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FAQs

GENERAL

Q1. Can Tolhurst Fisher LLP represent me before a Leasehold Valuation Tribunal and Court?

A. Yes, at Tolhurst Fisher LLP our expert team has significant and successful experience representing clients at all stages of Tribunal and Court proceedings.

Q2. Who pays for the Tribunal/ Court proceedings?

A. Unfortunately under the current legislation, we are unable to claim your costs in respect of Tribunal and Court proceedings from the other side unless they have acted in a manner in which the Tribunal or Court would consider to be unreasonable or you are successfully awarded costs in the Court proceedings.. Invariably you would be responsible for these costs. Our team will always provide you with an estimate as to what the costs of such action will be at the outset of any such proceedings.


LEASE EXTENSION

Q1. My landlord is absent/missing. Can I still claim?

A. Yes. If your landlord cannot be found after all reasonable efforts have been made to locate him, then your claim can be resolved in other ways.

If your landlord is an individual and they are bankrupt, then you are entitled to serve the Notice of Claim upon your landlord’s Trustee in Bankruptcy. If your landlord is a company and they are in receivership, then you may serve your Notice of Claim upon the Receiver. Under the 1993 Act, a Trustee and Receiver are as equally bound by the legislation as your landlord.

If your landlord is a company which appears to no longer exist, then its property may have passed to the Crown. We can accordingly make enquiries of the Crown’s Solicitor, the Treasury Solicitor, on your behalf and they will usually be prepared to grant a lease extension to you, at the open market value, provided certain criteria are met. In this instance the entire matter is conducted by way of negotiation and there is no necessity to serve the Notice of claim.

If your landlord is an individual, and simply cannot be located and you are unable to serve your Notice of Claim, you are entitled to apply to the County Court for a lease extension.  Before applying to the court it will be necessary to conduct a reasonable search for your landlord and this can often include placing an advert in your landlord's local paper, appointing a tracing agent and conductiong a search with the probate office. If the Court is satisfied that you have the right to claim a lease extension, then it will grant the extension in your landlord’s absence. The Court will require the matter to be referred to the Leasehold Valuation Tribunal to determine the the premium and terms of the new lease. The matter is then referred back to the County Court and the District Judge will complete on the new lease upon payment of the premium into Court.

Q2. How long will the process take?

A. This depends upon your landlord and the negotiations between the parties in relation to the premium and the terms of the new lease.

A typical lease extension claim should take between four and six months from start to finish. If it is necessary to commence Leasehold Valuation Tribunal or Court proceedings, then this may take longer (up to twelve months or possibly longer in certain situations, particularly due to the time constraints involved).

Q3. Can I sell/assign my lease during the extension process?

A. Yes. The Notice of Claim may be assigned with the flat. The purchaser of the flat will then be able to proceed with the claim immediately without having to wait for two years to meet the ownership qualification under the Act.

Q4. Why do I have to pay my landlord’s costs?

A. The right to claim a lease extension is not intended as a penalty to the landlord. As the landlord has no say whether the tenant claims a lease extension, this provision protects the landlord financially and discourages frivolous repeated claims by the tenant.

Q5. How much will the premium be?

A. The premium will either be negotiated and agreed, subject to your approval, between your valuer and the other side’s valuer or, if agreement cannot be reached, it shall be determined by the Leasehold Valuation Tribunal. If required, we can instruct a valuer who specialises in the area of leasehold reform to carry out a valuation of the flat on your behalf so as to suggest an appropriate premium that should be paid to the landlord for the lease extension.

Q6. What happens if I cannot agree the premium or terms of the new lease with my landlord/tenant?

A. In the event that the parties cannot agree the premium or terms of the new lease, either party may apply to the Leasehold Valuation Tribunal for a determination no sooner than two months from, but within six months of, the date of service of the landlord’s Counter Notice. The two month minimum waiting period between service of the Counter Notice and the ability to commence tribunal proceedings is to provide an opportunity for the parties to engage in meaningful negotiation on the issues.


