The Leasehold Reform, Housing and Urban Development Act 1993 gives qualifying leaseholders the right to join together to buy the freehold of their properties – a process known as collective enfranchisement. A recent case demonstrated that this right can be exercised even when the landlord cannot be found.
The leaseholders of two flats in a terraced house wished to purchase it from the landlord, but were unable to ascertain his whereabouts and therefore could not serve notice on him under Section 13 of the Act. They therefore applied for an order under Section 26(1) of the Act vesting the freehold of the house in them. The order was granted by a Deputy District Judge, and included a provision requiring that the leaseholders apply to the First-tier Tribunal (FTT) for determination of the price payable for the freehold and the amount of any rent that remained unpaid.
The leaseholders relied on evidence from a surveyor in support of their application. This was accepted by the FTT, which determined that the price to be paid for the freehold was £16,843. In the absence of the landlord, this would be paid into court.
The FTT found that the ground rent payable in respect of each flat would be £2,209 if it had been properly demanded but never paid. However, the FTT was not satisfied that the landlord had given the leaseholders an address at which notices could be served, as required by Section 48(1) of the Landlord and Tenant Act 1987. As such, any rent that would otherwise have been due fell to be treated as not being due, by virtue of Section 48(2) of the Act.