Applying to a First-tier Tribunal

What is a First-tier Tribunal?

The First-tier Tribunal (Property Chamber), which has replaced the Leasehold Valuation Tribunal in England, is part of Her Majesty's Courts and Tribunals Service. Each tribunal, which is entirely independent and impartial, consists of two to three members; comprising a chairman, now called a judge who is usually a solicitor or barrister, a qualified valuer or surveyor and in some cases a lay person with experience of leasehold issues. There are currently five regionally based tribunal offices (London, Northern, Midland, Eastern and Southern).

All information and advice provided by the Leaseholder Association (LA) usually covers England and Wales but it should be noted that the above changes only apply to tribunals in England. In Wales they have not yet introduced the changes and are still operating as Leasehold Valuation Tribunals with different rules.

If the leaseholder considers that an issue cannot be or has not been resolved by the LA’s conciliation service, the complaint procedure of the landlord or managing agents, (if they have one), or by dispute resolution they may wish to make an application to a First-tier Tribunal (FTT).

The leaseholder should check the following before making an application to an FTT:

if the issue is one that the FTT can deal with;
if any other leaseholders are affected and whether they would join in any action;
if the landlord or managing agents might settle prior to the FTT becoming involved; and
if there are any specific procedures relating to the matter being referred to the FTT.

Whilst it is not intended that the FTT would be as formal as the courts, it is a judicial body and has procedural rules the parties will be required to follow. Although neither side is required to have legal representation, the leaseholder will often find that the landlord will appoint a solicitor to defend any action. The leaseholder can appoint a representative who is not legally qualified but they should have relevant experience; in all cases the full details of the representative must be given to the FTT and the other parties at an early stage.

The LA can provide professional advice to its members, and may provide representation at an FTT hearing if the case could not be resolved in any other way.

If the leaseholder is unable to find representation, they will be responsible for preparing for and presenting the case themselves. This will mean obtaining evidence and putting together all of the relevant documents in a format that can be presented to the other party and to the FTT.

The FTT needs to hear and consider both sides of the dispute before they can reach a decision. This decision will be based upon the evidence as well as the judgment and experience of the members of the FTT panel. Their decision is sometimes given to the parties at the end of the hearing but, it is more usual for the FTT to send a written decision to both parties along with reasons for the decision within 4 to 6 weeks.

What can the FTT deal with?

The FTT deals with a wide range of leasehold housing related issues and these are examples of the most common:

Under the Landlord and Tenant Act 1985 an application may be made:

for a determination as to the liability to pay and the reasonableness of any service charges;
for a determination as to whether the insurance available through the landlord's insurers is unsatisfactory in any respect, or the premiums payable for such insurance are excessive;
to limit the amount of costs incurred by the landlord during the proceedings before a tribunal which can be recovered from leaseholders; and
for dispensation from complying with Section 20 consultation procedures in respect of major works or qualifying long-term agreements.

Under the Landlord and Tenant Act 1987an application may be made for:

the appointment of a manager;
the variation of one or more leases; and
a determination of the purchase price following an Acquisition Order.

Under the Leasehold Reform Housing and Urban Development Act 1993 an application may be made for:

a determination of the terms or the price payable when leaseholders collectively buy the freehold of a block of flats;
a determination of the terms or price payable when extending the lease of a flat; and
a determination of whether the landlord's costs which are payable by the leaseholder are reasonable.

Under the Commonhold and Leasehold Reform Act 2002 an application may be made for:

a determination as to the liability to pay and the reasonableness of any administration charges;
a determination in relation to an alleged breach of a lease covenant to enable forfeiture action to proceed;
a determination on whether there is entitlement to Right To Manage (RTM), which includes cases where the landlord cannot be found;
the reasonableness of charges relating to any application for RTM;
the amount of accrued uncommitted service charges due to the RTM company;
whether approvals under the lease may be granted by an RTM company; and
the reasonableness of applying the ‘four-year rule’ before another RTM company can exercise the RTM.

What are the overriding objectives of the FTT and the parties’ obligations?

