If your freeholder is genuinely missing and cannot be found then there are two possible lines of approach that you can take.
The first is under the 1993 Act (the Leasehold Reform Housing and Urban Development Act 1993). Under this act if the flat owners in a building act collectively then they can purchase the freehold on terms that are similar to those when the freeholder’s identity is known.
However, there are certain key differences and these are:-
If you are able to make a claim on this basis you will need to show the Court that you would otherwise be able to make a claim to the freehold (apart from the fact that the landlord is missing) and the Court will then send your case to the First Tier Tribunal of the Property Chamber (‘FTT”) for them to determine the price to be paid.
If an order is made and the funds are paid into Court then the court will effectively sign a transfer of the freehold over to you. As the action is collective it is likely (if there are more than two or three flats) that you will need to form a company (which we can help with) called a ‘nominee purchaser’ to hold the freehold once it is transferred to you.
The second way in which you can buy your freehold if the landlord is missing may be under the Landlord and Tenant Act 1987. Under the provisions of this act if:
Then the tribunal can order that the freehold is transferred to you.
Just like under the 1993 Act, this is a collective activity (i.e. you cannot do this on your own), however, you simply need a majority (i.e. more than 50%) of the long leasehold owners to take part in the process.
If the landlord is truly absent, it is very likely that there will be significant breaches of management obligations and so, it should be possible to ask a Court to make an order that the case is transferred to the FTT to determine the price to be paid.
Under the 1987 Act process an initial ‘default notice’ needs to be served. However, if the freeholder is genuinely missing it may be possible to seek an order avoiding the need to do this.
The route to appointing a manager is another step that can be taken under the 1987 Act, which allows the successful leaseholders to appoint their own expert manager (a property professional such as a managing agent) in place of the landlord, if a number of preliminary steps are taken. If this is done successfully and the arrangement remains in place for two years, the flat owners can then go on to make an application to buy the freehold.
If the tribunal makes an assessment of the price payable under the 1987 Act then this can be of some significant advantage, as there is generally no marriage value to pay in the compensation for the landlord’s interest. Therefore, if the leases are ‘short’ (i.e. under 80 years) then there may be a cost saving in proceeding in this way.
If you would like to know more about this process, or would like to make an assessment of which may be the right route for you then contact us to discuss how we may be able to help by emailing email@example.com
Team members Stuart Merrison, Chris Macartney and Mark Chick are holding an ‘advice surgery’ with the E17 Warner Residents’ Association on 24 January 2017. The meetings focus on initial advice and signposting and are only available on a pre-booked basis via the residents’ association. If you have a leasehold enquiry and would like to know… Read more »