Nearly Legal: Housing Law News and Comment

Register your s.13 notices

The title of this post lacks much creative input, but sometimes it’s better to be clear than amusing. The recent decision in Regent Wealth Ltd and others v Wiggins [2014] EWCA Civ 1078 is a clear reminder to practitioners to register notices under s.13, Leasehold Reform, Housing and Urban Development Act 1993.

An introduction to enfranchisement

In general terms, long leaseholders of flats are, if there are sufficient of them in agreement, entitled to acquire the freehold of the building containing their flats. They have to appoint a “nominee purchaser” who will carry out the enfranchisement process (normally, but not necessarily, a company that the participating tenants all have a share in). The process starts by serving a notice under s.13, LRHUDA 1993, setting out, inter alia, what they propose to acquire and at what price. The landlord has to serve a counter-notice which (again, in general terms) has to admit or deny that the right to enfranchise can be exercised and/or any counter-proposals (usually as to price). Then, if the dispute is as to entitlement to enfranchise, you go off to the county court to resolve that. If it is as to price, then off to the FTT/LVT with you.

Now, the 1993 Act doesn’t create any sort of statutory contract (cf the position under the Leasehold Reform Act 1967), so there is nothing to stop a landlord dealing with the property after service of a s.13 notice (e.g. by selling the freehold). The 1993 Act deals with this by letting you register your s.13 notice at the Land Registry (s.97, 1993 Act) and, if you do, subsequent dealings by the landlord (e.g. selling the freehold, creating new leases, etc) are void (s.19, 1993 Act).

There is also a power to amend a s.13 notice (with the permission of the court) – see Sch.3.

Facts

This case concerned a block of flats in Central London (Mayfair, no less). Mr Wiggins was the nominee purchaser on behalf of the participating tenants. This wasn’t a “normal” freehold/leasehold situation though, in fact, far from it. There are a quite bewildering number of intermediate leases (the “enforcer lease”, the “overriding lease”). Mr Wiggins had, however, managed to identify them all and claim them in the s.13 notice. A counter-notice was duly served. The s.13 notice was not registered at the Land Registry and the landlords duly granted yet more leasehold interests.

When Mr Wiggins found out about this, he was (I imagine) rather frustrated. The enfranchisement could proceed, but there would be leasehold interests he did not own. He could acquire them later, but that would mean additional cost. And so he hit upon the bright idea of applying to the county court to amend the original s.13 notice so as to include these new leasehold interests.

The county court judge allowed the amendment, and the landlords appealed to the Court of Appeal.

On appeal

The Court of Appeal allowed the appeal. The power to amend in Sch.3 can be used to claim additional interests not specified in the s.13 notice, but only if those interests actually existed as at the date of the s.13 notice. These new leasehold interests had not so existed at that time and so were not within the scope of Sch.3. Whilst one might think (and I’m not saying that the Court of Appeal did think this) that this was sharp practice by the landlords, it was important to note that Parliament had provided protections via ss.19 and 97. The lesson for all practitioners is register your s.13 notices.

 

 

Exit mobile version