Acquisition Of The Freehold

Qualifying leaseholders with long leases of over 21 years have the right under s25 (Part 3) of the Landlord and Tenant Act 1987 to apply to the High Court or the County Court for a compulsory Acquisition Order to acquire the landlords interest (the freehold). This option can also be sought if the landlord is absent. This right doesn't however include any leaseholder that owns more than 2 flats in the building. Grounds for application are quite specific and are that the landlord

1. Is in breach of an obligation under the terms of the lease and the breach is likely to continue;
2. Has demanded, or is likely to demand unreasonable service charges;
3. Fails to comply with any relevant provision of an approved management code of practice (or all three);
4. Other circumstances exist which make it just and convenient for the order to be made

Before an application can be made to the Court, under s27 a Preliminary Notice must be served on the landlord, unless the Court agrees to dispense with the notice. If the Court makes the Order then the LVT determines the terms on which the interest may be acquired, including the purchase price unless the parties involved come to their own agreement. The Courts Order for Acquisition is subject to the following conditions:

• There are two or more flats;
• Two thirds of the flats are owned by qualifying tenants;
• The requisite majority of qualifying tenants make the application.
• If the Court makes the Order then the LVT will determined the terms on which the lanldords interest may be acquired (including thepurchase price) unless they have been agreed between the parties involved.

Note: This does not apply if less than half the flats in the block are let on long leases (which are not business leases) and the landlord is resident.

ABSENT FREEHOLDER

Leaseholders also have the right to apply for compulsory acquisition under s33 of the Landlord and Tenant Act 1987 where their freeholder is deemed 'absent'. Again, the Court must be satisfied that all reasonable attempts to locate the freeholder have been taken.