Housing Today asked a selection of leading law firms to answer the questions they are most often asked by RSLs
Q. I have obtained planning permission to redevelop a property, replacing a house with a block of flats, and have discovered that there is a restrictive covenant affecting the property prohibiting use other than as a single private dwelling house. Is this a problem?

A. You might think not, especially as the property will continue to be used for residential purposes.

However, strictly interpreted, a block of flats is not the same as a single house and pressing ahead with building works may well result in a breach of covenant. This could lead to someone making a claim for damages or, worse still, obtaining an injunction forcing you to stop your building works or even to take down your newly built flats.

The first question to ask is, does anyone still have the benefit of the covenant and are they in a position to enforce it?

Often, restrictive covenants are historic and it is not possible to trace whom, if anyone, might retain the benefit. However, if ignored the risk will remain and could lead to difficulties on a future sale or mortgage of the property.

There are two possible solutions. Firstly, there is restrictive covenant indemnity insurance. This does not remove the title problem but is designed to cover any losses arising in the event that someone does come out of the woodwork.

The second option is application to the Lands Tribunal. If successful, this will cure the title problem (by removing or amending the covenant on the title register) but takes probably several months and is likely to involve significant legal fees.

Where someone with the benefit of a restrictive covenant is still identifiable, or the covenant has been imposed recently, it is likely that neither remedy will be available.

Instead, you will need to seek a release from the covenant directly from the person who holds the benefit. That person will no doubt demand a premium for the release or may refuse to deal with you at all.

Charlie Proddow, senior solicitor, Devonshires

Q. What points do we have to watch out for when preparing our notice of annual general meeting?

A. Different models contain different requirements and many RSLs' rules are specifically adapted. The 1997/98 NHF model rules brought a number of additional governance requirements.

The business of the AGM generally includes receiving the previous year's minutes and receiving the annual report and accounts. It is conventional (though not essential) to pass a resolution to receive them. Another conventional item is to reappoint the auditors.

Some RSLs assume that if all retiring board members put themselves up for re-election then no actual ballot will be needed at the AGM.

However, candidates can normally declare until three days before the AGM – well after the notice has gone out – so provision should be made for an election in case this should occur.

A rule frequently honoured in the breach is that all candidates for board members (including those retiring by rotation) must lodge notice of intention to seek election under the new rules (saying why they are up to the job) though only "new" candidates need a nomination from another shareholder.

Outside candidates may displace board members seeking re-election simply by pointing out that these members have not complied with this requirement.

Also often ignored is the requirement for a general meeting to set the number of board members; otherwise the "default" board size is typically small, say, seven. It should not be assumed that the number of places available at an AGM is the same as the size of the current board. An earlier AGM may have set a higher number, in which case "outside" candidates (up to the true number of vacancies) who lodge applications and nominations may be elected unopposed.

Those RSLs on the 1997/98 model must remember to include various governance requirements with the annual report:

  • statements of aims and objectives
  • a shareholder admission policy
  • obligations of board members
  • skills, qualities and experience required of board members
  • a statement of how/whether these are fulfilled by the current board and any declared candidates (writing this one can be an unenviable task)
  • a summary of any tenants' election procedure.

Gareth Hall, partner, Devonshires

Q. Is it a breach of the Human Rights Act 1998 to use electronic means to monitor employees?

A. Many RSLs are concerned about the impact the Human Rights Act 1998 may have on their ability to monitor employees electronically.

An RSL will be subject to the HRA if it is a "public authority". Section 6 states, "it is unlawful for a public authority to act in a way which is incompatible with convention rights" and a "public authority" is "any person certain of whose functions are functions of a public nature".

In Donoghue v Poplar HARCA, the Court of Appeal said that because the functions of the RSL were so completely connected with those of the local authority from which it had taken a transfer of property, it was exercising public functions and was therefore a public authority.

However, the position of RSLs remains ambiguous and it will be a question of fact and degree in each case.

Whether an RSL is subject to the act will depend on the function being performed.

Even if an RSL is not subject to the act, it may fall foul of other legislation in monitoring employees electronically.

The Regulation of Investigatory Powers Act 2000 makes it an offence to unlawfully interfere with (which means intercept, monitor or record) telephone calls, faxes or emails.