LEASEHOLD ENFRANCHISEMENT

Q1. My landlord is absent/missing? Can I still claim?

A. If your landlord cannot be found after all reasonable efforts have been made to locate himthis will not be an obstacle to the tenants’ claim for enfranchisement.

If your landlord is an individual who is bankrupt, you may serve the Initial Notice on the Trustee in Bankruptcy. If your landlord is a company which is in receivership then you may service the Initial Notice upon the Receiver. Both the Trustee and Receiver are as equally bound by the 1993 Act as your landlord in terms of service of a Counter Notice and sale of the freehold and any leasehold interest in the property.

If your landlord is a company which appears to no longer exist, then its property may have passed to the Crown. We can accordingly make enquiries of the Crown’s Solicitor, the Treasury Solicitor, on your behalf and they will usually be prepared to sell the freehold to the tenants, at the open market value, provided certain criteria are met. In this instance the entire matter is conducted by way of negotiation and there is no necessity to serve the Initial Notice.

If your landlord simply cannot be found then the Initial Notice obviously cannot be served and it is accordingly open to the tenants to make an application to the County Court to purchase the freehold and any leasehold interest in the property. Before applying to the court it will be necessary to conduct a reasonable search for your landlord and this can often include placing an advert in your landlord’s local paper, appointing a tracing agent and conducting a search with the Probate Office. If the Court is satisfied that you have the right to purchase the freehold and any leasehold interest in the property, then it will make an order for such sale. The Court will require the matter to be referred to the Leasehold Valuation Tribunal to determine the premium and terms of the transfer. The matter is then referred back to the Court and the District Judge will complete the sale and purchase upon payment of the premium into Court.

Q2. How long will the process take?

A. The enfranchisement process naturally varies from one matter to the next and will inevitably depend to a certain extent on the approach taken by your landlord. For an enfranchisement claim conducted under the legislation, a time period of between six to twelve months is not unusual, due to the time constraints involved.

Q3. Can I sell sell/assign my lease during the enfranchisement process?

A. Yes. Individual tenants may sell or assign their leases without invalidating the Notice, provided the appropriate Notices are served.

Q4. What happens to my interest in the freehold when I sell my flat?

A. If the nominee purchaser elected in an enfranchisement claim is a company, formed by Tolhurst Fisher LLP, then you will cease to be a member of the company and the purchaser of your flat would automatically become a member.

Q5. What happens if I do not want to or cannot participate in the enfranchisement claim?

A. Your position will be largely unchanged. However, although you will continue paying ground rent and possibly service charges, the payments will now be made to those tenants or the company who exercised the right to enfranchise.

Q6. Why do I have to pay my landlord’s costs?

A. The right to enfranchise is not intended as a penalty to the landlord. As the landlord has no say whether the tenants claim the right to enfranchise, this provision protects the landlord financially and discourages frivolous repeated claims by tenants.

Q7. How much will the premium be?

A. The premium will either be negotiated and agreed, subject to your approval, between your valuer and the other side’s valuer or, if agreement cannot be reached, it shall be determined by the Leasehold Valuation Tribunal. If required, we can instruct a valuer who specialises in the area of leasehold reform to carry out a valuation of the property on your behalf so as to suggest an appropriate premium that should be paid to the landlord for their interest in the property.

Q8. What happens if I cannot agree the premium or the terms of the Transfer with my landlord/tenant?

A. In the event that the parties cannot agree the premium or terms of the Transfer, either party may apply to the Leasehold Valuation Tribunal for a determination no sooner than two months from, but within six months of, the date of service of the landlord’s Counter Notice. The two month minimum waiting period between service of the Counter Notice and the ability to commence tribunal proceedings is to provide an opportunity for the parties to engage in meaningful negotiation on the issues.


RIGHT TO MANAGE

Q1. How long will the process take?

A. Once the RTM company has served its Notice of Claim, assuming that your landlord admits the RTM company’s right to acquire the management functions of the building, the RTM company should acquire the management function not less than four months from the date of service of the Notice.

