Legal column by Lupton Fawcett: leasehold case fails at Court of Appeal

Nearly one in five properties in England is leasehold.
Nearly one in five properties in England is leasehold.
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Nearly one in five of all properties in England are leasehold, with Sheffield one of the main hotspots.

This is not only because of the number of city centre flats, but because developers predominantly sold new-build houses with leasehold titles only and sold the freehold on to investment companies.

Rob Cooke, partner at Lupton Fawcett. Contact: 0114 228 3261 or rob.cooke@luptonfawcett.law

Rob Cooke, partner at Lupton Fawcett. Contact: 0114 228 3261 or rob.cooke@luptonfawcett.law

A challenge to the established formula of valuing the cost of extending residential leases was determined by the Royal Courts of Justice in late January. The case of Sloane Stanley Estate v Mundy concerned a flat in Chelsea where the freeholder sought £420,000 to agree to a lease extension.

The appeal challenged the formula upon which the lease extension is calculated. Judgment was given on January 24 and ruled in favour of the freeholder. Had the appeal gone in favour of the leaseholder, this case would have had a massive impact on the costs of extending leases and acquiring freehold titles all over the country.

Currently, there are two ways in which you can acquire your freehold title or extend your lease; enter a voluntary agreement with your freeholder or serve them with a statutory notice.

In terms of the latter, for both lease extension and freehold acquisitions, you must have owned the leasehold title for a minimum of two years and the lease term should have been originally granted for at least 21 years.

The statutory notice involves following the strict procedure set out by statute and we advise instructing a member of our team to guide you through this technical process.

The criticism of onerous ground rents set by developers has also been highlighted recently. One major housebuilder, Taylor Wimpey, has introduced a scheme to help those who originally bought leasehold properties from them with leases with a 10-year doubling ground rent clause. The company has reached agreements with numerous freeholders, which includes a Deed of Variation, which prevents the ground rent from doubling every 10 years and covering the costs of the leaseholder up to £750.

Lupton Fawcett LLP offers a no obligation initial consultation to advise you on extending your lease, acquiring your freehold or using the Taylor Wimpey assistance scheme. The specialised team has a wealth of experience in this area of law and operate on a fixed fee basis.

Find out more on 0114 2283283 or email natasha.wright@luptonfawcett.law