Bishop & Sewell

Just following up on a question raised during the Q and A session at the ALEP conference 2020 on 15th October 2020

The question concerned the rights of shared ownership tenants to extend their leases.

The position is unclear as the relevant case law shows. Whilst the Brick Farm case (see notes below) held that shared ownership leases were qualifying tenancies for the purposes of the 1993 Act as regards collective enfranchisement, so far as I am aware there is no reported case where a shared ownership lease has been the subject of a statutory lease extension under the 1993 Act.

I know that various housing association providers will do lease extensions on a voluntary basis and there is commentary on this in the Law Commission’s Consultation Paper (see paragraphs 9.24 onwards). However I am of course putting this out there so that if anyone knows different they can shout about it.

As we said in the session, if the position was completely clear cut then the Law Commission would not have mentioned both in the Consultation Paper and in their July report that the position needed to be clarified. They also recommend in both documents that future legislation addresses this issue- so that owners of shared ownership leases who have not staircased up to 100% should be able to extend under statute.

That is course leaves the slightly vexed question of how such lease extensions are to be valued. I was very glad that we had Richard Kay in our session so that I was able to pass this hypothetical question over to him.

That is one other thing that any proposed reforms will have to address when looking at the options to reform the valuation mechanism(s) for statutory cases.

Mark Chick

15th October 2020

The above is accurate as at 15 October 2020. The information above may be subject to change during these ever-changing times.

The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.

Mark Chick Senior Partner   +44 (0)20 7079 2415

Category: Blog | Date: 16th Oct 2020

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