Another interesting case on the strict application of the consultation provisions under LTA 1985. Long lessees (who had bought under the right to buy legislation) challenged various service charge items raised by Leicester City Council. In particular, Leicester had self-insured (ie it had not obtained insurance on the open market but had self-insured by taking on the insurance risk). The Upper Tribunal held that the wording of the leases did not cover any charge that Leicester made for self-insurance and thus was irrecoverable.

Obviously, much depended upon the precise wording of the leases, but those used by Leicester were fairly typical and therefore this decision is likely to be of widespread application (500 flats in Leicester, and many others in the rest of the country). Accordingly, no council that self-insures can recover an insurance contribution from right to buy leaseholders, unless there is an express clause in the lease to that effect. ?Mihovilovic v Leicester [2010] UKUT 22(LC) (access free at www.practicalconveyancing.co.uk). Source: Nearly Legal (http//nearlylegal.co.uk/blog).