Individual Lease Extension under the Leasehold Reform Housing and Urban Development Act 1993
| Author | Piers Harrison/David Lonsdale |
| Pages | 165-196 |
OVERVIEW
8.1 The procedure for the acquisition of a 90-year lease extension under Chapter II of the Leasehold Reform, Housing and Urban Development Act 1993 (1993 Act) is similar in general terms to the procedure for collective enfranchisement: service of an initial notice; service of a counter-notice admitting or denying entitlement; an application to court to decide entitlement if necessary, and an application to the First-tier Tribunal (FTT) to decide the terms in the absence of agreement.
COMPETENT LANDLORD AND OTHER LANDLORDS
8.2 Chapter II of the 1993 Act makes a distinction between ‘the competent landlord’ and ‘other landlords’. The distinction is important because the notice will need to be served on the competent landlord who will then act for all other landlords (in the absence of any application by one of them to act separately). Similarly, the premium for the new lease is payable to the competent landlord in the absence of any application by one of the other landlords.
8.3 The competent landlord is the landlord who has sufficient interest himself to grant the lease extension (section 40 of the 1993 Act). It is not, therefore, necessarily either the immediate landlord or the freeholder. One looks at the immediate landlord of the flat in question and asks whether he has a sufficient interest in the premises to grant a 90-year lease extension. If not, then one looks at the interest above that and asks whether that is sufficient to grant an extension. For example, Ed has a lease of a flat which will expire in 71 years less 7 days, Fred is his landlord and his lease will expire in 71 years. Fred’s
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landlord, Greg, is the freeholder. Greg is the competent landlord because Fred does not have sufficient interest to grant the lease extension.
8.4 Anyone with an interest intermediate between the lease of the flat and the competent landlord is relegated to the status of ‘other landlord’ (section 40(4)(c) of the 1993 Act).
8.5 The competent landlord is given power to conduct proceedings on behalf of any other landlords (section 40(2) of the 1993 Act).
GATHERING INFORMATION
8.6 When one is dealing with registered land, it will usually be fairly straightforward to identify the competent landlord from HM Land Registry; where the land is unregistered, it may not be so easy. In any event, the 1993 Act provides for service of a notice compelling a tenant’s immediate landlord or any person receiving rent on his behalf to state who is the freeholder, the extent and duration of the tenant’s immediate landlord’s interest and the name and address of every other person who has a superior leasehold interest (section 41(1) and
(2)). Provision is also made for service of a similar notice on the freeholder and other intermediate leaseholders. Any such notice must also require the recipient to state whether he has received an initial notice for collective enfranchisement and, if so, particulars of the nominee purchaser. Although it is odd to make this a mandatory requirement of such a notice, the obvious purpose is to give the tenant the information to decide whether to pursue a new lease claim if there are already proceedings afoot for collective enfranchisement and, thereby, to avoid a multiplicity of notices. There is no prescribed form of notice. Box 8.1 sets out a notice suitable for service on an immediate landlord.
8.7 The form may be suitably adapted in the case of service on a freeholder or (as the case may be) another landlord. The recipient is obliged to respond within 28 days of being given the notice. Enforcement in the event of non-compliance is through service of a 14-day default notice requiring the default to be remedied and subsequent application to court for an order (section 92 of the 1993 Act).
TENANT’S NOTICE
Service on competent landlord
8.8 The tenant’s notice must be served on the competent landlord and any third party to the tenant’s lease (section 42(2) of the 1993 Act) and copies should be served on other landlords (paragraph 2 of Schedule 11). The notice should also
state which other landlords are being served with copies (paragraph 2(3) of Schedule 11). As to the obligation to serve third parties to the lease, see para 8.17. Although section 42(2) states that the competent landlord ‘must’ be served, Part 1 of Schedule 11 (Procedure in relation to tenant’s notice) provides that service on any of the other landlords will suffice:
Tenant’s notice may be given to any of the other landlords
1. The tenant’s notice under section 42 shall be regarded as given to the competent landlord for the purposes of subsection (2)(a) of that section if it is given to any of the other landlords instead; and references in this Chapter to the relevant date shall be construed accordingly.
