Question 1

Is our Garden at Risk?

Accepted Answer

Q: We are three blocks of flats, two storeys high, 21 flats in all. Large garden area, with a row of garages at the back. How does it work if not all lessees are willing to purchase the freehold? This looks likely to be the case. If it needs a majority vote – which we haven’t actually been told – what benefits do those who pay the £6000 have over those who don’t? Is owning the freehold such a valuable asset (eg when it comes to selling one’s property) compared with a 939-year lease? We are concerned that if we do not purchase the freehold ourselves, it may go on the open market, and then the new freeholder would be free to develop a further block of flats on our garden space, which is considerable and one of the attractive features of living here. Is this fear a well-founded one, and do we have any protection? One of our residents has already booked an appointment with a solicitor and we plan to do the same. FPRA Hon Consultant Mark Chick replies: The leaseholder has been sent a section 5(a) notice that its’ freeholder is disposing of its’ interest in the property and it required to first provide the qualifying leaseholders with a right of first refusal to purchase the freehold on the same terms. If the qualifying leaseholders do not serve the acceptance notice the freeholder is then free to dispose of the interest on the open market, but not on different terms or at a price lower than that proposed to the tenants in the section 5 notice. If the qualifying leaseholders wish to take up the offer, the requisite majority must accept. That majority is more than 50 per cent of the qualifying leaseholders and they must serve a notice accepting the landlord’s offer within the period set out in the landlord’s notice. The benefit of leaseholders owing the freehold include right to manage the building, ability to vary your leases to make them more favourable to you as leaseholders, extending lease terms and the power to control what happens to the building and property (subject to agreement between the leaseholders) In relation to the rights to redevelop the property, without seeing the title register we cannot advise on this. There may well be restrictive covenants in the title that limits the ability to develop parts of the land or buildings regardless of who owns the property. Of course, if the leaseholders own the freehold, they may have more control to decide what developments are allowed. [Submitted February 2020]

Question 2

Is our Garden at Risk?

Accepted Answer

Q: We are three blocks of flats, two storeys high, 21 flats in all. Large garden area, with a row of garages at the back. How does it work if not all lessees are willing to purchase the freehold? This looks likely to be the case. If it needs a majority vote – which we haven’t actually been told – what benefits do those who pay the £6000 have over those who don’t? Is owning the freehold such a valuable asset (eg when it comes to selling one’s property) compared with a 939-year lease? We are concerned that if we do not purchase the freehold ourselves, it may go on the open market, and then the new freeholder would be free to develop a further block of flats on our garden space, which is considerable and one of the attractive features of living here. Is this fear a well-founded one, and do we have any protection? One of our residents has already booked an appointment with a solicitor and we plan to do the same. FPRA Hon Consultant Mark Chick replies: The leaseholder has been sent a section 5(a) notice that its’ freeholder is disposing of its’ interest in the property and it required to first provide the qualifying leaseholders with a right of first refusal to purchase the freehold on the same terms. If the qualifying leaseholders do not serve the acceptance notice the freeholder is then free to dispose of the interest on the open market, but not on different terms or at a price lower than that proposed to the tenants in the section 5 notice. If the qualifying leaseholders wish to take up the offer, the requisite majority must accept. That majority is more than 50 per cent of the qualifying leaseholders and they must serve a notice accepting the landlord’s offer within the period set out in the landlord’s notice. The benefit of leaseholders owing the freehold include right to manage the building, ability to vary your leases to make them more favourable to you as leaseholders, extending lease terms and the power to control what happens to the building and property (subject to agreement between the leaseholders) In relation to the rights to redevelop the property, without seeing the title register we cannot advise on this. There may well be restrictive covenants in the title that limits the ability to develop parts of the land or buildings regardless of who owns the property. Of course, if the leaseholders own the freehold, they may have more control to decide what developments are allowed. [Submitted February 2020]

Is our Garden at Risk?

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