Under the Leasehold Reform, Housing and Urban Development Act 1993 qualifying leaseholders have the right to extend their lease for a further 90 years at a peppercorn ground rent. The tenant will have to pay a premium for the new lease and can propose that the new lease is on different terms to the existing lease.
The process is started by the leaseholder serving a notice on their landlord, and the landlord then has to serve a counter-notice stating if he agrees with the tenant’s proposals. If the parties cannot negotiate the terms of the extension between themselves, or if there is some other dispute, they can apply to the court or the First-Tier Property Tribunal to obtain a determination (statutory time periods do apply).
What happens if a tenant is unable to serve a notice on their landlord to start the proceedings? Does this mean that the tenant cannot extend their lease?
Can a lease extension still proceed if the landlord is missing?
The 1993 Act provides a solution should this circumstance arise. A leaseholder is entitled to apply to court for a vesting order, and the court has the power to grant an order providing for a new lease to vest in the leaseholder which overcomes the issue of having to serve a claim notice on the landlord. The leaseholder will have to satisfy the court that they have the legal right to a new lease, and that the landlord is truly missing or that their identity cannot be ascertained.
When is a landlord truly missing?
The court will need to be satisfied that the landlord is truly missing. Simply not having had any contact with your landlord for some time is not likely to be sufficient and invariably the court will want evidence of reasonable attempts made to locate the landlord. Some examples that we have dealt with have been caused by the landlord’s title being unregistered, or where the tenant’s notice has been served but this has been returned as undelivered and no forwarding address is known. What will be required in each case will be fact dependent but some common things to check are:
• Check the probate register in case the landlord has passed away
• If the landlord is a company, check companies house records for any current address or details of any recent changes to the status of the company
• Land registry will have a service address for the landlord in respect of their freehold interest (only if their title is registered)
• If there is a managing agent they may be able to provide contact details
• A visit or letter to the last known address might elicit a forwarding address
• Tracing agents can be instructed to try to locate a landlord as a last resort
Before the court grants the vesting order they may require the tenant to take further steps to try to locate the landlord. This could be by way of advertisement or such other method as the court considers appropriate in the circumstances of the case.
How does the legal process work?
The legal process effectively allows the tenant to bypass serving a notice on the landlord. There are three stages to the process:-
1. Firstly, the leaseholder applies to the court for a vesting order
2. Once the vesting order is made, the leaseholder must apply to the First-Tier Property Tribunal for a determination of the premium payable and/or the terms of the new lease
3. When the leaseholder has the FTT’s determination they must restore the proceedings in the county court so that the court can execute the new lease. The premium is paid into court and held for the landlord who can claim the money should they resurface.
Devonshires act for both tenants and landlords in the lease extension process, and our Property and Leasehold Management Teams work together closely to advise and guide you through the entire process.
For further information, please contact Rebecca Brady, Legal Executive in the Housing Management Team.