Where there had been no service of a valid notice advising a residential tenant of a new landlord, the six-month time limit for serving a purchase notice had not started to run.
Crown House, 24-28 Bodfor Street, Rhyl (the property) was a four-storey building comprising two commercial units on the ground floor and nine residential units above. Eight of the residences were held under long leases at a peppercorn rent with a service charge, the ninth formed part of the freehold. In Goulden v Milne [2024]EW Misc 1 (CC), His Honour Judge Keyser KC considered as a preliminary issue whether the lessee claimant’s purchase notice was valid such that she was entitled to acquire the freehold of the property under Landlord and Tenant 1987 Act.
Where the 1987 Act applies, a landlord shall not make a disposal of qualifying premises without first giving notice to the qualifying tenants. If there has been such a transfer, the qualifying tenants may compel transfer of the premises to themselves by serving a purchase notice. The purchase notice must be served within six months of service by the new landlord of a notice under s3 and 3A Landlord and Tenant Act 1985 (being notices that advise of the new landlord’s identity and the tenants’ rights relating to the original disposal).
The defendant was a practising solicitor. On 1 June 2022, he completed the purchase of the freehold of the property having successfully bid £40,000 for it at an auction on 27 April 2022.
The defendant’s predecessor had not served notice giving right of first refusal. The defendant argued that the mix of commercial and residential units within the property was such that the 1987 Act did not apply but the court heard expert evidence and rejected this contention. He asserted that as a precaution he had served a notice under s3A of the 1985 Act under cover of a letter dated 25 May 2022 but the court did not find him an honest or a credible witness. It observed that although the defendant was a solicitor who insisted he was keen to ensure he was acting properly there was no evidence of postage and the documents had not been required to be signed for. The document looked on its face as if it had been concocted to support a convenient argument that the six-month time limit commenced in May 2022. In any event, even if served, the wording of s3 and 3A of the 1985 Act requires that the notice be given by a person who has actually taken assignment of the previous landlord’s interest and not (as in this case) a person in the process of so doing.
Accordingly, a purchase notice served on 7 December 2022 by solicitors acting for the claimant and for a purported majority of the qualifying tenants was not time barred. The court accepted that the defendant’s 11-page counter notice in response was designed to intimidate the purchasing tenants and obscure the true issues. It made a number of allegations such as the non-existence of an individual who purported to be a qualifying tenant and premises not qualifying as residential because they were being sublet or used for the purposes of drug dealing. The contents of the counter notice would have been inappropriate from anyone, but coming from a practising solicitor were disgraceful and inexcusable. The claimant was entitled to compel transfer of the freehold. The judgment was also referred to the Solicitors Regulation Authority.
Elizabeth Haggerty is a barrister
