Share of freehold bought without consent of freeholder?

eddddy

HiroA said:

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.  

So try proposing that to A and B.

Perhaps tell them that...

You've taken legal advice, and that advice is that their claim is invalid, and you will tell the tribunal that it is invalid. So it's likely that the tribunal will rule that the claim is invalid.

So they will fail to buy the freehold, and they will have thousands of pounds in legal fees to pay.

(You could also say that they might have to pay your legal fees as well.)


But if their solicitor insists that their claim is valid, they might ignore you and go ahead anyway.

HiroA

eddddy said:

HiroA said:

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.  

So try proposing that to A and B.

Perhaps tell them that...

You've taken legal advice, and that advice is that their claim is invalid, and you will tell the tribunal that it is invalid. So it's likely that the tribunal will rule that the claim is invalid.

So they will fail to buy the freehold, and they will have thousands of pounds in legal fees to pay.

(You could also say that they might have to pay your legal fees as well.)


But if their solicitor insists that their claim is valid, they might ignore you and go ahead anyway.

Do you mean their solicitor can ignore me and go ahead with the freehold purchase?

eddddy

HiroA said:

Do you mean their solicitor can ignore me and go ahead with the freehold purchase?

To be clear - I meant that the solicitor can ignore you and continue with the process to buy the freehold.

So you might then have to go to the county court to try to stop the process. (I said Tribunal before, but it might be the county court.)

It's all very complex, I think you'll struggle without a solicitor.

Here's some info on how the process works: https://www.lease-advice.org/advice-guide/ce-getting-started/

ExEstateAgent

My initial thought was that the normal enfranchisement rules can't apply but then I read the links edddy provided which appeared to suggest a current party to the freehold could still re-purchase with others BUT I wonder if your situation is different because you each own a half of the freehold, rather than it being owned by a company in which you own shares. 

I can't see how a freeholder can enfranchise against themselves. Doing it against a company to take ownership with a different selection of co-owners is I think another matter. 

I personally wouldn't point out the error of their ways at this stage (if it is indeed doomed to fail) as that's a powerful thing to have up your sleeve. Your problem is going to be in traking down a solicitor who has come across this scenario before as it is indeed most odd. 

In the meantime you could approach the others to say you're open to a discussion about dividing the freehold into 3 shares, with appropriate financial compensation (but any changes to any leases is another matter entirely). 

HiroA

I've approached the others and suggested a voluntary arrangement but B, on behalf of others, says the best way is that the counter notice is not served or wholly agreed with a condition that after enfranchisement they subsequently sell the share of freehold back to me for £1 so that each flat owns an equal share.  

I don't think it's going to work or a fair deal as I will risk ending up with no freehold as they can change their mind or story - if they are happy for all of us to have the freehold in equal shares, why are they not asking me to join the enfranchisement? 

I have received a couple of replies from solicitors who agree that it is very likely that the notice is invalid and say they can assist me.  I think the only way left for me to protect my share of freehold is to go to County Court to declare that their notice is invalid. 

ExEstateAgent

Where has the figure of £1 come from? Does B realise that they are going to have to pay a fairly significant sum of money to buy into the freehold? 

These people really don't seem to know what they're doing. 

HiroA

ExEstateAgent said:

Where has the figure of £1 come from? Does B realise that they are going to have to pay a fairly significant sum of money to buy into the freehold? 

These people really don't seem to know what they're doing. 

I've asked them to let me join the company and be included in the collective enfranchisement now so that I am protected.  If they refuse, I will tell them that I can take action to have the notice officially declared invalid, and all the possible bad news they had never imagined. 

HiroA

eddddy said:

ExEstateAgent said:

Collective enfranchisement has effectively already happened and two leaseholders own the freehold. One of them would be applying to buy their own freehold! I can't find anything online that covers this, just advice about 'normal' enfranchisement. I would advise the OP to go back and clarify the situation with LEASE. 

The Law Commission clarify that a second Collective Enfranchisement is possible.

In fact, Collective Enfranchisement can happen multiple times - not just twice.


The Law Commission discuss this in a paper is called: "Leasehold home ownership: buying your freehold or extending your lease.

(The paper is discussing possible future changes to the law, to restrict repeated Collective Enfranchisements.)


Here are couple of relevant extracts - you need to read both extracts, to see the relevance to this thread:

5.4 (4) It is possible for one faction of leaseholders (representing 50% of the flats in a building) to make a successful collective enfranchisement claim, only for another faction (representing the other 50%) to do so immediately thereafter. The result is that the ownership and management of the building can moves back and forth between the two groups – potentially repeatedly. This problem, which is most likely to arise in small buildings, is known as the “ping-pong problem”.

5.214... 
We do not agree, however, that it can be adequately addressed by increasing the participation requirement for a collective freehold acquisition claim to 51%, as some consultees have suggested. Successive claims would still be possible with a higher participation requirement, provided some participants in the original claim were prepared to join a group of leaseholders wishing to bring a later claim.