Potentially the most significant curb on electronic surveillance is in the Data Protection Act 1998 and draft code of practice, which require that all information collected or recorded electronically must comply with the data protection principles. The overriding message in the draft code is that surveillance should be undertaken with consent and be proportional.

Emma Jane Bott, solicitor employment group, Trowers & Hamlins

Q. When do I know if behaviour is sufficient to proceed by way of injunction or antisocial behaviour order?

A. This is a difficult question because staff and residents have different "pain thresholds".

All too often associations are prepared to tolerate neighbours and staff being threatened, property being damaged, and vile language being used.

None of this is permitted through the tenancy agreements or provided for in employees' job descriptions, therefore such behaviour is unacceptable.

The association should consider the individual's tenancy conditions relating to nuisance, noise, pets and damage. Interpretation of the clauses in line with the facts of each case will determine whether or not a breach has occurred.

Consider whether or not Sections 153 and 154 of the Housing Act 1996 are applicable. The burden of proof is "on the balance of probabilities" not "beyond a reasonable doubt".

If there is an immediate need of protection, an injunction is a necessity. One can be obtained without notice within 48 hours.

If there has been a persistent nuisance through harassment and noise etc, but there is no element of fear, an on notice injunction may still be appropriate.

The real question is whether "enough is enough". If the answer is "yes", consider action by way of injunction, antisocial behaviour order or through service of a notice under Grounds 12 and 14 of the Housing Act 1988.

Each case is dependent on its own facts and in the event of uncertainty, legal advice should be sought.

Andy Ballard, partner, Lee Crowder Solicitors

Q. What is the effect of non-compliance with a planning condition?

A. Once planning permission has been granted, those operating the development should be made aware, not only that permission has been granted, but also of any conditions that have been attached.

This is particularly important where a condition provides that development shall not commence until some aspect is approved by the local planning authority.

To start the development without compliance with such conditions precedent renders any development unauthorised and vulnerable to enforcement action.

It is not uncommon for site managers to be under the impression that they are implementing the planning permission when they are not, as the relevant condition precedents have not been discharged.

This is not generally a flagrant breach on the part of the builder, but usually as a result of the site manager overlooking the practical procedure of returning to the planning permission to ensure that all the conditions have been formally discharged.

Therefore, from a good practice point of view it is important that house builders train their site managers to be aware of the effect of non-compliance with conditions.

In respect of conditions attached to the planning permission which are not conditions precedent, non-compliance does not make development unauthorised, but the local authority may serve a breach of condition notice requiring compliance with the condition.

Non-compliance with a breach of condition notice is a criminal offence with a fine of £1,000 if convicted. There is no appeal, which raises the possibility of a human rights argument that is untested in the courts.

A local planning authority may also apply for an injunction if it feels this is needed.

These are serious consequences, which could put a stop to the development but could be averted at an early stage if care is given to the discharge of conditions and ensuring receipt of evidence from the local planning authority.

Joanne Hannah and Collette McCormack, planning, environment and public law team, Masons

Q. What effect will the new court rules for possession proceedings have?

A. On 15 October 2001, Part 55 of the Civil Procedure Rules comes into force. This will govern claims for possession of rented and mortgaged property and actions against trespassers. The most radical impact of this rule is the abolition of the 'squatters ' procedure under Order 113 of the now defunct Rules of the Supreme Court.

This procedure survived the introduction of the CPR generally in April 1999 following Lord Woolf's overhaul of the civil justice system.

As a result of its abolition the only way to recover possession against 'squatters' is via the county court using the procedure set out at Part 55.

Although Part 55 does distinguish squatters from other possession actions, the core problems of locally administered justice and county court workload and consequential delays will remain.

Another effect is the requirement to serve witness statements two days before the hearing, whether the proceedings are at that stage defended or not.

In relation to rent arrears cases, which make up the bulk of county court possession work, this will significantly add to the administrative burden on landlords.

However, it may have a more profound effect in relation to actions on the basis of anti-social behaviour.

Traditionally, it has been extremely difficult for landlords to gain assistance, by way of provision of written and oral evidence at court, from neighbours.

Understandably, these individuals feel vulnerable to reprisals and the new requirement for witness statements is likely to increase reluctance.

On a more positive note, the new rule does set out a self-imposed target of eight weeks from issue of proceedings to hearing and also specifically contemplates applications to expedite this in cases of antisocial behaviour.

Jane Mogollon, partner, Devonshires