Duncan Lewis

Residential Property

Commercial Property

In a recent case in the High Court of Justice an interesting point on enfranchisement law was clarified.

Date: (12 June 2012)    |    

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The lessee claimants of Barrie House consisting of 37 flats in West London opposite Kensington Gardens had served an Initial Notice under the Leasehold Reform Housing and Urban Development Act 1993 seeking collective enfranchisement of the free holding of the building along with the gardens and the driveway to the property.

The defendant freeholder accepted their request for the building but objected to the enfranchisement of the gardens and the driveway.

While the issue of complete enfranchisement was pending the freeholder got a planning permission to undertake some development work on the building involving creation of two light wells at the front of the building to two basement units, a flat and a space to be used as an office.

The lessee claimants sought an injunction to prevent the landlord continuing with these development works on the basis that (a) there would be a substantial interference with the easement to use the front gardens and (b) that the work amounted to an implied breach of statutory duty by the freeholder under the 1993 Act as an Initial Notice had been served.

Their concern was that the work would interfere with the character of the property they wanted to acquire which value was to diminish by the time of acquisition. Since the purchase price was decided by law from date of the Notice, it meant that the price they would be paying would be unfairly high. They argued that to protect the leaseholders’ interests the 1993 Act implies a duty on the freeholder not to carry out any material alteration to the premises after the initial notice, unless otherwise mentioned in the lease.
In his judgement, Mr Justice Roth decided in favour of the landlord on both grounds and said that no such implied duty existed. The Court decided that Section 19 and Paragraph 6 of Schedule 3 of the 1993 Act already provided sufficient anti-avoidance protection for the leaseholders. Further, even if the value of the property diminished, the leaseholders could withdraw their claim if they were unwilling to pay the price for the freehold of the building.

Finally, on the particular facts, the Court found and even suggested the value of the freehold may be enhanced after the works were completed.

Such a duty could freeze any development of the building for the duration of the enfranchisement proceedings even though the leaseholders may never actually acquire the freehold.

 

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Duncan Lewis Blog - Posted By: on 13 July 2011 at 16:20

Very nice to see. Andre worked on my case when she was a trainee solicitor and did a fantastic job on my crime matter. I am glad to see that she is progressing in the firm and wish her all the best in the future.