Q2. Can I sell/assign my lease during and/or after the right to manage claim?

A. It is possible for you to sell your flat during the right to manage claim but you would have to cease being a member of the RTM company at the point of sale. Accounting for your absence, at least 50% of the qualifying tenant’s must still be members of the RTM company. It would however be possible for your purchaser to become a member of the RTM company immediately upon completion of your sale.

Q3. What happens if I do not want to or cannot participate in the RTM claim?

A. Generally speaking, your position should not change. Although you will continue to pay management charges, you will now pay them to the RTM company instead of to your landlord.

Q4. Why do I have to pay my landlord’s costs?

A. The right to manage is not intended as a penalty to the landlord. As the landlord has no say whether the tenants claim the right to manage, this provision protects the landlord financially and discourages frivolous repeated claims by the tenants.

Q5. What happens to the service charge credits held by the landlord or their managing agents?

A. Outstanding service charge credits must be accounted to the RTM company within a reasonable period of time after the date on which the management is acquired.


TENANTS’ RIGHT OF FIRST REFUSAL

Q1. How long will the process take?

A. When the tenants have been served with the Section 5 offer Notice, they will have until the date stated in that Notice to decide whether they wish to purchase the landlord’s interest (which must be not less than two months). In the case of a private sale (Section 5A offer Notice) the tenants will then have a further period of time (as stated in the Notice, but should not be less than two months) within which to notify the landlord of the nominated person, being the party that will purchase the freehold. In the case of a sale at auction (Section 5B offer Notice), the tenants will only have a period of 28 days within which to notify the landlord of the nominated person.

In the case of a Section 5A offer Notice (for private sale), once the landlord has been notified of the nominated person, that person must be sent a Contract within one month of the notification. The nominated person then has a period of two months to sign and return the Contract and to pay the deposit (which must not be more than 10% of the purchase price). The landlord then has seven days from receipt of the signed Contract to exchange.

In the case of a Section 5B offer Notice (for sale by auction), once the landlord has been notified of the nominated person, that nominated person must send a Notice to the landlord at least 28 days before the auction date electing that the remaining stages of the purchase procedure should still apply. The property will still proceed to auction for sale even though the offer for sale has been accepted. If a successful bid is accepted at the auction, the landlord must send a copy of the Contract to the nominated person within seven days of the auction (the purchase price being no greater than the successful bid at auction) and the nominated person then has a period of 28 days in which to decide whether or not to accept the Contract and pay the deposit required. If it is not accepted within the time frame then it will be sold to the successful bidder.

Q2. Will I have to pay my landlord’s costs?

A. You will only have to pay your landlord’s costs if it is stipulated in the Notice, otherwise each party bears their own costs.

Q3. What happens if I do not want to or cannot participate in the purchase?

A. Your position will be largely unchanged. However, although you will continue paying ground rent and possibly service charges, the payments will now be made to those tenants who exercised the right to purchase.

Q4. Can I sell my share of the freehold after the process is completed?

A. Yes. If the nominated person was a company formed by Tolhurst Fisher LLP then you will cease to be a member of the company and the purchaser of your flat will automatically become a member.

Q5. What happens if I cannot agree the terms of the Transfer with my landlord/tenant?

A. Unlike in a lease extension and a collective enfranchisement claim the tenants have no right to apply to the Leasehold Valuation Tribunal for a determination on any point in dispute. If the tenants are unwilling to accept the terms offered by the landlord then they simply are unable to purchase the landlord’s interest. However, landlords should note that any subsequent disposal of their interest in the property cannot be on better terms than those previously offered to the qualifying tenants.

Q6. What happens if the landlord does not serve Section 5 Notices on their qualifying tenants?

A. Where the tenant’s right of first refusal applies there may be rights of enforcement against the new purchaser, such as forcing a re-sale of the property to the qualifying tenants on the same terms as those given to the purchaser provided that they meet the qualification criteria under the legislation.

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