Share of freehold bought without consent of freeholder?

HiroA

I have made further communications with the lawyer who gave me the advice and he said that in this instance an enfranchisement claim would be a little unusual as one of the freeholders would be a party to the claim - but if it were indeed, I would have a solicitor representing me, and A and B would have their own solicitor, and in terms of landlord's counter notice my solicitor would liaise with A via their solicitor so it may be more time consuming.  In this case I will need to watch my legal fees seriously as although most may be recoverble, I would still only receive 50% of the premium. 

eddddy

HiroA said:

I have made further communications with the lawyer who gave me the advice and he said that in this instance an enfranchisement claim would be a little unusual as one of the freeholders would be a party to the claim - but if it were indeed, I would have a solicitor representing me, and A and B would have their own solicitor, and in terms of landlord's counter notice my solicitor would liaise with A via their solicitor so it may be more time consuming.  In this case I will need to watch my legal fees seriously as although most may be recoverble, I would still only receive 50% of the premium. 

Yes - you would receive 50% of the premium, because you own 50% of the freehold. (The other 50% would go to A.)

Usually, as a joint-freeholder, A and B would have to pay your 'reasonable' legal bills when buying the freehold. If A and B don't think your legal bills are 'reasonable', they can challenge them through the tribunal.

But given the unusual circumstances, your legal bills might end up higher than usual - so the tribunal might or might not decide that it's not 'reasonable' for A and B to pay the full amount.



Edit to add...

Assuming A and B go ahead and make a claim...

In your position, I would ask the solicitor you're dealing with if they have dealt with a situation like this before.

If they haven't, it might be worth looking around for a solicitor with prior experience of this - as they might have a better idea of how a tribunal would deal with this.

Because this kind of situation would be very rare.

HiroA

I've received a S13 notice for collective enfranchisement via email this afternoon, from their freehold company, via their solicitor.

I've also received a reply from other solicitor. She said that as a qualifying leaseholder, I have a right to participate in the collective enfranchisement - the law allows me to join in! I can do so by serving Notice of Participation before the freehold is transferred, so that I own the third of the freehold.  

She also said that although the new Act has not yet come into force in relation to many aspects, it has already abolished the requirement for leaseholders to pay freeholders costs.

eddddy

HiroA said:

I've also received a reply from other solicitor. She said that as a qualifying leaseholder, I have a right to participate in the collective enfranchisement - the law allows me to join in! I can do so by serving Notice of Participation before the freehold is transferred, so that I own the thrid of the freehold.  

She also said that although the new Act has not yet come into force in relation to many aspects, it has already abolished the requirement for leaseholders to pay freeholders costs.

So that seems to contradict what the first solicitor told you (and it contradicts my understanding, as well).

My understanding is...

• A 'notice of participation' relates to the 'Right to Manage', not to 'Collective Enfranchisement'

• The new Act already prevents freeholders from claiming their legal costs through Service Charges - but that doesn't apply to lease extensions

But if an experienced leasehold solicitor has said otherwise, maybe you should go back to the first solicitor and say that the second solicitor is fundamentally disagreeing with some of what they said - and see what the first solicitor says.

HiroA

eddddy said:

HiroA said:

I've also received a reply from other solicitor. She said that as a qualifying leaseholder, I have a right to participate in the collective enfranchisement - the law allows me to join in! I can do so by serving Notice of Participation before the freehold is transferred, so that I own the thrid of the freehold.  

She also said that although the new Act has not yet come into force in relation to many aspects, it has already abolished the requirement for leaseholders to pay freeholders costs.

So that seems to contradict what the first solicitor told you (and it contradicts my understanding, as well).

My understanding is...

• A 'notice of participation' relates to the 'Right to Manage', not to 'Collective Enfranchisement'

• The new Act already prevents freeholders from claiming their legal costs through Service Charges - but that doesn't apply to lease extensions

But if an experienced leasehold solicitor has said otherwise, maybe you should go back to the first solicitor and say that the second solicitor is fundamentally disagreeing with some of what they said - and see what the first solicitor says.

I know, no other legal experts have said this, but I think the Notice of Particiation here is different from a "notice of invitation to participate' in relation to RTM - I think "notice of invitation to participate' is a notice that RTM company must serve to all qualifying tenants.

