Commonhold and Leasehold Reform Bill [H.L.] - continued        House of Lords
PART II, LEASEHOLD REFORM - continued
Claim to acquire right - continued

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Landlords etc. not traceable.     82. - (1) This section applies where a RTM company wishing to acquire the right to manage premises-
 
 
    (a) complies with subsection (4) or (5) of section 77, and
 
    (b) would not have been precluded from giving a valid notice under that section with respect to the premises,
       but cannot find, or ascertain the identity of, any of the persons to whom the claim notice would be required to be given by subsection (6) of that section.
 
      (2) The RTM company may apply to the court for an order that the company is to acquire the right to manage the premises.
 
      (3) Such an order may be made only if the company has given notice of the application to each person who is the qualifying tenant of a flat contained in the premises.
 
      (4) Before an order is made the company may be required to take such further steps by way of advertisement or otherwise as is determined proper for the purpose of tracing the persons who are-
 
 
    (a) landlords under leases of the whole or any part of the premises, or
 
    (b) parties to such leases otherwise than as landlord or tenant.
      (5) If any of those persons is traced-
 
 
    (a) after an application for an order is made, but
 
    (b) before the making of an order,
       no further proceedings shall be taken with a view to the making of an order.
 
      (6) Where that happens-
 
 
    (a) the rights and obligations of all persons concerned shall be determined as if the company had, at the date of the application, duly given notice under section 77 of its claim to acquire the right to manage the premises, and
 
    (b) the court may give such directions as it thinks fit as to the steps to be taken for giving effect to their rights and obligations, including directions modifying or dispensing with any of the requirements imposed by or by virtue of this Chapter.
      (7) An application for an order may be withdrawn at any time before an order is made and, after it is withdrawn, subsection (6)(a) does not apply.
 
      (8) But where any step is taken for the purpose of giving effect to subsection (6)(a) in the case of any application, the application shall not afterwards be withdrawn except-
 
 
    (a) with the consent of the person or persons traced, or
 
    (b) by leave of the court.
      (9) And leave shall be given only where it appears just that it should be given by reason of matters coming to the knowledge of the RTM company in consequence of the tracing of the person or persons traced.
 
Withdrawal of claim notice.     83. - (1) A RTM company which has given a claim notice in relation to any premises may, at any time before it acquires the right to manage the premises, withdraw the claim notice by giving a notice to that effect (referred to in this Chapter as a "notice of withdrawal").
 
      (2) A notice of withdrawal must be given to each person who is-
 
 
    (a) landlord under a lease of the whole or any part of the premises,
 
    (b) party to such a lease otherwise than as landlord or tenant,
 
    (c) a manager appointed under Part II of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, or
 
    (d) the qualifying tenant of a flat contained in the premises.
Deemed withdrawal.     84. - (1) If a RTM company has been given one or more counter-notices containing a statement such as is mentioned in subsection (2)(b) of section 81 but either-
 
 
    (a) no application for a determination under subsection (3) of that section is made within the period specified in subsection (4) of that section, or
 
    (b) such an application is so made but is subsequently withdrawn,
       the claim notice is deemed to be withdrawn.
 
      (2) The withdrawal shall be taken to occur-
 
 
    (a) if paragraph (a) of subsection (1) applies, at the end of the period specified in that paragraph, and
 
    (b) if paragraph (b) of that subsection applies, on the date of the withdrawal of the application.
      (3) The claim notice is deemed to be withdrawn if-
 
 
    (a) a winding-up order or an administration order is made, or a resolution for voluntary winding up is passed, with respect to the RTM company,
 
    (b) a receiver or a manager of the RTM company's undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the RTM company comprised in or subject to the charge,
 
    (c) a voluntary arrangement proposed in the case of the RTM company for the purposes of Part I of the Insolvency Act 1986 is approved under that Part of that Act, or
 
    (d) the RTM company's name is struck off the register under section 652 or 652A of the Companies Act 1985.
Costs: general.     85. - (1) A RTM company is liable for reasonable costs incurred by a person who is-
 
 
    (a) landlord under a lease of the whole or any part of any premises,
 
    (b) party to such a lease otherwise than as landlord or tenant, or
 
    (c) a manager appointed under Part II of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,
       in consequence of a claim notice given by the company in relation to the premises.
 
      (2) Any costs incurred by such a person in respect of professional services rendered to him by another are to be regarded as reasonable only if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs.
 
      (3) A RTM company is liable for any costs which such a person incurs as party to any proceedings under this Chapter before a leasehold valuation tribunal only if the tribunal dismisses an application by the company for a determination that it is entitled to acquire the right to manage the premises.
 
      (4) Any question arising in relation to the amount of any costs payable by a RTM company shall, in default of agreement, be determined by a leasehold valuation tribunal.
 
Costs where claim ceases.     86. - (1) This section applies where a claim notice given by a RTM company-
 
 
    (a) is at any time withdrawn or deemed to be withdrawn by virtue of any provision of this Chapter, or
 
    (b) at any time ceases to have effect by reason of any other provision of this Chapter.
      (2) The liability of the RTM company under section 85 for costs incurred by any person is a liability for costs incurred by him down to that time.
 
      (3) Each person who is or has been a member of the RTM company is also liable for those costs (jointly and severally with the RTM company and each other person who is so liable).
 
