Absentee Freeholder | Leasehold Guidance

Absentee Freeholder ?

Not being able to find the Freeholder of your block of flats need not stop you from getting on with extending your lease or collectively buying the freehold of your block.

You'll need a Valuer, a Solicitor and to follow some special procedures and to pay the premium into Court.

Frustrated? Can't trace your freeholder?

Lease getting shorter, getting difficult to sell

Need a lease extension but frightened of the prospect of Court and First-tier Tribunal red tape?

For around £2,000 the Ringley Group's Leasehold Guidance service can deliver results.

Leases continue to get shorter but an absentee freeholder need not stop you from claiming a lease extension, or exercising your right to manage or buy the freehold of your block of flats. There is a way....

Provisions were set down in the Leasehold Reform (Housing & Urban Development) Act 1993 to overcome the problem of not being able to trace your freeholder. They way to do it is via a "vesting order".

To obtain a vesting order a leaseholder seeking to extend their lease or a group of leaseholders wanting to buy the freehold or claim their right to manage merely need to make an application to the County Court. Such an application should be made on a CPR Part 8 application form and the Court fee is around £150. If the County Court is to grant a vesting order they must be satisfied that reasonable efforts to trace the landlord have been made.

Evidence of such efforts could include:

a land registry search of the Freeholder’s last known address to prove that he no longer owns this property and has moved on to address unknown,
witness statements to confirm that a visit to the Freeholder’s last known address has not provided a forwarding address, or
an absentee freeholder title indemnity policy that may have been taken as a condition of mortgage by any leaseholder who recently bought a flat in the block.

The particulars of claim will need to set out whether the hopeful leaseholder or leaseholders have served their notice of claim on the Freeholder’s last known address or served such notice in the London Gazette or a local paper or a request that the Court grants a dispensation from the requirement to serve notice.

A case bundle will need to include up to date Land Registry title searches, copy leases, copy notices, witness statements, draft land registry transfer forms and other matters highlighted above.

The County Court may set a date for a hearing or the district judge may be satisfied that reasonable efforts to trace the Freeholder have been made and rule on the basis of the facts as presented to him, without need for a hearing. When your case is proved, the Court will issue a judgment setting out that the freehold may be acquired by the leaseholder(s) with funds to be 'vested' in the Court and deferring the case to the First-tier Tribunal (Property Chamber) (formerly the First Tier Tribunal ('FTT')) for determination of a 'reasonable' premium.

The First-tier Tribunal (Property Chamber) (formerly the First Tier Tribunal ('FTT')) also hears many absentee Freeholder cases without a full hearing by issuing directions for the hopeful leaseholders to comply with and timescales for documents to be produced by. The documents the Tribunal will need include the order made by the County Court, copy leases, the valuation for the leaseholders, and proposed TP1 land transfer form. The Tribunal panel usually consists of a layperson, a lawyer and a valuer who make their determination from not only the evidence put before them but also their experience. There is therefore little point in putting a valuation before the panel that is not prepared in accordance with current caselaw and reflects market trends in respect of capitalization rates and improvement rates.

The most common question we get asked is: Will it cost me significantly more if the Freeholder is absentee, whereabouts unknown? Our advise is don’t be off-put by the complexities of what has to be done as at the Ringley Groups’ www.leaseholdguidance.co.uk can offer a complete service and charge nearly all aspects on a fixed or stage based fee basis.

On the positive side you may save the cost of serving a Section 13 or Section 42 Claim Notice, you will save the cost of negotiations with the Freeholder’s Surveyor because there is no one to negotiate with as the First-tier Tribunal (Property Chamber) (formerly the First Tier Tribunal ('FTT')) will determine the case.

Post valuation using www.leaseholdguidance.com fees for a 'vesting order' application to the County Court cost in the region of £750, and £750 for dealing with a written track application to the First-tier Tribunal (Property Chamber) (formerly the First Tier Tribunal ('FTT')).