The new Tribunal Procedure/Rules in 2013 introduced the overriding objective, which places the obligation on the FTT to deal with cases fairly and justly. This includes:

dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties and of the FTT;
avoiding unnecessary formality and seeking flexibility in the proceedings;
ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;
using any special expertise of the FTT effectively; and
avoiding delay, so far as compatible with proper consideration of the issues.

The FTT must take into account the overriding objective when it:

exercises any power under these Rules; or
interprets any rule or practice direction.

The parties must:

help the FTT to further the overriding objective; and
co-operate with the FTT generally.

How is an application to an FTT made?

A notice of application may be made on the prescribed form where one is provided for the matter that is in dispute. The FTT publishes model ‘notice of application’ forms and these can be downloaded from the Justice website.

If it relates to a matter where a notice of application form is not available in a prescribed form, a written notice of application in the form of a letter will be acceptable. The rules of the FTT state that a notice of application should be signed and dated and include the following:

the name and address of the applicant and of their representative, if any;
an address where documents can be sent to the applicant or their representative;
the name and address of the party whom the claim is being made against, which will be known as the respondent;
the address of the property to which the application relates and the applicant's connection with that property;
the name and address of any landlord or leaseholder of the property to which the application relates;
the outcome the applicant is seeking and their reasons for making the application; and
a statement that the applicant believes the facts in their application are true.

What notices must be served?

Some applications require prior notice to be given to other parties, due to the rules of the FTT, and therefore the application would not be accepted by the FTT until this notice has been given. In these circumstances the parties would usually be the leaseholders, the landlord and the managers although there might be others who would be affected by the application. The FTT may require the applicant to provide proof that the required notice has been given when they submit the application.

What happens when the FTT receives an application?

The FTT will provide a copy of any application and any attached documents to the party who is named as the respondent, who will usually be the landlord. If the application relates to service charges, the FTT will send notice of the application to the secretary of any recognised tenants' association and if they have their details to anyone else who is likely to be significantly affected by the application. Any notice of the application sent to anyone other than the respondent, which will usually be the other leaseholders, must specify that they may apply to the FTT to be joined as a party to the proceedings.

The notice of application must be accompanied by any documents required by a practice direction as well as payment for the required fee.

What application fees need to be paid?

A fee must be paid before the majority of applications to the FTT can proceed, the maximum currently is £630 but this is subject to change. The fee is payable in two instalments: the first when making the application and the second where a hearing is to be held, before that hearing takes place. There are possibilities for the fee to be waived for some applicants, based upon criteria such as low income and minimal savings.

The leaseholder is liable for the application fee and, as in most cases where a hearing is held, a hearing fee, but each party usually pays their own costs of representation. There are some cases where a landlord considers they can recover their costs under the terms of the lease. If this matter arises the leaseholder should seek professional advice as an explanation of the relevant lease terms may be required. Regardless of the wording of the lease, there are circumstances where the FTT has the power to award costs and may do so.

There are fees for applications relating to service charges, insurance premiums and administration charges. Full details of the fees are set out in the First-tier Tribunal (Property Chamber) Fees Order 2013 (SI 2013 No 1179).

In cases where a court transfers proceedings to the FTT, the application fee will be the fee that would have been payable to the FTT less the amount of any fees already paid to the court up to that date. Where the fee already paid to the court is equal to or greater than the fee payable to the FTT, the leaseholder does not have to pay any further fees.

What types of applications do not require a fee?

Some applications to the FTT do not require a fee, regardless of the applicant’s financial circumstances, for example:

To determine the terms or price in respect of enfranchisement, which is collective purchase of the freehold.
To determine the terms or price in respect of lease extensions.
All applications relating to Right To Manage.
To determine whether breach of a covenant or condition in the lease has occurred.
To apply for an order for the limitation of service charges arising from the landlord's costs of proceedings specifically under Section 20(c) Landlord and Tenant Act 1985.
To apply for an order to dispense with service of a Preliminary Notice prior to an action for the appointment of a manager.
To determine liability to pay an estate management charge.
To apply for variation of an estate management charge.

