike out’ or dispose of a case if a party fails to comply with the directions of the tribunal (eg if a party doesn’t produce documents in a timely manner).
With these costs and ramifications in mind, it’s crucial to provide your organisation with ultimate peace of mind against residential property disputes by purchasing robust cover. For more guidance and industry-specific insurance solutions, contact Buckland Harvester today.