Commonhold and Leasehold Reform Bill [H.L.] - continued        House of Lords
PART I, COMMONHOLD - continued
Commonhold association - continued

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Duty to manage.     34. - (1) The directors of a commonhold association shall exercise their powers so as to permit or facilitate so far as possible-
 
 
    (a) the exercise by each unit-holder of his rights, and
 
    (b) the enjoyment by each unit-holder of the freehold estate in his unit.
      (2) The directors of a commonhold association shall, in particular, use any right, power or procedure conferred or created by virtue of section 36 for the purpose of preventing, remedying or curtailing a failure on the part of a unit-holder to comply with a requirement or duty imposed on him by virtue of the commonhold community statement or a provision of this Part.
 
      (3) But in respect of a particular failure on the part of a unit-holder the directors of a commonhold association-
 
 
    (a) need not take action if they reasonably think that inaction is in the best interests of establishing or maintaining harmonious relationships between all the unit-holders, and
 
    (b) shall have regard to the desirability of using arbitration, mediation or conciliation procedures instead of legal proceedings wherever possible.
      (4) A reference in this section to a unit-holder includes a reference to a tenant of a unit.
 
Voting.     35. - (1) This section applies in relation to any provision of this Part (a "voting provision") which depends on the passing of a resolution by a commonhold association.
 
      (2) A voting provision is satisfied only if every member is given an opportunity to vote in accordance with any relevant provision of the memorandum or articles of association or the commonhold community statement.
 
      (3) A vote is cast for the purposes of a voting provision whether it is cast in person or in accordance with a provision which-
 
 
    (a) provides for voting by post, by proxy or in some other manner, and
 
    (b) is contained in the memorandum or articles of association or the commonhold community statement.
      (4) A resolution is passed unanimously if every member who casts a vote votes in favour.
 
 
Operation of commonhold
Enforcement and compensation.     36. - (1) Regulations may make provision (including provision conferring jurisdiction on a court) about the exercise or enforcement of a right or duty imposed or conferred by or by virtue of-
 
 
    (a) a commonhold community statement;
 
    (b) the memorandum or articles of a commonhold association;
 
    (c) a provision made by or by virtue of this Part.
      (2) The regulations may, in particular, make provision-
 
 
    (a) requiring compensation to be paid where a right is exercised in specified cases or circumstances;
 
    (b) requiring compensation to be paid where a duty is not complied with;
 
    (c) enabling recovery of costs where work is carried out for the purpose of enforcing a right or duty;
 
    (d) enabling recovery of costs where work is carried out in consequence of the failure to perform a duty;
 
    (e) permitting a unit-holder to enforce a duty imposed on another unit-holder, on a commonhold association or on a tenant;
 
    (f) permitting a commonhold association to enforce a duty imposed on a unit-holder or a tenant;
 
    (g) permitting a tenant to enforce a duty imposed on another tenant, a unit-holder or a commonhold association;
 
    (h) permitting the enforcement of terms or conditions to which a right is subject;
 
    (i) requiring the use of a specified form of arbitration, mediation or conciliation procedure before legal proceedings may be brought.
      (3) Provision about compensation made by virtue of this section in regulations or in a commonhold community statement may include-
 
 
    (a) provision (including provision conferring jurisdiction on a court) for determining the amount of compensation;
 
    (b) provision for the payment of interest in the case of late payment.
      (4) Regulations under this section shall be subject to any provision included in a commonhold community statement in accordance with regulations made by virtue of section 31(5)(b).
 
Commonhold assessment.     37. - (1) A commonhold community statement must make provision-
 
 
    (a) requiring the directors of the commonhold association to make an annual estimate of the income required to meet the expenses of the association,
 
    (b) enabling the directors of the commonhold association to make estimates from time to time of income required in addition to the annual estimate,
 
    (c) specifying the percentage of any estimate made under paragraph (a) or (b) which is to be allocated to each unit,
 
    (d) requiring each unit-holder to make payments in respect of the percentage of any estimate which is allocated to his unit, and
 
    (e) requiring the directors of the commonhold association to serve notices on unit-holders specifying payments required to be made by them.
      (2) For the purpose of subsection (1)(c)-
 
 
    (a) the percentages allocated by a commonhold community statement to the commonhold units must amount in aggregate to 100;
 
    (b) a commonhold community statement may specify 0 per cent. in relation to a unit.
Reserve fund.     38. - (1) Regulations under section 31 may, in particular, require a commonhold community statement to make provision-
 
