You are the leaseholder or proposed purchaser of a flat or house where the freeholder is in Liquidation or Administration and want to know if the lease can be extended, or block of flats or house enfranchised?
Freeholder in Administration. Can tenants or purchasers still extend leases or enfranchise?
Where a freeholder is in Administration, an agent acting on its behalf is required to deal with claims for lease extensions or enfranchisement in the same way as the freeholder would have done. It follows, that subject to satisfying the qualifying criteria, leaseholders can still extend the lease of a flat; or participate in a block enfranchisement, both under the Leasehold Reform, Housing and Urban Development Act 1993; or enfranchise a house under the Leasehold Reform Act 1967.
Freeholder in Administration. Qualifying criteria.
For details of the qualifying criteria, see Can the lease be extended? for lease extensions of flats; Can we enfranchise our block? for enfranchisement of blocks; and Can the house be enfranchised? for enfranchisement of houses.
Freeholder in Administration. What premium or price will I have to pay?
We are able to provide valuation advice on the premium you are likely to have to pay for extending the lease of a flat; or price for participating in a block enfranchisement, or enfranchising your house. See What premium will I have to pay? for lease extensions of flats; What price will we have to pay for the block? for enfranchisement of blocks; and What price will I have to pay for the house? for enfranchisement of houses.
Freeholder in Liquidation. Can tenants or purchasers still extend leases or enfranchise?
When a company that owns a freehold has been dissolved, its assets, including the freehold pass to the Crown under the ancient English legal principle of “Bona Vacantia” (meaning literally ‘good vacancy’). An application may be made by one of the lessees under Section 24 of the Landlord and Tenant Act 1987 which provides any leaseholder in a building where its freeholder has ceased to exist, with the right to apply to the First Tier Tribunal (Property Chamber) for a manager and receiver to be formally appointed. Following this, the Treasury Solicitor, the official government solicitor acting on behalf of the Crown, often serves a notice upon the lessees to disclaim the Crown’s interest in the freehold. This means that the original freehold ceases to exist and a new form of freehold of the building reverts back to the Crown, but without any obligations, such as to manage, maintain and insure etc, so at this point flats or houses are often difficult to sell.
The Crown do not have to comply with the requirements of Leasehold Reform legislation. However, in other cases we have dealt with where they have been freeholder, there has been a voluntary policy to act within the spirit of the 1993 and 1967 Acts, and they are normally willing to do so. It is often possible to obtain a copy of the policy (if there is one) setting out the way they deal with lease extension and enfranchisement Claims.
If the Crown are prepared to extend the lease, or sell the Nominee Purchaser the freehold on a voluntary basis, within the spirit of the 1993 or 1967 Acts as appropriate, this avoids the normal need for formal Notice to be served, as would be the case if the Crown were not the freeholder, and the legal fees of the lessee / Nominee Purchaser may be lower than otherwise. It is possible, that depending on the Crown’s Policy, an Arbitrator of Expert may determine any disputes over the premium / price, or conveyance, rather than the First Tier Tribunal (Property Chamber), as would be the case under the provisions of the 1993 and 1967 Acts.
Our services: We are able to advise on the premium you are likely to have to pay for the extension of a lease of a flat; or price for participating in a block enfranchisement, or enfranchising a house, in all cases where you are the leaseholder or purchaser. We are able to advise on the process that should be followed where the freeholder is in Administration; or where the company owning the freehold has been liquidated. We are Chartered Surveyors, Regulated by RICS, with Registered Valuers that are experts in lease extensions and enfranchisement. We are also able to provide further information in relation to situations where the freeholder is in Liquidation or Administration.
