The High Court has further reduced the potential arguments that freeholders may use to frustrate an application to enfranchise.
Tenants of a self contained part of a building, that may be treated as two separate parts of a building, now have the potential to be treated as one part so that they can join together to serve an initial notice to enfranchise. The implications of this are that where previously the participating tenants may have been frustrated from enfranchising by not complying with the qualification criteria and meeting the minimum numbers of participants needed within one part of a building, they may now join together against a common freeholder with one notice of claim.
This will apply to both smaller and larger buildings. The building that was the subject of the case was an old, 5 storey, mansion block arranged in eight pairs of 20 flats and the tenants of one of the pairs of flats were seeking to enfranchise. The new interpretation will apply equally to smaller blocks and by way of a very simple example; a building capable of being split into 4 flats when severed horizontally and vertically. Where, by a strict interpretation of the legislation this may have meant two notices being served for each half of the part of the building consisting of two flats, one above the other, three or four flats may now make an application to acquire the freehold.
The interpretation of this case continues a tendency by the courts to enable tenants the flexibility required to enfranchise blocks of flats and frustrate freeholders arguments to invalidate such applications.
CASE: Craftrule Ltd v 41-60 Albert Palace Mansions (Freehold) Ltd  EWHC 1230 (Ch)
For further information contact Andrew Raby
Topics: Commercial Lease Transactions