 
    (a) requiring the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of common parts;
 
    (b) requiring the commonhold association to establish and maintain one or more funds to finance the repair and maintenance of commonhold units.
      (2) Where a commonhold community statement provides for the establishment and maintenance of a fund in accordance with subsection (1) it must also make provision-
 
 
    (a) requiring or enabling the commonhold association to set a levy from time to time,
 
    (b) specifying the percentage of any levy set under paragraph (a) which is to be allocated to each unit,
 
    (c) requiring each unit-holder to make payments in respect of the percentage of any levy set under paragraph (a) which is allocated to his unit, and
 
    (d) requiring the commonhold association to serve notices on unit-holders specifying payments required to be made by them.
      (3) For the purpose of subsection (2)(c)-
 
 
    (a) the percentages allocated by a commonhold community statement to the commonhold units must amount in aggregate to 100;
 
    (b) a commonhold community statement may specify 0 per cent. in relation to a unit.
      (4) The assets of a fund established and maintained by virtue of this section shall not be used for the purpose of enforcement of any debt except a judgment debt referable to a reserve fund activity.
 
      (5) For the purpose of subsection (4)-
 
 
    (a) "reserve fund activity" means an activity which in accordance with the commonhold community statement can or may be financed from a fund established and maintained by virtue of this section,
 
    (b) assets are used for the purpose of enforcement of a debt if, in particular, they are taken in execution or are made the subject of a charging order under section 1 of the Charging Orders Act 1979, and
 
    (c) the reference to a judgment debt includes a reference to any interest payable on a judgment debt.
Rectification of documents.     39. - (1) A unit-holder may apply to the court for a declaration that-
 
 
    (a) the memorandum or articles of association of the relevant commonhold association do not comply with regulations under paragraph 2(1) of Schedule 3;
 
    (b) the relevant commonhold community statement does not comply with a requirement imposed by or by virtue of this Part.
      (2) On granting a declaration under this section the court may make any order which appears to it to be appropriate.
 
      (3) An order under subsection (2) may, in particular-
 
 
    (a) require a director or other specified officer of a commonhold association to take steps to alter or amend a document;
 
    (b) require a director or other specified officer of a commonhold association to take specified steps;
 
    (c) make an award of compensation (whether or not contingent upon the occurrence or non-occurrence of a specified event) to be paid by the commonhold association to a specified person;
 
    (d) make provision for land to cease to be commonhold land.
      (4) An application under subsection (1) must be made-
 
 
    (a) within the period of three months beginning with the day on which the applicant became a unit-holder,
 
    (b) within three months of the commencement of the alleged failure to comply, or
 
    (c) with the permission of the court.
Enlargement.     40. - (1) This section applies to an application under section 2 if the commonhold association for the purposes of the application already exercises functions in relation to commonhold land.
 
      (2) In this section-
 
 
    (a) the application is referred to as an "application to add land", and
 
    (b) the land to which the application relates is referred to as the "added land".
      (3) An application to add land may not be made unless it is approved by a resolution of the commonhold association.
 
      (4) A resolution for the purposes of subsection (3) must be passed-
 
 
    (a) before the application to add land is made, and
 
    (b) unanimously.
      (5) Section 2(2) shall not apply to an application to add land; but the application must be accompanied by-
 
 
    (a) the documents specified in paragraph 6 of Schedule 1,
 
    (b) an application under section 32 for the registration of an amended commonhold community statement which makes provision for the existing commonhold and the added land, and
 
    (c) a certificate given by the directors of the commonhold association that the application to add land satisfies Schedule 2 and subsection (3).
      (6) Where sections 7 and 9 have effect following an application to add land-
 
 
    (a) the references to "the commonhold land" in sections 7(2)(a) and (3)(d) and 9(3)(f) shall be treated as references to the added land, and
 
    (b) the references in sections 7(2)(b) and (3)(c) and 9(3)(e) to the rights and duties conferred and imposed by the commonhold community statement shall be treated as a reference to rights and duties only in so far as they affect the added land.
      (7) In the case of an application to add land where the whole of the added land is to form part of the common parts of a commonhold-
 
 
    (a) section 7 shall not apply,
 
    (b) on registration the commonhold association shall be entitled to be registered (if it is not already) as the proprietor of the freehold estate in the added land,
 
    (c) the Registrar shall make any registration required by paragraph (b) (without an application being made), and
 
    (d) the rights and duties conferred and imposed by the commonhold community statement shall, in so far as they affect the added land, come into force on registration.
 
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