Identification blunder stymies leaseholders' hopes

By Commercial Property Team Wed 25 Jun, 2014

Leaseholders who wanted to take over management of their own flats had their hopes dashed after the Upper Tribunal (UT) ruled that misidentification of the landlord on a crucial document was an error which could not be cured.

A company set up with a view to acquiring the right to manage the premises had purported to serve notices on all the tenants, under Section 78 of the Commonhold and Leasehold Reform Act 2002, inviting them to participate in the process.

However, the notices contained a fundamental error in identifying as the landlord a corporate entity which had recently transferred its freehold interest in the property to another company.

On that basis, the real landlord argued that the notices did not comply with the requirements of the Act and were thus irredeemably invalid.

Whilst accepting that the landlord had been misidentified, the Leasehold Valuation Tribunal held that the notices were not invalidated by the inaccuracy.

However, in allowing the landlord’s appeal against that ruling, the UT found that the mistake was more than a mere inaccuracy and constituted a complete failure to provide the tenants with one of the particulars required by the Act.

Noting that tenants would not necessarily know who the freeholder was at any given time, the UT emphasised the importance of leaseholders being given accurate information and observed that Parliament had clearly believed that there were good reasons why they should be told who their landlord is before deciding whether to participate in the acquisition of management powers.

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