Link: https://assets.publishing.service.gov.uk/media/61b9ebc9d3bf7f055fce752b/ENF-Report-final__1_.pdf

I just re-read it and don't think this scenario really applies to my case as it's about, say, 2 different parties taking turn to take ownership, and no joint freeholder is enfranchising it against themselves. It also implies that current landlord  does have to be separate, so really, A cannot be counted as a qualifying tenant and cannot enfranchise it against himself in this scenario, affirming the LEASE advisor's claim.

eddddy

HiroA said:

eddddy said:

ExEstateAgent said:

Collective enfranchisement has effectively already happened and two leaseholders own the freehold. One of them would be applying to buy their own freehold! I can't find anything online that covers this, just advice about 'normal' enfranchisement. I would advise the OP to go back and clarify the situation with LEASE. 

The Law Commission clarify that a second Collective Enfranchisement is possible.

In fact, Collective Enfranchisement can happen multiple times - not just twice.


The Law Commission discuss this in a paper is called: "Leasehold home ownership: buying your freehold or extending your lease.

(The paper is discussing possible future changes to the law, to restrict repeated Collective Enfranchisements.)


Here are couple of relevant extracts - you need to read both extracts, to see the relevance to this thread:

5.4 (4) It is possible for one faction of leaseholders (representing 50% of the flats in a building) to make a successful collective enfranchisement claim, only for another faction (representing the other 50%) to do so immediately thereafter. The result is that the ownership and management of the building can moves back and forth between the two groups – potentially repeatedly. This problem, which is most likely to arise in small buildings, is known as the “ping-pong problem”.

5.214... 
We do not agree, however, that it can be adequately addressed by increasing the participation requirement for a collective freehold acquisition claim to 51%, as some consultees have suggested. Successive claims would still be possible with a higher participation requirement, provided some participants in the original claim were prepared to join a group of leaseholders wishing to bring a later claim.

Link: https://assets.publishing.service.gov.uk/media/61b9ebc9d3bf7f055fce752b/ENF-Report-final__1_.pdf

I just re-read it and don't think this scenario really applies to my case as it's about, say, 2 different parties taking turn to take ownership, and no joint freeholder is enfranchising it against themselves. It also implies that current landlord  does have to be separate, so really, A cannot be counted as a qualifying tenant and cannot enfranchise it against himself in this scenario, affirming the LEASE advisor's claim.

You need to re-read the second extract. (As I said... "you need to read both extracts, to see the relevance to this thread")

The second extract seems to mirror your exact situation. 


The second extract talks about a participants in the first claim joining a group of leaseholders wishing to make a later claim

So in your case:

• You and leaseholder A participated in the first claim

• Then leaseholder A joined a different group of leaseholders (i.e. leaseholder A and leaseholder B ) to make a later claim

HiroA

eddddy said:

HiroA said:

eddddy said:

ExEstateAgent said:

Collective enfranchisement has effectively already happened and two leaseholders own the freehold. One of them would be applying to buy their own freehold! I can't find anything online that covers this, just advice about 'normal' enfranchisement. I would advise the OP to go back and clarify the situation with LEASE. 

The Law Commission clarify that a second Collective Enfranchisement is possible.

In fact, Collective Enfranchisement can happen multiple times - not just twice.


The Law Commission discuss this in a paper is called: "Leasehold home ownership: buying your freehold or extending your lease.

(The paper is discussing possible future changes to the law, to restrict repeated Collective Enfranchisements.)


Here are couple of relevant extracts - you need to read both extracts, to see the relevance to this thread:

5.4 (4) It is possible for one faction of leaseholders (representing 50% of the flats in a building) to make a successful collective enfranchisement claim, only for another faction (representing the other 50%) to do so immediately thereafter. The result is that the ownership and management of the building can moves back and forth between the two groups – potentially repeatedly. This problem, which is most likely to arise in small buildings, is known as the “ping-pong problem”.

5.214... 
We do not agree, however, that it can be adequately addressed by increasing the participation requirement for a collective freehold acquisition claim to 51%, as some consultees have suggested. Successive claims would still be possible with a higher participation requirement, provided some participants in the original claim were prepared to join a group of leaseholders wishing to bring a later claim.

Link: https://assets.publishing.service.gov.uk/media/61b9ebc9d3bf7f055fce752b/ENF-Report-final__1_.pdf

I just re-read it and don't think this scenario really applies to my case as it's about, say, 2 different parties taking turn to take ownership, and no joint freeholder is enfranchising it against themselves. It also implies that current landlord  does have to be separate, so really, A cannot be counted as a qualifying tenant and cannot enfranchise it against himself in this scenario, affirming the LEASE advisor's claim.

You need to re-read the second extract. (As I said... "you need to read both extracts, to see the relevance to this thread")

The second extract seems to mirror your exact situation. 


The second extract talks about a participants in the first claim joining a group of leaseholders wishing to make a later claim

So in your case:

• You and leaseholder A participated in the first claim

• Then leaseholder A joined a different group of leaseholders (i.e. leaseholder A and leaseholder to make a later claim

You are right.  The good thing about this discussion paper is that it discusses this scenario as "problem" and  they "do not think it is desirable as a matter of qualifying criteria generally to increase the participation requirement for collective claims", so it affirms LEASE's advice that it defies the purpose of the act and cannot be fair. I might include this paper in my supporting documents.  You may need to go to court to prove this, but I cannot see Court endorsing this scenario, especially when I virtually offered B to sell a share of freehold. And it's not possible under  Trust of Land and Appointment of Trustees Act 1996 anyway.