What is the fee for the FTT hearing?

After the initial application fee is paid, if the dispute requires a hearing, the leaseholder will need to pay a hearing fee of £190 for all applications. The leaseholder will have to pay the fee within 14 days of receiving notice of the hearing date.

If the hearing fee is not paid within 14 days after the date on which the FTT sends the leaseholder a written notification that the fee has not been paid, this is likely to result in the FTT deciding that the case has been withdrawn. In these circumstances the FTT has the jurisdiction and, if one side withdraws their application, the case is likely to be dismissed and the costs will usually be awarded against the party that withdraws. Regardless of the circumstances, the FTT hearing cannot take place until all fees have been paid or exemption has been confirmed.

Is a waiver or reduction of fees possible?

It is possible in some cases and therefore a leaseholder who believes they might qualify for help with fees payable to the FTT should refer to the booklet and application form.

Can any fees paid to the FTT be reimbursed?

There are some circumstances where the FTT may order the reimbursement of all or part of the application and hearing fees. Although this is entirely at the discretion of the FTT, either during the hearing or after it has ended, the leaseholder may ask the FTT for an order for the other party to reimburse any fees that have already been paid.

What are directions?

The FTT has the power to issue directions to the parties relating to the exchange of evidence and the general conduct of the case. The rules also allow one or more of the parties to apply for a direction either by written application to the FTT or by requesting this verbally during the hearing. An application for a direction must include the reason why it is being made.

A copy of the proposed application should be sent to every other party before it is made and they will be given an opportunity to object to the application. The rules of the FTT include the procedure for any party to object to the application and they also set out how to challenge any direction made by the FTT.

What evidence is required?

The FTT has to consider the arguments and evidence from both sides and it is essential that the leaseholder prepares and presents their case as effectively as possible.

The FTT will have little if any background to the dispute so they can only consider the evidence that has been presented. At the hearing, members of the FTT panel may question the parties and any witnesses, but their main role is to make a decision on the evidence that is presented to them, rather than trying to find evidence for themselves.

The leaseholder may have requested documents from the landlord prior to the FTT hearing and if these have not been provided, the FTT can be asked to issue directions for the landlord to supply relevant information. If it believes the evidence will be significant and it is not forthcoming, the FTT can issue a witness summons.

Where an expert is required, the FTT may require expert evidence from a surveyor or experienced property manager. The rules of the FTT require this expert to help the FTT on matters within their area of expertise and this duty will override any agreement they might have made with whoever has instructed or paid them. Evidence to support their case will need to be provided by leaseholders, but in the appropriate circumstances the FTT may instruct the parties to jointly appoint an expert.

All evidence must be submitted in writing to the FTT and the other party at least seven days before the date of the FTT hearing unless a different period has been agreed by the FTT. Both parties will need to ensure they have met the agreed deadline as it will require the consent of the FTT for evidence to be introduced at a later stage. The report of the expert mentioned above must include certain information and statements which are set out in the rules of the FTT and the report must be specifically addressed to the FTT and signed by the expert.

What is non-compliance?

The leaseholder should be aware that the FTT has powers to deal with non-compliance with any directions of its rules. This could mean striking out the leaseholders’ case and preventing or restricting them from taking any further part in the proceedings.

Where a party has ignored or failed to comply with any directions of the FTT, including the giving of evidence or production of a document, the FTT may refer this type of non-compliance to the Upper Tribunal (Lands Chamber). Although this rarely happens the FTT could ask the Upper Tribunal to use their powers to find either party in contempt of court.

Striking out an application

There are a number of circumstances in which the FTT has the power to strike out an application or parts of the application. The FTT may decide to strike out if:

the leaseholder has failed to comply with a direction given by the FTT stating that failure to comply with the direction could lead to the striking out of proceedings;
the applicant has failed to co-operate with the FTT to such an extent the FTT considers they are no longer able to deal with the case in a fair and just way;
the case concerns the same parties and the FTT finds it is similar or substantially the same as those in proceedings already decided by the FTT;
the FTT regards the proceedings, or the way in which they are being conducted, to be frivolous, vexatious or an abuse of the process of the FTT; or
the FTT considers there is no reasonable prospect of the leaseholders' case succeeding.

