Section 42 notice served to extend lease but wasn't received - complicated situation

vwaltham

I recently discovered that my Nan was the freeholder for 2 maisonettes - she said that she had taken the tenants to court for non payment of ground rent and they paid for a short while before stopping again and it had been about 5 years since she received a payment. I decided to do some digging about the properties and a quick google of the address took me to an auction website that stated one of the properties had recently been sold at auction and a section 42 notice had been served on the freeholder. I was able to view the notice online and it had been sent to my Nan's previous address, she moved a few years ago and has had a lot of health problems (she is 87) so I think she had forgotten all about it.

The tenant had been made bankrupt which is why the property was auctioned off and the new owner of the property appears to be a property investor/developer company. The lease currently has 56 years left on it so really does need to be sorted promptly - the offer made for the lease extension I feel is ridiculously low but I am concerned because of the length of time that has passed since serving the notice my Nan may be forced into accepting the low offer due to missing the deadline?

Am I also right to assume that my Nan can request 10% of the offer to put towards solicitors fees and that the tenant will be liable for her legal fees at the end?

I have really struggled to find any information on this online and the solicitors are reluctant to give any advice before accepting her onto their caseload which will incur charges and I am frightened it may be for nothing.

Any help is greatly received

cattie

These are likely the best people who can answer your query. It's a government funded agency offering advice regarding all aspects of residential leaseholds.
https://www.lease-advice.org/

da_rule

How long ago was the alleged notice served? They have 6 months to apply to the court from the date the counter notice (the notice from the landlord) was due. This date (the counter notice date) would be stated in the s.42 notice (and must be at least 2 months after the date of the notice).

Assuming that the freehold to the properties is registered it’s orobably worth notifying the Land Registry of the change in address as well.

Tom99

[FONT=Verdana, sans-serif]How much will you be risking by appointing a solicitor now? [/FONT]
[FONT=Verdana, sans-serif]The ground rent has to be demanded these days and if so has a demand with the correct address been served on the tenant?[/FONT]
[FONT=Verdana, sans-serif]The solicitor could then advise whether the notice is a valid one, both because of the address and any other aspect which might make the notice invalid. The notice would have been signed by the old tenant but that notice should then have been assigned to the new tenant.[/FONT]
[FONT=Verdana, sans-serif]You can then decide what action to take, whether to do nothing and wait and see, or whether to contact the tenant with some other form of communication.[/FONT]

vwaltham

Thanks for the replies -

The notice was served 8th of August 2017 so a response was due by 8th October 2017. Yes I will advise her to update her address with the land registry.

The solicitor that we have contacted have quoted an initial fee of £500 to investigate the validity of the notice - if they find that it is invalid is my Nan likely to be liable for that charge or can she charge the tenant?

Ground rent was demanded and due to non payment they were taken to court but they again stopped paying and my Nan just gave up I think as her health has been poor.

i have a feeling that the previous owner probably agreed to transfer the lease extension to the new owner to avoid the 2 year ownership rule.

Tom99

[FONT=Verdana, sans-serif]If the notice was invalid I think it should still be possible to still claim costs from the tenant but the process might be:[/FONT]

• [FONT=Verdana, sans-serif]Your solicitor advices you notice invalid[/FONT]
• [FONT=Verdana, sans-serif]You request 10% or £250 deposit from tenant[/FONT]
• [FONT=Verdana, sans-serif]You then tell tenant notice invalid[/FONT]

[FONT=Verdana, sans-serif]Have you received notice of the new tenant or has that gone to your old address?[/FONT]

da_rule

There's a few issues here.

1) What stage is the transfer at? Have you had the notice of assignment (if the sale has completed) or had a request for freeholder information (this is where you'd make the parties aware of the debt)?
2) What does the lease say about services of notices? Does it set out a process for how the freeholder should make the leaseholder aware of a change in address? If so, this needs to be followed.
3) Is the ground rent/service charge in the lease a "if demanded" charge? If so, they only have to pay it if they are asked for it.

In relation to the notice, it will be valid if the leaseholder has been a leaseholder for 2 years and it contains the prescribed information.

The prescribed information is:
1) The name of the leaseholder;
2) The address of the flat;
3) A correspondence address if this is different;
4) Enough information to identify the flat (i.e. the flat address);
5) Lease information (i.e. the date of the lease, the term, the term commencement date and possibly who the lease was made between);
6) The proposed premium;
7) Any proposed new/amended terms for the new lease (if applicable); and
8) The date for the counter notice (must be at least 2 months after service - remember that the service date will not be the date of the notice, it must allow time for delivery).

If any of the above is missing then the notice is not valid and therefore does not have to be responded to. If it isn't valid, you could respond to it now saying that it isn't valid for whatever reason.

If the notice is valid, you have three options:
1) Issue a counter notice and just hope that they don't take you to court (as the counter notice will be out of time) - you could ask for a deposit but again as the freeholder is in the wrong, you may rattle some cages by doing this.
2) Ignore it, and hope that the conveyancing process (plus any time for the new leaseholder to move in and get settled etc) takes enough time for the 6 months to pass.
3) Write to the leaseholder, explaining the situation and ask them if they would consent to an extension for the counter notice. This isn't in the legislation but may be looked on favourably/sympathetically by the leaseholder or court.

The legislation sets out that the leaseholder is only liable for costs after the service of a valid notice, so if it isn't valid its unlikely you can recover the costs, unless the lease allows you to. Some will allow for the recovery of any costs incurred in dealing with notices served (regardless of their validity or purpose).