What she explained was that now that S13 has been served I am now a qualifying leaseholder who has not participated in the initial claim and therefore the law allows me to serve a notice on the nominee purchaser (A & B's company) at any time before the freehold is transferred. This notice states my desire to become a participating tenant and compels them to include me. She was surprised by their S13 notice as she was sure their solicitor knew this ( I must say this contradicts the  “ping-pong problem” you mentioned in your earlier post also)

I have emailed my first solicitor about this Notice of Participation so let's see what he says.  I have also booked another appointment with LEASE. 

eddddy

HiroA said:

The other concern is that their S13 notice includes a request to purchase front and back gardens that belong to B's flat.  Can they do this?  B has not been maintaining these gardens a lot, especially the hedges in the front garden, I won't be using it at all, and if this happens we would be paying for the maintenance for B to mainly continue to have their noisy late night parties.  There are lots of very tall trees which may need cutting in the near future.

The terms of the leases would remain unchanged.

For example, if the leases say that B has exclusive rights to use the gardens and that B is responsible for maintaining them (and paying for that maintenance), then that would continue to be the case.


Or for example, if the leases say that the trees are on communal land, which the freeholder is responsible for maintaining and the cost of maintenance is split between leaseholders - then the new freeholders (A and B ) take over that maintenance responsibilities, and can split the cost between the 3 leaseholders (you, A and B ). 

HiroA

I have spoken to an advisor from LEASE who refereed the matter to the most senior advisor.
There is exemption to serve Notice of participation but does not apply to me.

They said that their S13 notice will be invalid as according to the current law, (Leasehold Reform, Housing and Urban Development Act 1993) the person who is already a freeholder cannot be treated as a qualifying tenant and cannot also enfranchise it against themselves as the act is designed to allow the qualifying leaseholders to acquire the freehold from an external freeholder (there is a case to confirm this Cade vs Izard, 2000) otherwise there will be conflict of interest and people can use it to fight with each other and it defies the purpose that the act was set up for.

I may take this route - I wonder if I can just email their solicitor to say it is invalid or do I need to submit a form?

eddddy

HiroA said:

I may take this route - I wonder if I can just email their solicitor to say it is invalid or do I need to submit a form?

Stuff like this isn't as clear-cut as you might imagine.



You can tell their solicitor that, in your legal adviser's opinion, the notice is invalid.

Their solicitor might review the situation and decide that they agree that the notice is invalid. Or their solicitor's opinion might still be that the notice is valid, and continue.


If their solicitor's opinion is that the notice is valid, and they continue to tribunal...

• You (or your solicitor) would explain to the tribunal judge why you think the notice is invalid. 
• Their solicitor would explain to the to the tribunal judge why they think the notice is valid. 

... and the tribunal judge would decide which side they agree with.


Something to check... if the notice is deemed invalid (so no valid application has been made), can you still claim your legal expenses from the other party?

pinkshoes

This all sounds very complicated...

What do you actually want to happen? What is your proposed solution?

HiroA

eddddy said:

HiroA said:

I may take this route - I wonder if I can just email their solicitor to say it is invalid or do I need to submit a form?

Stuff like this isn't as clear-cut as you might imagine.



You can tell their solicitor that, in your legal adviser's opinion, the notice is invalid.

Their solicitor might review the situation and decide that they agree that the notice is invalid. Or their solicitor's opinion might still be that the notice is valid, and continue.


If their solicitor's opinion is that the notice is valid, and they continue to tribunal...

• You (or your solicitor) would explain to the tribunal judge why you think the notice is invalid. 
• Their solicitor would explain to the to the tribunal judge why they think the notice is valid. 

... and the tribunal judge would decide which side they agree with.


Something to check... if the notice is deemed invalid (so no valid application has been made), can you still claim your legal expenses from the other party?

If I can tell their solicitor that,  then I think I will just do so.  I won't be using lawyers at the Tribunal, I just won't be able to afford c£250 plus VAT per hour. I think the explanation from LEASE sounds convincing enough. They also told me that I can also take A to county court to stop this as A cannot do this under Trust of Land and Appointment of Trustees Act 1996 - he can't enfranchise it like this  (although I don't think I will do this).pinkshoes said:

This all sounds very complicated...

What do you actually want to happen? What is your proposed solution?

My proposed solution is that the notice is invalid and we make voluntary or other valid arrangement so that we all have thrid of the freehold - but ideally, I would be happy to just extend B's lease.