Lawtel had an interesting note on a permission to appeal case earlier this week – Mount Eden Land Ltd v Bolsover Investments Ltd (Ch.D, 20.6.14).
Mount Eden Land Ltd (also known as the Langham Estate) had the freehold of an office block. Bolsover Investments Ltd had the remainder of a 999 year lease (running from 1913, so, in practice, loads of time remaining). The lease did not prohibit residential use, but did contain a covenant against alterations without the consent of the landlord. By virtue of the Landlord and Tenant Act 1927 (s.19), that consent could not be unreasonably withheld.
Bolsover applied for consent to convert the building into 16 or 17 residential flats. Mount Eden refused consent because, inter alia, that would open up the possibility of collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993, the effect of which would be to cause Mount Eden to lose the freehold reversion. The trial judge didn’t buy this. It was too speculative a possibility, not least because Bolsover hadn’t actually said that they would let the flats on long leases (a pre-requisite for enfranchisement) and could have decided just to let them at a rack rent (as ASTs if the rent was less than £100,000 p.a. or as contractual tenancies otherwise). Even if they were let on long leases, it was again wholly speculative as to whether enough leaseholders would then band together to try to exercise the right of collective enfranchisement.
The High Court found no arguable error of law in this approach and refused permission to appeal.