Absent Freeholders and your Lease Extension

Absent Freeholders – the legislation helps

When it comes to your lease extension, and you simply can’t track down your freeholder, the Leasehold Reform (Housing and Urban Development) Act 1993 helps out. In particular, it includes provision for avoiding the complex, costly and time consuming process of having to serve a statutory notice enforcing a lease extension in situations where a leaseholder needs to secure a lease extension on a property with an absentee freeholder.

Why is this legislation such a boon to the owner of a leasehold flat?

For the simple reason that any property known to have an absentee landlord or freeholder, [especially if it only has a short lease term remaining], is fundamentally unattractive to mortgage lenders – with the knock on effect that the leaseholder will struggle to get a mortgage or even be able to market the property.

Fortunately, the law provides a solution to this problem. And we can help you put it into practice – just call us now on FREEPHONE 0800 1404544 for FREE initial phone advice.

Absent Freeholders – applying for a Vesting Order

That solution allows the leaseholder to make an application for what is known as a “Vesting Order” through the County Court. The County Court can also allow you to do without having to serve your missing freeholder with a statutory notice –  which is normally required when you apply for a lease extension.

When your freeholder is missing, and all efforts to track him or her down have been unsuccessful, then the process for a leaseholder who needs to extend their own individual lease, or for a group of leaseholders who have decided that they want to own the freehold of their apartment block, or take over the right to manage it, can be summarised as follows:

  • Evidence must be produced to the court to show that reasonable efforts have been made to trace the absent freeholder.

Such evidence must include:

1. Providing freehold Office Copies [ available from the Land Registry] which will include proof of the ownership of the property by the freeholder and will show his or her last known address.

2. Proving that the freeholder is no longer the owner of the property and has moved to another address.

3. Or alternatively, producing statements to the effect that a visit to the last known address of the freeholder has not resulted in the leaseholder obtaining a forwarding address.

  • Once this evidence has been produced to the County Court, the judge will either rule on the basis of that evidence, being satisfied that all reasonable efforts have been made to trace the absentee freeholder or set a date for a Vesting Order hearing.
  • The judgement issued after the case has been proved enables the leaseholder to extend their lease or acquire the freehold – despite the fact that the missing freeholder is unaware of the action – and sets out that funds be ‘vested’, or deposited, by the leaseholder for future compensation of the absent freeholder in the Court.

The role of the First Tier Property Tribunal

With the funds vested in the Court the case will then pass to Leasehold Valuation Tribunal [or, as we should more properly call it these days, the ”First-tier tribunal – Property Chamber (Residential Property”)] that will then calculate a ‘reasonable premium’ for the freehold, should the freeholder re-appear at some point in the future.

The First Tier Property Tribunal can often perform its absentee freeholder work without the need of a full hearing by directing the leaseholder(s) to produce the necessary documentation within a defined timescale. The documentation will comprise:

• Copy leases

• The leaseholders valuation

• The County Court Judgement

• The proposed TP1 Land transfer form

As a method that allows leaseholders to avoid having an unmarketable property with a short lease, this system works well, allowing the leaseholder to acquire both the freehold or the grant of a lease extension (to themselves) at a very attractive premium – often an absolute bargain.

However for a non-legally trained leaseholder, the complexities of the process can appear daunting and in practice can prove very tricky indeed.

Our advice is simple – don’t cut corners.

To ensure that the process runs smoothly and to have the peace of mind that the lease extension will be successfully obtained by mean of the Vesting Order, you really need to get help from solicitors who specialise in this area of the law.

Want a Lease Extension? Problems with an Absent Freeholder? Contact us today

Wherever you live in England and Wales, our expert Lease Extension Team can take the stress out of extending your lease despite an absent freeholder.

  • Just call us on FREEPHONE 0800 1404544 for a FREE initial phone consultation and a FREE quote for your lease extension OR
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