Unless the striking out is due to a party's failure to comply with a direction, a decision to strike out cannot be made unless the parties have been given an opportunity to make representations to the FTT regarding this.

The leaseholder has the right to make a written application to the FTT to have the matter reinstated following any order to strike out. This application must be received by the FTT within 28 days after the date the notification of striking out is sent by the FTT to the leaseholder. The rules on striking out apply to both the leaseholder and the landlord.

What other powers does the FTT have?

The FTT can be requested to issue a summons to witnesses to attend a hearing. A summons should give at least 14 days' notice of the hearing, but the FTT could reduce this period if they consider it necessary.

The FTT may order any person in attendance at the hearing to answer any questions or produce documents they consider to be relevant to any issue. Where this person is not a party to the FTT proceedings the summons should clarify that their expenses for attending the hearing will be met, and specify which party is to meet these expenses. Failure to comply with a summons or order may be treated as contempt of court.

What happens if one party withdraws?

Either party may give notice of withdrawal and this may be given verbally at the hearing or a written copy can be sent to the FTT. However, this will not take effect without the consent of the FTT panel and they may specify conditions before allowing the withdrawal. The contents of the notice are prescribed by the FTT rules and the notice must be signed and dated.

The party that has requested to withdraw may apply to reinstate their claim. An application of this type must be received by the FTT within 28 days after:

the date of the hearing at which the withdrawal took place; or
the date on which the FTT received the notice of withdrawal.

The FTT must notify each party in writing of any withdrawal and that party may apply for the case to be reinstated providing they do this within 28 days of receiving notification. Leaseholders should seek advice as withdrawal, without very good reason, will almost certainly result in a liability to pay the other party’s reasonable costs.

Can an FTT case be transferred to the Upper Tribunal (Lands Chamber)?

There are cases which might be extremely complex, have significant and wide-ranging financial implications, or possibly set a legal precedent where the FTT may decide to refer them at any early stage to the Upper Tribunal (Lands Chamber).

Can the FTT make a decision without a hearing?

The FTT can only make a decision once a full hearing has taken place, unless all parties to the application and anyone else that would be affected have agreed that a decision can be reached without a hearing.

A party or anyone else potentially affected are considered to have consented if the FTT has given them not less than 28 days' notice of their intention to deal with the case without a hearing and no objection has been received within that time. The rules of the FTT allow a shorter notice period if the FTT considers there are urgent or exceptional circumstances.

What is a consent order?

Where the parties to the application reach agreement at any time after the application on how their dispute can be resolved, and where it considers it appropriate, the FTT can issue a consent order that will bring proceedings to an end without having to make a decision.

What happens if there is a hearing?

If it decides there is going to be a hearing to consider the case, the FTT must give the parties no less than 14 days' notice, unless:

both parties agree to a shorter notice period; or
the FTT considers that there are urgent or exceptional circumstances.

The hearing fee must be paid in full within 14 days of the leaseholder receiving notice of the hearing date. Either before or after the hearing the FTT panel members are entitled to carry out an inspection of the property and the other parties can be present. The FTT panel have the right to question any of the parties who attend the hearing.

Members of the public have the right to attend most FTT hearings, but the FTT can prevent this if they consider they have good reason. Leaseholders may find that although the intention was for FTT hearings to be relatively informal, there will be procedures which are similar to those followed at court hearings..

When will a decision be made?

A decision may be given verbally at the end of the FTT hearing but in all cases the FTT must provide both parties as soon as possible and typically within 4 to 6 weeks with:

a written decision setting out the determination of the FTT in full;
including reasons for the decision; and
notification of any right of appeal against the decision and the time within which, and manner in which, such appeal rights may be exercised.

