Enfranchisement Case Law Developments

Enfranchisement Case Law Developments

Is the Landlord liable in nuisance for damage caused by a defect in another part of the building that pre dates tenant’s lease?

No. The landlord was successful in rejecting the tenants claim. The Court found the tenant couldn’t rely on the word nuisance to put right pre-existing problems with the building. The court looked at the decision of the House of Lords in Baxter v Camden London Borough Council (1999) where an allegation of nuisance by a flat owner caused by poor sound insulation between the flats was rejected on the basis the flats were in that state when the leases were granted. The Court of Appeal earlier in the same matter stated that there is no implied covenant that a property is fit for purpose. So for tenants taking a new lease it is a case of “buyer beware”.

Can the tenant of a lease which contains a flat (or flats) plus common parts claim a new lease in respect of the flat(s)?

Yes. The case of Howard De Walden Estates Limited v Les Aggio and others (2007) decided that the holder of the lease comprising a flat(s) and common parts doesn’t constitute a “qualifying tenant of a flat” for the purpose of the act in respect of the flat(s) and therefore doesn’t qualify for a new extended lease in respect of such flat(s) under the Leasehold Reform Housing and Urban Development Act 1993 (as amended) however that decision has just been reversed so if you are considering enfranchising your freehold collectively and an intermediate interest like this exists which you are not entitled to acquire then you can not expect to obtain vacant possession of the parts demised by that lease at the end of its contractual term as you would have before.

Can a landlord avoid the obligation to grant a new extended lease on the basis it proposes redevelopment?

It depends on whether the redevelopment works affect a substantial part of the premises that contain the flat in question. Putting a broom cupboard or other small element of common parts or even another flat with the flat in question to redevelop them together is unlikely to be enough. The court would look at the flat from a layman’s point of view when asking itself what a “substantial part of the building is”. The House of Lords in its recent decision from a hearing on 15 November 2007 in the case of Majorstake Limited v Curtis has closed off the ability for the landlord to defeat the flat owners claim on the basis that he proposes putting only a small area of property with the flat concerned to be redeveloped ie: small element of common parts or a broom cupboard to then realise the capital gain from a simple refurbishment and sale of the same flat.

The statutory test requires that the re-development contemplated by the landlord affects “the whole or a substantial part of any premises in which the flat is contained”. The House of Lords applied a layman’s interpretation as what a substantial part of the premises comprising the flat might be and effectively concluded that this in most cases will be the block comprising the flat rather than a part of a floor or even a whole floor of the block so the landlord to get home on this basis would have to have control of the redevelopment of the whole of the building ie: have a situation where all the leases are to fall in at the same time.

Will the flat owners acquire as part of the enfranchisement process a caretaker’s flat held under a head lease?

No. The Lands Tribunal in the case of 29 Eaton Place decided that the headlease concerned wouldn’t be mopped up with all the other intermediate leasehold interests in the building as part of the enfranchisement process but would instead survive so that the enfranchised freehold would be acquired subject to the lease of the caretakers flat.