Mark Chick, who heads up our Leasehold Reform team considers the important question of what happens when there is a dispute about what should (and should not) be included in the landlord’s counter notice when the landlord is claiming a “leaseback” of an area that is not currently held under a long lease.
This follows on from the recent Court of Appeal case of Tibber v Buckley  EWCA Civ 1294.
The importance of asking for leasebacks in the counter notice – and the extent to which the premises need to be defined when doing so
In this case the landlord invoked the leaseback provisions under the 1993 Act in respect of the top floor flat at the property. The flat was one that qualified for the leaseback provisions in the 1993 Act as it was not held on a long lease.
A question arose as to how detailed the landlord’s proposals for leaseback should be in the counter notice. Section 36 confers the right of leaseback.
In Tibber the freeholder had sought in her counter notice to reserve the whole top two floors of the building including the roof and windows and a staircase.
The matter then went to the first Tier Tribunal. Before the tribunal the landlord then argued that other areas should be included in the leaseback (that were not referred to in the counter notice). These included a mezzanine landing, the airspace and the front garden.
The tribunal ruled that the leaseback in question should be on the statutory terms set out in Schedule 9 to the 1993 Act. The terms of this lease were more restrictive and much less extensive in terms of the extent of demise than that claimed for by the landlord.
The landlord appealed. The Court of Appeal agreed with the decision of the tribunal. If the landlord wants to seek to argue for a leaseback that is more extensive than that set out in the statutory leaseback provisions, (as per Schedule 9, Part IV) then this needs to be explicitly stated in its counter notice. The landlord cannot argue after the event for more extensive terms.
However, it is also important to realise that the right to a leaseback under Section 36 is generally to a leaseback of the flat or unit in question. The extent of this is normally expected to be similar to the terms of any letting of that area.
Therefore, seeking a more extensive demise than that held by any occupational tenant or in the inclusion of any property that such a tenant does not have access to under the terms of his/ her lease is likely to meet with short shrift.
This case is an important lesson that the standard right of leaseback is just that – generally a right of a leaseback in respect of the whole or a flat or unit.
If the landlord wants to ask for the reservation of a more extensive area then this needs to be considered very carefully. It also needs to be remembered that if the landlord does not ask for a right of leaseback in his counter notice that he cannot then subsequently do so (see Cawthorn v Hamdan  EWCA Civ 6).
If you would like to know more about leasebacks and what they are then in the context of enfranchisement under the Leasehold Reform Housing and Urban Development Act 1993 then an explanatory article here.
If you would like to discuss any enfranchisement issues whether as a landlord or a tenant then please contact our specialist leasehold reform team by emailing email@example.com or by telephoning 020 7631 4141 and asking to speak to a member of the Landord & Tenant team.