The First-tier Tribunal (Property Chamber) exists to provide a relatively inexpensive and quick resolution for property disputes, including leasehold matters.
There are still costs involved and most of us would probably prefer to avoid going to the courts system altogether. If you lose you may have to pay the other sides costs, and while people can choose to represent themselves, leaseholders might be wary of freeholders who can hire expensive lawyers that they could end up paying for.
Negotiation and mediation are likely to be the most appropriate ways to resolve any dispute in the first instance. If you have researched your case, and have a good argument and all the facts to hand, the other side is likely to be happy to reach agreement out of court. As ever the terms of your lease are usually the bottom line on what you have to pay for, but not necessarily how much! Costs that seem unreasonable and standards that leaseholders find to be inadequate are common causes of dispute. Another common area of dispute is over the costs to leaseholders of buying their own freehold (enfranchisement).
You can see a database of First-tier Tribunal (Property Chamber) decisions HERE to get a feel for what it deal with and how.
What is the First-tier Tribunal?
Our courts system can be complicated and – in places – confusing, because it has developed over 1,000 years rather than being designed from scratch.
Different types of case are dealt with in specific courts: for example, all criminal cases will start in the magistrates’ court, but the more serious criminal matters are committed (or sent) to the Crown Court. Appeals from the Crown Court will go to the High Court, and potentially to the Court of Appeal or even the Supreme Court.
Civil cases will sometimes be dealt with by magistrates, but usually start in the County Court. Again, appeals will usually go to the High Court and then to the Court of Appeal – although to different divisions of those courts.
Tribunals operate in specialised areas and have different rules and procedures. Members of the tribunal panel will include legal professionals and specialists in the field; they are experienced and relied on to reach fair decisions.
If you apply for and are given leave to appeal – which has to be on a point of law or procedure, not because you aren’t happy with the decision – your case will go to the Upper Tribunal. This is a superior court of record, equivalent in status to the High Court, meaning that it can both set precedents and can enforce decisions. Most courts of record require that parties be represented by counsel: costs can begin to mount.
Whether applying to the tribunal yourself or responding to an application made by the other party, you have to weigh the risk that you may be required to pay some or all of the other party’s professional fees, either by means of a tribunal order or under the terms of the lease. If it’s a risk you are not prepared to take, then do consider alternative ways of resolving a dispute.
The Tribunal can sometimes be a bit of a sledgehammer to crack a nut. Leases can be complex documents: you might well be mistaken in your argument all along, or miscommunication or the way accounts are presented. The First-tier Tribunal is often a relatively lengthy and potentially expensive way to find that out.
The alternative: mediation
The courts and some professional bodies such as the Law Society, the Association of Retirement Housing Managers (ARHM), the Association of Residential Managing Agents (ARMA) and the Royal Institution of Chartered Surveyors (RICS) all encourage mediation.
Mediation is a consensual process. A session will not take place until both parties agree to it. Think carefully before you refuse an offer of mediation. In considering costs, court will review the conduct of the parties and any the efforts made before and during the proceedings to try to resolve the dispute. Costs can be awarded against you even if you win!
Mediators are impartial and neutral. They do not judge or impose a solution on the parties. They may well be solicitors, barristers, surveyors or accountants, familiar with leasehold law. They should be accredited by a recognised body. Above all, mediation aims to set the scene for everyone to move forward in a positive frame of mind by finding the win-win solution. Where agreement is reached, the mediator will help the parties to draw up an agreement to be signed by them. If agreement is not possible, you can still proceed to the First-tier Tribunal
You don’t have to engage professional advisers for mediation, but a solicitor might help to interpret the lease and surveyors and structural engineers can advise on more-technical issues like schedules of dilapidations and costings.
Some leases specify that service charge disputes (including major works) go to arbitration. An arbitrator sets down rules for disclosure of expert evidence and documents and, typically, their decision is final and binding.
Find out more about civil mediation HERE.
Reviewed 20 July 2022
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake