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Notices

This page contains details of a number of authorities dealing with notices in enfranchisement cases.

Address for service of notice under 1993 Act

Glen International Limited v Triplerose Limited
[2007] EWCA Civ 388

The issue in this case was whether a notice under section 42 of the Leasehold Reform Housing and Urban Development Act 1993 had been served at the correct address. The 1993 Act requires that, should the landlord have given an address for the service of notices under the Landlord and Tenant Act 1987 then notices under the 1993 Act should be served at that address. The court found that an address stated to be the landlord's address for correspondence in a particular letter sent by the landlord's agent to the tenant's solicitor in the course of correspondence concerning dilapidations and insurance could not be considered to be the landlord's address for the service of notices under section 48 of the Landlord and Tenant Act 1987.


Amendment to claim notice

Howard De Walden Estates Ltd v Malekshad
[2003] EWHC 3106 (Ch), Neuberger J

The Malekshad saga continued after the HL decision on the meaning of a house. Neuberger J subsequently gave T permission to amend its original notice (pursuant to sched 3, para 6(3) of the 1967 Act) so as to limit the claim to the main house. The judge set out the circumstances in which an amendment would be permitted under para 6(3). The judge also held that T had been entitled to serve a second notice to enfranchise the mews house.


Assignment of benefit of s42 notice

Money v Westholme Investments Ltd
(Solicitors Journal, 28 March 2003, p357).

Leasehold owner served a s42 notice and paid a deposit to the freeholder pursuant to the regulations. He subsequently sold the property and assigned the benefit of the notice. The assignee did not know that the assignor had paid the deposit. The completion statement on the sale included the price of the property and the deposit. Completion took place with the parties agreeing to resolve the issue of the deposit afterwards. The assignee subsequently completed the acquisition of the lease extension and had the benefit of the deposit. Assignor then sued for the deposit.

Held: Assignor was entitled to be paid the money claimed. Assignee had had the benefit of the deposit. On a construction of the contract for sale the assignee was entitled to have the benefit of the deposit.


Companies

Service of notices by companies under the 1993 Act

Hilmi & Associates Ltd v 20 Pembridge Villas Freehold Ltd
[2010] EWCA Civ 314

Summary

A notice served under s13 or s42 of the Leasehold Reform, Housing and Urban Development Act 1993 by a company must comply with s44 of the Companies Act 2006, i.e. the notice must either be sealed with the common seal of the company or be signed by two authorised signatories or by a director of the company in the presence of a witness who attests the signature.

More detail

Both a s13 notice (an initial notice used to start collective enfranchisement proceedings) and a s42 notice (the tenant’s notice used to start a claim for lease extension) have to be signed personally by “each of the tenants, or (as the case may be) by the tenant, by whom it is given” (s99(5) of the 1993 Act). This is unusual in the law of landlord and tenant. In most cases a notice can be and often is signed by an agent (usually the solicitor) on behalf of the landlord or tenant.

Section 99(5) has caused difficulties in the past. In St Ermins Property Company Limited v Tingay [2002] EWHC Ch 1673, it was held that the signature by an agent appointed under a power of attorney did not satisfy the statutory requirement of signature by the tenant; and in Cascades and Quayside Limited v Cascades Freehold Limited [2007] EWCA Civ 1555 the CA held that signature by an agent who had been appointed less formally did not suffice.

A large number of flats especially in central London are held by companies in order to avoid stamp duty. The position in relation to execution of a notice by a company was until recently uncertain as there were conflicting county court decisions. In City and County Properties Limited v Plowden Investments Limited [2007] Judge Reid QC held that a notice signed by one director of a corporate tenant was not sufficient.

In this case HHJ Dight, who along with HHJ Marshall hears most leasehold enfranchisement claims issued in Central London, held that a notice signed by one director was sufficient. The CA has now overturned that decision.

The court held that signature of both a s13 notice and a s42 notice by a company was governed by s36A of the Companies Act 1985. That section required that the notice either be sealed with the common seal of the company or be signed by a director and secretary or by two directors.

That is still the case in relation to any notice served prior to 6 April 2008 but after that the date the position is governed by s44 of the Companies Act 2006, which is in the following terms:
    "(1) Under the law of England and Wales or Northern Ireland a document is executed by a company–

      (a) by the affixing of its common seal, or
      (b) by signature in accordance with the following provisions.

    (2) A document is validly executed by a company if it is signed on behalf of the company–

      (a) by two authorised signatories, or
      (b) by a director of the company in the presence of a witness who attests the signature.

    (3) The following are “authorised signatories” for the purposes of subsection (2)–

      (a) every director of the company, and
      (b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.

    (4) A document signed in accordance with subsection (2) and expressed, in whatever words, to be executed by the company has the same effect as if executed under the common seal of the company.
Thus a notice which is required to be signed by a company must either be sealed with the common seal of the company or be signed by two authorised signatories or by a director of the company in the presence of a witness who attests the signature.


Counter-notices

Burman v Mount Cook Land Ltd
[2001] EWCA Civ 1712

Where a tenant wishes to acquire a new lease of a flat he must serve a notice on the landlord under s42 of the Leasehold Reform and Urban Development Act 1993. The landlord must then serve a counternotice under s45 which requires certain information including a clear statement as to whether or not he admits that the tenant has the right to claim a new lease. The landlord served a counter-notice headed Landlords Counternotice Section 45 which stated that the landlord did not accept the tenants proposed premium. It specified a counter-proposal. However, it did not expressly state whether the landlord did or did not admit the tenants right to a new lease.

Held: The landlords counternotice is an integral part of the process - the scheme requires that the tenant be left in no doubt as to the landlords position. The counternotice that was served was invalid. The consequence was that the tenant was entitled to apply under s49 for an order that the court determine the terms of the purchase in accordance with the proposal in the tenants notice.


Counter-notice and estate management schemes

7 Strathray Gardens Ltd v Pointstar Shipping and Finance Ltd
[2004] EWCA Civ 1669

Regulation 4 of the Leasehold Reform (Collective Enfranchisement) (Counter-notices) (England) Regulations 2002 (SI 2002/3208) states that: "A counter-notice given under section 21 (reversioners counter-notice) of the 1993 Act shall contain (in addition to the particulars required by that section) a statement as to whether or not the specified premises are within the area of a scheme approved as an estate management scheme under section 70."

In this case the landlord failed to state in its counter-notice whether the premises were in the area of a scheme approved as an estate management scheme under s70. In fact, the premises were not in such an area, and so the counter-notice should have contained a negative statement to that effect. However, the failure to make this statement was not fatal. The requirement to make the negative statement was not mandatory. There was no possible prejudice to the lessees or the nominee purchaser as a result of the absence of the information. Ward LJ, para 57:
    ".. a failure to declare that there is no EMS affecting the property cannot be of such importance that the omission should render invalid a notice which in all other respects is accurate and effective. As for the prospects of successfully recovering damages for any wasted expenditure incurred as a result of such an omission, I can see the interesting arguments both ways but as the question was only raised late in the day and full argument was not directed to it, I would prefer not to express even a tentative view."

Counter notice - realistic price

9 Cornwall Crescent London Ltd v Kensington and Chelsea Royal London Borough
[2005] EWCA Civ 324

An initial notice in a collective enfranchisement case, served under s13 of the 1993 Act, will be invalid if it specifies an unrealistic price (Cadogan v Morris [1999] 1 EGLR 59 - see further immediately below). However, the same rule does not apply to a counter-notice served by a landlord under s21. The reason for this is that the unrealistic figure in a landlords notice can never become the enfranchisement price by default so that no safeguard is required.

In this case the initial notice had specified £210. The counter-notice based upon a valuation report from an inhouse surveyor specified a price of £130,000.


Effect on lease of notice

Notice in respect of single flat within lease of whole building

Ackerman v Lay
[2008] EWCA Civ 1428

Summary

The Court of Appeal held that where a notice is served under s42 of the LRHUDA 1993 claiming a new lease of a single flat comprised within a lease of a whole building, the effect of the notice was to continue that lease post contractual expiry in respect of the flat alone, and not the whole building. Accordingly, the further claim made later under s8 of the LRA 1967 to acquire the freehold of the entire building failed.

Facts

In summary the tenant had a long lease of a house and lived in one of five flats in that house. He served a s42 notice seeking an extended lease of the flat under the 1993 Act. The landlord opposed that claim on the grounds that it wanted to redevelop. The tenant then served a notice under s8 of the 1967 Act seeking to acquire the freehold of the house and the claim based on s42 was stayed. In between service of the s42 notice and the notice under the 1967 Act the original term of the lease of the house had expired by effluxion of time.

The landlord argued that the claim under the 1967 Act was defective as there was no longer a tenancy of the whole of the house to which the 1967 Act applied. The tenant argued that the effect of the s42 notice was to “keep alive” not only the lease of the flat but also the house. The point turned on the construction of paragraph 5 (1) of schedule 12 of the 1993 Act.

HHJ Cowell held that the effect of that paragraph was only to continue the lease of the flat.

Decision

The Court of Appeal agreed. Paragraph 5 (1) of schedule 12 is in the following terms:
    "(1) Where by a notice under section 42 a tenant makes a claim to acquire a new lease of a flat, then during the currency of the claim and for three months thereafter the lease of the flat shall not terminate –
      (a) by effluxion of time, or
      (b) in pursuance of a notice to quit given by the immediate landlord of the tenant, or
      (c) by the termination of a superior lease;
    but if the claim is not effective, and but for this sub-paragraph the lease would have so terminated before the end of those three months, the lease shall so terminate at the end of those three months.”
You can see the tenant’s problem. It says “the lease of the flat”.

Sir William Aldous said as follows:
    “The first stage to a decision on construction must be consideration of the statutory language. Thereafter it is appropriate to look at the other provisions of the Act and practical results to see whether they require a different conclusion. I, like the judge, believe that paragraph 5 of the schedule 12 of the 1993 Act is clear. The lease that is continued is the lease of the flat the subject of the claim and only that lease.”

Initial notice - genuine premium

Mount Cook Land Ltd v Rosen
[2003] 10 EG 165, Judge Knight QC sitting at Central London CC.

A tenant seeking to acquire a new lease under the Leasehold Reform etc. Act 1993 sets the claim in motion by serving a notice under s42, which "must specify the premium which the tenant proposes to pay in respect of the grant" of the new lease (subs (3)). In Cadogan v Morris [1999] 1 EGLR 59 the CA held that the premium must be genuine and not just a nominal figure. In that case a realistic figure was between £100,000 and £300,000. However, the tenant inserted the figure of £100, knowing that it was a formal, nominal figure. The notice was held to be invalid.
    "The tenant is required to specify the premium that he proposes to pay. He did not do so; he deliberately specified a figure that he did not propose to pay. I do not think that the tenant is required to offer his final figure that he may be prepared to go to, but he should in my view, offer a realistic figure". (Stuart-Smith LJ at p61B).
In this subsequent county court case, the s42 notice specified the premium that the tenant was prepared to pay as £100,000. However, at the time of serving the notice the tenant's valuer considered that the proper premium was in the region of £200,000. The county court judge held that the premium specified was not realistic and that the notice was invalid.


Inaccuracy

Speedwell Estates Ltd v Dalziel
[2001] EWCA Civ 1277

A person who wishes to acquire the freehold of his house under the Leasehold Reform Act 1967 must serve a notice in prescribed form, which must contain certain specified particulars. Paragraph 6(3) of Schedule 3 provides that any inaccuracy in such particulars will not invalidate the notice. Perfection is not therefore mandatory. However, the tenant is required to give particulars and not simply to leave the relevant spaces blank.

Applying the principles to Mannai Investments Co. Ltd v Eagle Star Life Assurance the Court of Appeal held that the failure correctly to specify the relevant leases and to give the rateable values of the properties did not invalidate the notices. However the complete failure to provide the details of the periods of residential occupation was a failure to provide information which is among the most important the tenant has to provide and which in many cases would not be within the landlords knowledge. A failure to provide particulars can be an inaccuracy but these failures went too far. The notices were therefore invalid.


Raymere Ltd v Belle Vue Gardens Ltd
[2003] EWCA Civ 996

Where an initial notice has been given the reversioner can require the nominee purchaser, in the case of any participating tenant, to deduce the title of that person to the lease by virtue of which it is claimed that he is a qualifying tenant (s20). In this case the information was not accurate, in that out of date office copy entries were supplied. The reversioners argument that this invalidated the whole procedure requiring a fresh notice was rejected:
    ".. in my view the words shall comply with any such requirement where they appear in section 20(2) require that the nominee purchaser does, at the very least, take positive steps in good faith, to produce good evidence or material to deduce title. Preferably and properly, that evidence or material should be perfect and conclusive. But the nominee purchaser cannot be said to have failed to comply, so as to trigger section 20(3) and the deemed withdrawal, merely because the evidence or material supplied is less than perfect and conclusive. (Holman J, para 70)".

Lay v Ackerman [2004] EWCA Civ 184

A counter-notice served under s45 of the Leasehold Reform, Housing and Urban Development Act 1993 was valid even though the notice wrongly identified the landlord. The landlord was named as Portman Family Collateral Settlements instead of Portman Family Settled Estates. A reasonable person in the position of the tenant would know that the notice was sent by and with the authority of the landlord.

Article: Time to take notice by Damian Greenish, Pemberton Greenish Raises awareness of the various mistakes that can be made in enfranchisement cases and how it might be possible to overcome some of them. (Solicitors Journal, 5 December 2003, p1383).


Notice - validity

Earl Cadogan v Strauss
[2004] EWCA Civ 211

A notice indicating a desire to enfranchise under the Leasehold Reform Act 1967 failed to mention an earlier lease which demised part of the property to the tenant. This constituted an inaccuracy in the particulars but the notice was saved by para 6(3) of the Schedule 3 to the 1967 Act.


Power to sign

St Ermins Property Co v Tingay
[2002] EWHC 1673; [2002] 38 EG 205 (CS); [2002] L&TR 6.

Elderly lady just short of 90 executed an enduring power of attorney giving general authority to her son to act on her behalf. He signed a notice under s42 of the 1993 Act on her behalf claiming an extended lease. Lloyd J held (on an appeal from the county court) that s99 clearly required the notice to be signed by her personally. An enduring power of attorney was not sufficient. The notice was therefore invalid.


Service of second notice where first invalid

Do you have to wait a year?

Sinclair Gardens Investments (Kensington) Limited v Poets Chase Freehold Company Limited
[2007] EWHC 1776 (Ch)

Summary

A defective s13 notice was invalid and did not have to be withdrawn; and the tenants could serve a fresh notice without having to wait for a year.

Detail

Where tenants serve an initial notice pursuant to s13 of the Leasehold Reform, Housing and Urban Development Act 1993 seeking collective enfranchisement and that notice is found to be defective can the tenants serve a fresh notice on the basis that the first notice is a nullity? Or do they have formally to withdraw the defective notice in which case they will be debarred from serving a fresh one for 12 months?

Standard advice in this situation is to serve a fresh notice on the basis that if the first notice was a nullity there could be no question of it needing to be withdrawn. That is the normal position where a mandatory contractual or statutory provision requires a party to give a notice in a particular form in order to achieve a result identified in the contract or statute. See for example Speedwell Estates Limited v Dalziel [2001] EWCA Civ 1277 in which it was held by the Court of Appeal that a similar notice served under the Leasehold Reform Act 1967 and which does not comply with mandatory statutory requirements is invalid. That was also the approach of the Court of Appeal in Burman v Mount Cook Land Limited [2002] Ch 256 which related to a notice under Chapter II of Part I of the 1993 Act (individual lease extensions).

The judge cited the above cases and rejected the landlord's argument that s 21 of the 1993 Act forced a different conclusion in respect of a notice served under s 13 of the Act.

He also rejected an argument based on estoppel. The argument was that the initial notice was itself a representation that it was valid, that the landlord had relied on this by serving a counter notice and this was to his detriment in that the preparation of such a notice had incurred legal fees. The judge was unsure that the notice did represent that it was valid but ruled against the landlord on the other two limbs of the argument. The landlord had not relied on the representation - it had served a counter notice denying the validity of the notice. Further the minimal cost of preparing such a counter notice was not sufficient detriment to found an estoppel.



Time for service of notice by reversioner requiring leaseback

Cawthorne v Hamdan
[2007] EWCA Civ 6

In a collective enfranchisement situation the landlord can, in some circumstances, serve a notice requiring that parts of the freehold or parts held on short leases be leased back to him rather than acquired by the purchasers. This case raises the question of whether a landlord who fails to put his leaseback proposals in his counter-notice can raise it after the LVT has determined the price. If he were allowed to raise it at a later date then this would result in the LVT having to review its decision on price. The Court of Appeal held that he could not raise it later - it had to go in the counter-notice. The argument centred on two apparently conflicting provisions of Leasehold Reform Housing and Urban Development Act 1992.

Section 21 (3) provides as follows:
    "(3) If the counter-notice complies with the requirement set out in subsection(2)(a), it must in addition-

    (a) state which (if any) of the proposals contained in the initial notice are accepted by the reversioner and which (if any) of those proposals are not so accepted, and specify-
      (i) in relation to any proposal which is not so accepted, the reversioner's counter-proposal, and

      (ii) any additional leaseback proposals by the reversioner;"
Schedule 9, para 5 provides as follows:
    "5(1) Subject to sub-paragraph(3), this paragraph applies to any unit contained in the specified premises which is not immediately before the appropriate time a flat let to a person who is a qualifying tenant of it.

    (2) Where this paragraph applies, the nominee purchaser shall, if the freeholder by notice requires him to do so, grant to the freeholder a lease of the unit in accordance with section 36 and paragraph 7 below."
Thus, s21 required the landlord to put any leaseback proposal in the counter-notice. However, Sched. 9 appeared to allow a freeholder to serve a notice at any time when a flat was not let to a qualifying tenant.

In order to avoid an obviously undesirable outcome, of the landlord being allowed to serve a notice after the LVT had determined the price payable and thus requiring a re-determination of the price, the Court of Appeal construed s 21 as being a mandatory requirement. So a landlord must put a leaseback proposal in his counter-notice. The reference in Sched.9, para.5 to "the appropriate time" does not show that a leaseback notice can be served at any time up to that moment. Rather, that paragraph is in effect a proviso to the effect that the leaseback only has to be granted if both at the date of the counter-notice and at the appropriate time the flat is not let to a qualifying tenant. The reference to a notice in sub-para (2) is necessarily therefore to the counter-notice. This is a sensible result arrived at through what may fairly be called a strained construction of the Act. (See in particular paras 28 and 30 of the judgment).


Transfer of reversion

Effect on initial notice if not registered

Curzon v Wolstenholme
[2017] EWCA Civ 1098

Summary

A collective enfranchisement initial notice ceases to have effect where it is not registered and the freehold is transferred to a third party and then subsequently re-transferred. This decision throws the importance of registering the tenants’ interests at the Land Registry in to very sharp relief.


Waiver

Latifi v Colherne Freehold Ltd
[2002] EWHC 2873; [2003] 12 EG 130 (QBD, Cooke J)

The provisions for notices under the 1993 Act can be waived. Tenant had waived the requirement to serve a counter-notice in an extended lease case.

(Approved by CA in Lay v Ackerman at para 53).


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