Jonathan Gavaghan, a barrister at Ten Old Square and an expert on enfranchisement, looks back at some of the decisions that formed the enfranchisement landscape and some of the lessons learnt along the way.
In 1993, after a quarter of a century of being treated like second-class citizens in comparison to their counterparts in houses, long-leaseholders of flats finally got proper rights of enfranchisement1.
The Parliamentary intention was to provide an informal and user-friendly system where flat owners and landlords could represent themselves before the Leasehold Valuation Tribunal. That was the plan. Unfortunately it didn’t quite turn out that way: the procedure and law are convoluted and opaque. If one theme were to emerge from the subsequent cases, it was that, without an experienced guide, the enfranchisement landscape is barren and depressing and one where it is only too easy to lose your footing.
The flats that have made the law all tend to be London: high values making fighting issues in court commercially worth the risk. Many of the cases deal with whether notices satisfied the precise technical requirements of the Act. (Layman could be forgiven for thinking such disputes were wholly divorced from the substantive merits of a case.)
Initial notice
Mr Morris, of Flat 32, 5 Sloane Court East had the dubious honour of being the losing party in one of the most significant of these cases2. In his initial notice for a lease extension, Mr Morris suggested a premium of £100. The Court of Appeal held that the tenant’s notice should state a realistic figure. £100 was not a genuine proposal: Mr Morris’ notice was therefore invalid and his whole claim struck out.
Tenants also need to avoid the fate of the tenants of 94 Carlton Hill, London NW8. Their notice specified a date one day too short for the landlord’s counternotice: the Court of Appeal held this was a fatal flaw3.
Appeal
The Court of Appeal has more recently been less harsh when it comes to notices: but in respect of errors by landlords. The tenants of the flats of 7 Strathray Gardens lost their argument before the Court of Appeal that the landlords’ failure to state whether the building was within an estate management scheme invalidated the counternotice4. The Court held that if the area was not in a scheme, it was not fatal to a counternotice to fail to spell that out.
The Court of Appeal also showed a more lenient view than in Mr Morris’ case in respect of the counternotice of the landlord of the flats at 9 Cornwall Crescent5. The Court held that the test for the counternotice was not whether the figure given was objectively realistic – but simply whether it was given in good faith even if it turned out not to be realistic. The Court hinted that the Cadogan v Morris case should not be interpreted as setting any other test but nevertheless confined their views to the problem before them i.e. the question of the landlord’s counternotice. The moral of the story? Despite a little recent leniency, landlords and tenants must never forget the golden rule when traversing this treacherous landscape: get your notices right!
Footnotes
1 Leasehold Reform and Urban Development Act 1993. 2 Cadogan v Morris [1999] 1 EGLR 59. 3 Keepers and Governors of John Lyon Grammar School v Secchi [1999] 3 EGLR 49. 4 7 Strathray Gardens Ltd v Pointstar Shipping & Finance Ltd [2005] 1 EGLR 53. 5 9 Cornwall Crescent London Ltd v Kensington & Chelsea LBC [2005] 2 EGLR 131.
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