Unfair Lease Terms – In Statutory Lease Extensions

A flat’s lease under the Leasehold Reform, Housing and Urban Development Act 1993 is regranted on the same terms as the original lease with prescribed changes. The court has recently considered whether the terms of the old lease by being regranted under the Act would be caught by the Unfair Terms in Consumer Contracts Regulations 1999 in the case of (1) NATHAN R JONES (2) AIDEEN M SEYMOUR v ROUNDLISTIC LTD (2018) [2018] EWCA Civ 2284

The Unfair Terms in Consumer Contracts Regulations 1999 reg.4(2), disapplies the Regulations in respect of contract terms that reflected “mandatory statutory or regulatory provisions”. It did not apply to terms in an extended lease which the parties had been obliged to include by the mechanism in the Leasehold Reform, Housing and Urban Development Act 1993 s.57(1), but whose content they had agreed between themselves.

The Court confirm that on a natural reading of reg.4(2)(a), the phrase “contractual terms which reflect mandatory statutory or regulatory provisions” applied only to terms whose actual content was prescribed by the legislation. It did not cover cases where terms whose content had been agreed by the parties were continued as a result of a 1993 Act. That interpretation was supported by the policy underlying Directive 93/13 art.1(2) (which the Regulations implemented). Mandatory statutory or regulatory provisions could be excluded from the scope of the Regulations because the legislator could be taken to have given proper weight to consumer protection when prescribing terms to be included in the lease in question.

You should seek the First-tier Tribunal’s assistance in getting an offending existing lease provision removed during the 1993 Act extension process as it will later be very difficult to use the Regulations to try and render the lease term unfair.

If you own flat and need assistance extending your lease, contact one of our specialist solicitors within the leasehold services team.