Whilst no one wants a landlord who is overly involved, think George Roper in ‘Man About The House’ (I am truly showing my age here), a missing landlord can cause difficulties for leaseholders who need to extend their lease or wish to purchase the freehold of their flat.
A missing landlord is a common problem. I often receive calls, not only from leaseholders but investors who are looking to add a flat or building to their portfolio, where the process is being impeded because the landlord cannot be located.
If you find yourself in this situation, there are actions you can take to protect your interests and move arrangements such as a freehold purchase, lease extension or collective leasehold enfranchisement forward.
Try to find the missing landlord yourself
The usual process for extending a lease is under a private arrangement between the landlord and tenant or for the tenant to serve Notice under Section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 (known as “a Section 42 Notice”). Of course, for either of these options to be effective, the missing landlord must be locatable. If they are not, you must apply to the County Court for relief against having to serve a Section 42 Notice.
To obtain dispensation through the County Court under the Leasehold Reform, Housing and Urban Development Act 1993, you will need to demonstrate you have taken all possible steps to track down your missing landlord independently. Ways to do this include:
- check the last address listed for the freeholder in the Land Registry, or if the property is owned by a corporate, Companies House
- hire an Enquiry Agent (Private Investigator) – they can conduct a search and produce a report stating the landlord is unable to be located
- advertise in the London Gazette or local paper and retain evidence of the efforts you have made
- check with any property management companies which may have been involved with the building or contact any Solicitors who may have had dealings in connection with the property to see if they can provide the landlord’s contact details
- investigate whether the freehold is in the name of a company in liquidation or the freeholder is an undischarged bankrupt – in this situation, the section 42 Notice may be served on the administrator of the company or trustee in bankruptcy.
Apply to the Court to extend a lease when the landlord is missing
If all attempts to track down the missing landlord lead to a dead-end, an application can be made to the County Court to dispense with the need for statutory Notice to be granted before the lease can be extended. Once the application is made the matter will be referred to the First Tier Property Tribunal, who will determine the format of the extension and the value (known as a premium) attached to extending the lease. The matter will then be referred back to the County Court. Premium funds will be paid to the Court Funds Office, and upon payment, the Court will execute the required paperwork, which will be lodged at the Land Registry Office.
However, even if you do extend your lease, a missing landlord still results in problems. Knowing who the freeholder of the property is also important as they will be responsible for fulfilling certain duties such as organising insurance, completing repairs, and managing disputes arising between tenants. Furthermore, your lease agreement may require you to seek permission if you wish to make certain changes to the property.
Mortgage lenders are also reluctant to lend on properties where the landlord is not identifiable, which could seriously impede your ability to sell. Therefore, you may be better off getting together with your neighbours and buying the freehold of the property outright.
Buying the freehold of a property if the landlord cannot be found
Being unable to find a missing landlord means you and the other tenants wishing to purchase the freehold will be unable to serve notice that you are exercising your statutory enfranchisement rights. If your independent efforts yield no success in finding the missing landlord of your property, you can apply to the County Court for a ‘Vesting Order’. The procedure involves filing a Civil Procedures Rules (CPR) Part 8 application form. Be sure to attach evidence showing you have made all reasonable efforts to trace the freeholder. The submission will also need to include title searches, copy leases, copy notices, witness statements, and draft land registry transfer forms.
If the Court is satisfied the landlord is truly missing and the application is presented correctly, a Vesting Order may be granted without the requirement of a full hearing. However, payment will still need to be made to acquire the freehold; this will be determined by the Leasehold Valuation Tribunal. The Vesting order has the effect of allowing the freehold of the property to be transferred by the Court. Once the premium has been paid to the Court Funds Office, the freehold title can be transferred and noted in the Land Registry.
What if the absentee freehold returns?
Should a missing landlord suddenly reappear on the scene, they will be unable to reverse the freehold transfer. However, they can have the premium transferred to them. You and fellow tenants can choose to take out absentee landlord indemnity insurance to protect you from liability if the missing landlord reappears and makes a claim against you.
If you are in a situation where the freeholder is missing, and you need to extend your lease or wish to purchase the freehold, it is crucial to seek advice from an experienced Solicitor. These types of matters can be complicated even when the landlord is traceable. Trying to navigate the process of absentee landlord lease extensions and applying for a Vesting Order can leave you and other tenants wide open to legal claims by the freeholder.
To find out more about leasehold extensions and leasehold enfranchisements, please call our office on 020 3588 3500.
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