      (4) But subsection (3) does not make a person liable if-
 
 
    (a) the lease by virtue of which he was a qualifying tenant has been assigned to another person, and
 
    (b) that other person has become a member of the RTM company.
      (5) The reference in subsection (4) to an assignment includes-
 
 
    (a) an assent by personal representatives, and
 
    (b) assignment by operation of law where the assignment is to a trustee in bankruptcy or to a mortgagee under section 89(2) of the Law of Property Act 1925 (foreclosure of leasehold mortgage).
 
Acquisition of right
The acquisition date.     87. - (1) This section makes provision about the date which is the acquisition date where a RTM company acquires the right to manage any premises.
 
      (2) Where there is no dispute about entitlement, the acquisition date is the date specified in the claim notice under section 78(7).
 
      (3) For the purposes of this Chapter there is no dispute about entitlement if-
 
 
    (a) no counter-notice is given under section 81, or
 
    (b) the counter-notice given under that section, or (where more than one is so given) each of them, contains a statement such as is mentioned in subsection (2)(a) of that section.
      (4) Where the right to manage the premises is acquired by the company by virtue of a determination under section 81(5)(a), the acquisition date is the date one month after the determination becomes final.
 
      (5) Where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 81, the acquisition date is the date one month after the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.
 
      (6) Where an order is made under section 82, the acquisition date is (subject to any appeal) the date specified in the order.
 
Notices relating to management contracts.     88. - (1) Section 89 applies where-
 
 
    (a) the right to manage premises is to be acquired by a RTM company (otherwise than by virtue of an order under section 82), and
 
    (b) there are one or more existing management contracts relating to the premises.
      (2) A management contract is a contract between-
 
 
    (a) an existing manager of the premises (referred to in this Chapter as the "manager party"), and
 
    (b) another person (so referred to as the "contractor party"),
       under which the contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage.
 
      (3) And in this Chapter "existing management contract" means a management contract which-
 
 
    (a) is subsisting immediately before the determination date, or
 
    (b) is entered into during the period beginning with the determination date and ending with the acquisition date.
      (4) An existing manager of the premises is any person who is-
 
 
    (a) landlord under a lease relating to the whole or any part of the premises,
 
    (b) party to such a lease otherwise than as landlord or tenant, or
 
    (c) a manager appointed under Part II of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises.
      (5) In this Chapter the "determination date" means-
 
 
    (a) where there is no dispute about entitlement, the date specified in the claim notice under section 78(6),
 
    (b) where the right to manage the premises is acquired by the company by virtue of a determination under section 81(5)(a), the date when the determination becomes final, and
 
    (c) where the right to manage the premises is acquired by the company by virtue of subsection (5)(b) of section 81, the day on which the person (or the last person) by whom a counter-notice containing a statement such as is mentioned in subsection (2)(b) of that section was given agrees in writing that the company was on the relevant date entitled to acquire the right to manage the premises.
Duties to give notice of contracts.     89. - (1) The person who is the manager party in relation to an existing management contract must give a notice in relation to the contract-
 
 
    (a) to the person who is the contractor party in relation to the contract (a "contractor notice"), and
 
    (b) to the RTM company (a "contract notice").
      (2) A contractor notice and a contract notice must be given-
 
 
    (a) in the case of a contract subsisting immediately before the determination date, on that date or as soon after that date as is reasonably practicable, and
 
    (b) in the case of a contract entered into during the period beginning with the determination date and ending with the acquisition date, on the date on which it is entered into or as soon after that date as is reasonably practicable.
      (3) A contractor notice must-
 
 
    (a) give details sufficient to identify the contract in relation to which it is given,
 
    (b) state that the right to manage the premises is to be acquired by a RTM company,
 
    (c) state the name and registered office of the RTM company,
 
    (d) specify the acquisition date, and
 
    (e) contain such other particulars (if any) as may be required to be contained in contractor notices by regulations made by the appropriate national authority,
       and must also comply with such requirements (if any) about the form of contractor notices as may be prescribed by regulations so made.
 
      (4) Where a person who receives a contractor notice (including one who receives a copy by virtue of this subsection) is party to an existing management sub-contract with another person (the "sub-contractor party"), the person who received the notice must-
 
 
    (a) send a copy of the contractor notice to the sub-contractor party, and
 
    (b) give to the RTM company a contract notice in relation to the existing management sub-contract.
      (5) An existing management sub-contract is a contract under which the sub-contractor party agrees to provide services, or do any other thing, in connection with any matter relating to a function which will be a function of the RTM company once it acquires the right to manage and which-
 
 
    (a) is subsisting immediately before the determination date, or
 
    (b) is entered into during the period beginning with the determination date and ending with the acquisition date.
      (6) Subsection (4) must be complied with-
 
 
    (a) in the case of a contract entered into before the contractor notice is received, on the date on which it is received or as soon after that date as is reasonably practicable, and
 
    (b) in the case of a contract entered into after the contractor notice is received, on the date on which it is entered into or as soon after that date as is reasonably practicable.
      (7) A contract notice must-
 
 
    (a) give particulars of the contract in relation to which it is given and of the person who is the contractor party, or sub-contractor party, in relation to that contract, and
 
    (b) contain such other particulars (if any) as may be required to be contained in contract notices by regulations made by the appropriate national authority,
       and must also comply with such requirements (if any) about the form of contract notices as may be prescribed by such regulations so made.
 
 
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