Any order made by the FTT may be enforced, with the permission of the county court, in the same way as a county court order.

Can the FTT change its decision?

A case could be referred back to the FTT, to review its decision if, for example, a similar case was subsequently determined in a different way by the Upper Tribunal.

Should an appeal be made?

Before the leaseholder considers an appeal, a number of options may be possible;

The FTT may be requested to correct any clerical error, or omission from the decision.
Where the FTT has reached a decision which ended the proceedings, they have the power to set aside the decision and re-make it. This is possible where it is considered to be in the interests of justice; and one or more of the following conditions are satisfied:

a relevant document was not sent to a party, or their representative, or was not received by them at an appropriate time;
a relevant document was not sent to or received by the FTT at an appropriate time;
where a party, or their representative, were unable to be present at the hearing; or
there was some other irregularity in the proceedings.

An application to set aside a decision must be received by the FTT either:

within 28 days after the date the FTT sent notice of the decision to the party applying; or
if later, within 28 days after the date on which the FTT sent notice of the reasons for their decision to the party applying.

Who deals with appeals?

Where a party decides to appeal to the Upper Tribunal (Lands Chamber), an application for permission to do so must first be made to the FTT. The application for permission should be received by the FTT within 28 days of the latest of the following correspondence from the FTT with the:

date of written reasons for the decision;
date of notification of amended reasons for, or correction of, the decision of the FTT following a review; or
date of notification that an application for the decision to be set aside has been unsuccessful.

Are there any other costs relating to the FTT?

Leaseholders should be aware the FTT may award costs in the following circumstances:

‘wasted costs’, which are any costs incurred by a party due to improper, unreasonable or negligent acts by any legal or other representative. The FTT has the power to order a party to pay the whole or part of any wasted costs; or
where a party has been considered to have acted unreasonably in any aspect of the proceedings, such as producing documents late without good reason which caused a hearing to be adjourned.

There are two circumstances in which the FTT may make a costs order. Either on its own instruction or by an application made to the FTT and the party they wish to claim costs from. Any application should be accompanied with a schedule of costs that are being claimed, which provides enough details for a ‘summary assessment’.

The application for a costs order may be made at any time during proceedings but must be made within 28 days of the date the FTT sends a notice of the decision or notice of consent to withdrawal that ends the proceedings.

Costs may be decided by agreement between the party being asked to pay and the party receiving the costs or by a detailed assessment of all or part of the costs by the FTT or, in some cases, if the FTT decides this, by application to the county court. The FTT may decide that interest is payable on costs following their detailed assessment. The party liable for costs must be allowed an opportunity to make representations and payment in instalments may be permitted by the FTT.

Otherwise, each party will be responsible for meeting their own costs, although leaseholders should be aware that the terms of the lease might allow the landlord to recover any professional or legal costs through the service charge or directly from the leaseholder applying to the FTT. It should be noted that leaseholders can apply to the FTT under Section 20 (c) of the Landlord and Tenant Act 1985 to try to prevent the recovery of the landlord’s legal costs from the service charge or any other estate funds. The LA would strongly advise leaseholders to ensure they take this action at an early stage when making any FTT application.

Please see the LA information sheet 101 Glossary for a precise explanation of the terms used in this information sheet. An application to an FTT can be a complex and costly process and therefore leaseholders are strongly advised not to consider this until all other options have been explored. It should be noted that although decisions of the FTT and its predecessor the Leasehold Valuation Tribunal can be used for guidance they do not set legal precedents in the same way as higher tribunals or court decisions will. Members should always contact The Leaseholder Association for advice on how they might resolve their complaint before applying to the FTT.

Disclaimer: This is a very general explanation of the subject. Where issues are not governed by statute the information is our opinion or best practice. You are advised to seek professional advice before acting on the guidance contained herein. Whereas The Leaseholder Association endeavours to ensure that published information is correct, it does not warrant its completeness or accuracy. The Leaseholder Association assumes no responsibility or liability for any injury, loss or damage incurred as a result of any use or reliance upon the information and material contained herein.