More than one rung on the ladder
The exercise of a right, under the Leasehold Reform, Housing and Urban Development Act 1993, to obtain a 90-year extension to a lease of a flat can give rise to difficulties where, as often happens, the immediate landlord of the occupying tenant is himself a lessee, or even a sublessee.
The key figure in such a case is the “competent landlord”, namely the first owner up the ladder of superior interests (frequently the freeholder) who has the requisite number of years to dispose of. The competent landlord conducts relevant proceedings on behalf of all other landlords.
The provisions designed to ensure that the competent landlord is duly notified and that other interested parties are kept in the picture have been described by the Court of Appeal, in Wellcome Trust Ltd v Bellhurst Ltd [2002] EWCA Civ 790; [2002] 2 EGLR 57, as “complex”. Although the particular mistake made by the tenant in that case was held not to have invalidated his notice, it is clear that other lapses may at the very least give rise to lengthy arguments as to the legal consequences.
The best advice for the occupying tenant is to follow those provisions to the letter – and never mind that this will result in what counsel called “a snowfall of paper”.
Even if all goes smoothly, the owners of the superior interests may find themselves in dispute over how the price received from the occupying tenant should be shared out. An analysis of the relevant provisions – which talk in terms of the relative devaluation of the interests in question – may be found in the Lands Tribunal case of Grosvenor West End Properties v Whiston Properties Ltd [2002] 26 EG 145.
In that case Judge Rich QC held that the statutory formula had not been displaced by the terms of an agreement, made between the freeholder and the intermediate landlord, which expressly contemplated, if somewhat obliquely, a possible claim under the 1993 Act.
Whether that ruling should apply to any such agreement, no matter how explicit, remains open to question. Readers’ views are invited.
Related item:
More than one rung on the ladder
The exercise of a right, under the Leasehold Reform, Housing and Urban Development Act 1993, to obtain a 90-year extension to a lease of a flat can give rise to difficulties where, as often happens, the immediate landlord of the occupying tenant is himself a lessee, or even a sublessee.
The key figure in such a case is the “competent landlord”, namely the first owner up the ladder of superior interests (frequently the freeholder) who has the requisite number of years to dispose of. The competent landlord conducts relevant proceedings on behalf of all other landlords.
The provisions designed to ensure that the competent landlord is duly notified and that other interested parties are kept in the picture have been described by the Court of Appeal, in Wellcome Trust Ltd v Bellhurst Ltd [2002] EWCA Civ 790; [2002] 2 EGLR 57, as “complex”. Although the particular mistake made by the tenant in that case was held not to have invalidated his notice, it is clear that other lapses may at the very least give rise to lengthy arguments as to the legal consequences.
The best advice for the occupying tenant is to follow those provisions to the letter – and never mind that this will result in what counsel called “a snowfall of paper”.
Even if all goes smoothly, the owners of the superior interests may find themselves in dispute over how the price received from the occupying tenant should be shared out. An analysis of the relevant provisions – which talk in terms of the relative devaluation of the interests in question – may be found in the Lands Tribunal case of Grosvenor West End Properties v Whiston Properties Ltd [2002] 26 EG 145.
In that case Judge Rich QC held that the statutory formula had not been displaced by the terms of an agreement, made between the freeholder and the intermediate landlord, which expressly contemplated, if somewhat obliquely, a possible claim under the 1993 Act.
Whether that ruling should apply to any such agreement, no matter how explicit, remains open to question. Readers’ views are invited.
Related item:
No escaping clarity Estates Gazette 11 January 2003, p102
