The situation
We were instructed by a freeholder who had received a notice under Section 13 of the Leasehold Reform, Housing and Urban Development Act 1993. This is the notice served by a group of qualifying leaseholders who wish to “collectively enfranchise” and buy the freehold of their building.
The challenge
Regrettably, our client had not responded to the notice by the date required. That meant they were unable to dispute the proposals in the leaseholders’ initial notice, including the premium to be paid. The leaseholders obtained an order from the court confirming that they could acquire the freehold on the terms set out in their notice.
The legal position
The 1993 Act sets out a number of strict deadlines, and where one party fails to meet them the consequences can be severe. Here, the deadline in question fell four months after the date of the court’s order. By then the leaseholders had to have completed their purchase of the freehold or applied to the court for an extension of time.
What happened
The leaseholders did neither. Our enfranchisement team pointed out that, as a result, their Section 13 notice was deemed to have been withdrawn. The consequence was that the leaseholders could not serve another notice for a period of twelve months, during which time the value of the freehold would continue to increase, and our client regained the ability to respond properly to any future claim.
Why it matters
Whether you are a freeholder or a leaseholder, enfranchisement runs on statutory deadlines that the courts enforce strictly. Instructing a firm with detailed knowledge of the law relating to enfranchisement, and of the consequences of falling foul of it, can be decisive.