Notices

This page contains details of a number of authorities dealing with notices in enfranchisement cases.

 

Address for service of notice under 1993 Act

Glen International Limited v Triplerose Limited

[2007] EWCA Civ 388

The issue in this case was whether a notice under section 42 of the Leasehold Reform Housing and Urban Development Act 1993 had been served at the correct address. The 1993 Act requires that, should the landlord have given an address for the service of notices under the Landlord and Tenant Act 1987 then notices under the 1993 Act should be served at that address. The court found that an address stated to be the landlord's address for correspondence in a particular letter sent by the landlord's agent to the tenant's solicitor in the course of correspondence concerning dilapidations and insurance could not be considered to be the landlord's address for the service of notices under section 48 of the Landlord and Tenant Act 1987.

 

Counter-notices

Burman v Mount Cook Land Ltd

[2001] EWCA Civ 1712

Where a tenant wishes to acquire a new lease of a flat he must serve a notice on the landlord under s42 of the Leasehold Reform and Urban Development Act 1993. The landlord must then serve a counternotice under s45 which requires certain information including a clear statement as to whether or not he admits that the tenant has the right to claim a new lease. The landlord served a counter-notice headed Landlords Counternotice Section 45 which stated that the landlord did not accept the tenants proposed premium. It specified a counter-proposal. However, it did not expressly state whether the landlord did or did not admit the tenants right to a new lease.

Held

The landlords counternotice is an integral part of the process - the scheme requires that the tenant be left in no doubt as to the landlords position. The counternotice that was served was invalid. The consequence was that the tenant was entitled to apply under s49 for an order that the court determine the terms of the purchase in accordance with the proposal in the tenants notice.

 

Counter-notice and estate management schemes

7 Strathray Gardens Ltd v Pointstar Shipping and Finance Ltd

[2004] EWCA Civ 1669

Regulation 4 of the Leasehold Reform (Collective Enfranchisement) (Counter-notices) (England) Regulations 2002 (SI 2002/3208) states that: "A counter-notice given under section 21 (reversioners counter-notice) of the 1993 Act shall contain (in addition to the particulars required by that section) a statement as to whether or not the specified premises are within the area of a scheme approved as an estate management scheme under section 70."

In this case the landlord failed to state in its counter-notice whether the premises were in the area of a scheme approved as an estate management scheme under s70. In fact, the premises were not in such an area, and so the counter-notice should have contained a negative statement to that effect. However, the failure to make this statement was not fatal. The requirement to make the negative statement was not mandatory. There was no possible prejudice to the lessees or the nominee purchaser as a result of the absence of the information. Ward LJ, para 57:

    ".. a failure to declare that there is no EMS affecting the property cannot be of such importance that the omission should render invalid a notice which in all other respects is accurate and effective. As for the prospects of successfully recovering damages for any wasted expenditure incurred as a result of such an omission, I can see the interesting arguments both ways but as the question was only raised late in the day and full argument was not directed to it, I would prefer not to express even a tentative view."

Counter notice - realistic price

9 Cornwall Crescent London Ltd v Kensington and Chelsea Royal London Borough

[2005] EWCA Civ 324

An initial notice in a collective enfranchisement case, served under s13 of the 1993 Act, will be invalid if it specifies an unrealistic price (Cadogan v Morris [1999] 1 EGLR 59 - see further immediately below). However, the same rule does not apply to a counter-notice served by a landlord under s21. The reason for this is that the unrealistic figure in a landlords notice can never become the enfranchisement price by default so that no safeguard is required.

In this case the initial notice had specified £210. The counter-notice based upon a valuation report from an inhouse surveyor specified a price of £130,000.

 

Effect on lease of notice

Notice in respect of single flat within lease of whole building

Ackerman v Lay

[2008] EWCA Civ 1428

Summary

The Court of Appeal held that where a notice is served under s42 of the LRHUDA 1993 claiming a new lease of a single flat comprised within a lease of a whole building, the effect of the notice was to continue that lease post contractual expiry in respect of the flat alone, and not the whole building. Accordingly, the further claim made later under s8 of the LRA 1967 to acquire the freehold of the entire building failed.

Facts

In summary the tenant had a long lease of a house and lived in one of five flats in that house. He served a s42 notice seeking an extended lease of the flat under the 1993 Act.

The landlord opposed that claim on the grounds that it wanted to redevelop. The tenant then served a notice under s8 of the 1967 Act seeking to acquire the freehold of the house and the claim based on s42 was stayed. In between service of the s42 notice and the notice under the 1967 Act the original term of the lease of the house had expired by effluxion of time. The landlord argued that the claim under the 1967 Act was defective as there was no longer a tenancy of the whole of the house to which the 1967 Act applied. The tenant argued that the effect of the s42 notice was to “keep alive” not only the lease of the flat but also the house. The point turned on the construction of paragraph 5 (1) of schedule 12 of the 1993 Act. HHJ Cowell held that the effect of that paragraph was only to continue the lease of the flat.

Decision

The Court of Appeal agreed. Paragraph 5 (1) of schedule 12 is in the following terms:

    "(1) Where by a notice under section 42 a tenant makes a claim to acquire a new lease of a flat, then during the currency of the claim and for three months thereafter the lease of the flat shall not terminate –
      (a) by effluxion of time, or (b) in pursuance of a notice to quit given by the immediate landlord of the tenant, or (c) by the termination of a superior lease;
    but if the claim is not effective, and but for this sub-paragraph the lease would have so terminated before the end of those three months, the lease shall so terminate at the end of those three months.”