Box 8.1 Specimen information notice
INFORMATION NOTICE PURSUANT TO SECTION 41 OF THE LEASEHOLD REFORM HOUSING AND URBAN DEVELOPMENT ACT 1993
Re [address of flat]
To: [immediate landlord]
Take notice that I [ ] am the qualifying tenant of the above flat pursuant to the Leasehold Reform Housing and Urban Development Act 1993.
Pursuant to section 41 of that Act, I require you to give me the following information within 28 days of service of this notice on you:
1. Are you the owner of the freehold interest in the flat?
2. If not, please state (so far as known):
(a) the name and address of the person who owns the freehold interest in the flat;
(b) the duration of your leasehold interest in the flat and the extent of the premises held under such interest;
(c) the name and address of every person who has a leasehold interest in the flat which is superior to your interest.
3. Have you received in respect of [state building containing flat] a notice under section 13 of the Act in the case of which the relevant claim is still current, or a copy of such a notice?
4. If so, please state the date on which the notice under section 13 was given and the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to that claim.
Dated
Signature
[Name and address]
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8.9 This is subject, however, to one important caveat in paragraph 4 of Schedule 11 to the 1993 Act. If the competent landlord or any of the other landlords does not receive a copy of the tenant’s notice before the end of the period specified in the notice for response and he was given a notice under section 41 by the tenant and, in response to the notice under that section, notified the tenant of his interest in the tenant’s flat, the tenant’s notice shall cease to have effect at the end of that period.
8.10 Schedule 11 to the 1993 Act goes on to state (paragraph 4(2)) that in any other case failure to serve or delay in serving either the competent landlord or any other landlord will not invalidate the notice, but the tenant will be liable for any loss suffered. In the case of a failure to serve the competent landlord, this loss could be substantial if the tenant’s notice stated a low premium and the failure to serve led to the competent landlord failing to file a counter-notice in time. In the case of one of the other landlords, he will suffer loss if the competent landlord does not account for his share of the premium.
8.11 Any recipient of the tenant’s notice is also obliged to serve other landlords whom it knows of and are similarly liable for loss in the event of delay or failure. Where the tenant does serve further copies, he should supplement the notice by stating the persons who are being served and notify the tenant of those persons (paragraph 3(3) of Schedule 11 to the 1993 Act).
Conduct of proceedings by competent landlord on behalf of other landlords
8.12 The default position is that any notice given by the competent landlord to the tenant, any agreement between that landlord and the tenant, and any determination of the court or the FTT under Chapter I of the 1993 Act, binds the other landlords. The competent landlord’s authority includes receiving on behalf of any other landlord any amount payable to that person on the extension of the lease. In the event of dispute, the competent landlord or any of the other landlords may apply to the court for directions as to the manner in which the competent landlord should act in the dispute (paragraph 6(1) of Schedule 11).
8.13 However, any landlord can reverse the default position by serving a notice stating his intention to be separately represented and requiring the tenant to pay any sum due to him directly (paragraph 7(1) and (2) of Schedule 11 to the 1993 Act). That being the case, in most cases of dispute any other landlord in dispute with the competent landlord will serve such a notice and act separately.
Missing other landlords
8.14 If any of the other landlords cannot be found, or his identity cannot be ascertained, the competent landlord shall apply to the court for directions and the court may make such order as it thinks proper with a view to giving effect to the rights of the tenant and protecting the interests of other persons. However, subject to any such directions, the competent landlord shall proceed as in other cases.
Competent landlord’s liability
8.15 The competent landlord, if he acts in good faith and with reasonable care and diligence, will not be liable to any other landlord.
Exception for redevelopment claims
8.16 The authority given to the competent landlord by section 40(2) of the 1993 Act to act on behalf of other landlords does not extend to the bringing of proceedings under section 47(1) (application to defeat the tenant’s claim where landlord intends to redevelop) on behalf of any of the other landlords.
Service on third parties
8.17 The...
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