You can see the tenant’s problem. It says “the lease of the flat”. Sir William Aldous said as follows:

    “The first stage to a decision on construction must be consideration of the statutory language. Thereafter it is appropriate to look at the other provisions of the Act and practical results to see whether they require a different conclusion. I, like the judge, believe that paragraph 5 of the schedule 12 of the 1993 Act is clear. The lease that is continued is the lease of the flat the subject of the claim and only that lease.”

Inaccuracy

Speedwell Estates Ltd v Dalziel

[2001] EWCA Civ 1277

A person who wishes to acquire the freehold of his house under the Leasehold Reform Act 1967 must serve a notice in prescribed form, which must contain certain specified particulars. Paragraph 6(3) of Schedule 3 provides that any inaccuracy in such particulars will not invalidate the notice. Perfection is not therefore mandatory. However, the tenant is required to give particulars and not simply to leave the relevant spaces blank.

Applying the principles to Mannai Investments Co. Ltd v Eagle Star Life Assurance the Court of Appeal held that the failure correctly to specify the relevant leases and to give the rateable values of the properties did not invalidate the notices. However the complete failure to provide the details of the periods of residential occupation was a failure to provide information which is among the most important the tenant has to provide and which in many cases would not be within the landlords knowledge. A failure to provide particulars can be an inaccuracy but these failures went too far. The notices were therefore invalid.

 

Raymere Ltd v Belle Vue Gardens Ltd

[2003] EWCA Civ 996

Where an initial notice has been given the reversioner can require the nominee purchaser, in the case of any participating tenant, to deduce the title of that person to the lease by virtue of which it is claimed that he is a qualifying tenant (s20). In this case the information was not accurate, in that out of date office copy entries were supplied. The reversioners argument that this invalidated the whole procedure requiring a fresh notice was rejected:

    ".. in my view the words shall comply with any such requirement where they appear in section 20(2) require that the nominee purchaser does, at the very least, take positive steps in good faith, to produce good evidence or material to deduce title. Preferably and properly, that evidence or material should be perfect and conclusive. But the nominee purchaser cannot be said to have failed to comply, so as to trigger section 20(3) and the deemed withdrawal, merely because the evidence or material supplied is less than perfect and conclusive. (Holman J, para 70)".

Lay v Ackerman

[2004] EWCA Civ 184

A counter-notice served under s45 of the Leasehold Reform, Housing and Urban Development Act 1993 was valid even though the notice wrongly identified the landlord. The landlord was named as Portman Family Collateral Settlements instead of Portman Family Settled Estates. A reasonable person in the position of the tenant would know that the notice was sent by and with the authority of the landlord.

 

Notice - validity

Earl Cadogan v Strauss

[2004] EWCA Civ 211

A notice indicating a desire to enfranchise under the Leasehold Reform Act 1967 failed to mention an earlier lease which demised part of the property to the tenant. This constituted an inaccuracy in the particulars but the notice was saved by para 6(3) of the Schedule 3 to the 1967 Act.

 

Time for service of notice by reversioner requiring leaseback

Cawthorne v Hamdan

[2007] EWCA Civ 6

In a collective enfranchisement situation the landlord can, in some circumstances, serve a notice requiring that parts of the freehold or parts held on short leases be leased back to him rather than acquired by the purchasers. This case raises the question of whether a landlord who fails to put his leaseback proposals in his counter-notice can raise it after the LVT has determined the price. If he were allowed to raise it at a later date then this would result in the LVT having to review its decision on price. The Court of Appeal held that he could not raise it later - it had to go in the counter-notice. The argument centred on two apparently conflicting provisions of Leasehold Reform Housing and Urban Development Act 1992.

Section 21 (3) provides as follows:

    "(3) If the counter-notice complies with the requirement set out in subsection(2)(a), it must in addition- (a) state which (if any) of the proposals contained in the initial notice are accepted by the reversioner and which (if any) of those proposals are not so accepted, and specify-
      (i) in relation to any proposal which is not so accepted, the reversioner's counter-proposal, and (ii) any additional leaseback proposals by the reversioner;"

Schedule 9, para 5 provides as follows:

    "5(1) Subject to sub-paragraph(3), this paragraph applies to any unit contained in the specified premises which is not immediately before the appropriate time a flat let to a person who is a qualifying tenant of it. (2) Where this paragraph applies, the nominee purchaser shall, if the freeholder by notice requires him to do so, grant to the freeholder a lease of the unit in accordance with section 36 and paragraph 7 below."

Thus, s21 required the landlord to put any leaseback proposal in the counter-notice. However, Sched. 9 appeared to allow a freeholder to serve a notice at any time when a flat was not let to a qualifying tenant.

In order to avoid an obviously undesirable outcome, of the landlord being allowed to serve a notice after the LVT had determined the price payable and thus requiring a re-determination of the price, the Court of Appeal construed s 21 as being a mandatory requirement. So a landlord must put a leaseback proposal in his counter-notice. The reference in Sched.9, para.5 to "the appropriate time" does not show that a leaseback notice can be served at any time up to that moment. Rather, that paragraph is in effect a proviso to the effect that the leaseback only has to be granted if both at the date of the counter-notice and at the appropriate time the flat is not let to a qualifying tenant. The reference to a notice in sub-para (2) is necessarily therefore to the counter-notice. This is a sensible result arrived at through what may fairly be called a strained construction of the Act. (See in particular paras 28 and 30 of the judgment).

 

Transfer of reversion

Effect on initial notice if not registered

Curzon v Wolstenholme

[2017] EWCA Civ 1098

Summary

A collective enfranchisement initial notice ceases to have effect where it is not registered and the freehold is transferred to a third party and then subsequently re-transferred. This decision throws the importance of registering the tenants’ interests at the Land Registry in to very sharp relief.

 

 

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