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Owing to poor management, unreasonable service charges and shortened leases enfranchisement actions have become increasingly popular in recent times. One case in particular which completed in 2009 is Greenhill, involving a block of 140 flats in Hampstead. This action was so complex it took five years to complete.
In 2004, the then Landlord of the block granted a lease to a mobile phone provider for a mobile phone mast on the roof of the block. A concerned Chairman of the Greenhill Residents Association sprung into action by seeking legal advice in connection with the mast. The residents also asked for clarification on their legal position and options with regards to acquiring the freehold of the block, which contained their homes and investments.
This action was complicated due to several issues including ongoing problems with the mobile phone provider; differing leases within the block; service charge disputes; other interests owned by head Landlords, a porter’s flat, third party financing and alleged potential for roof development.
Enfranchisement Begins
The Initial Notice, signed by eighty participating leaseholders was served upon the freeholder and head landlords on 11 November 2004. Hearings to determine the many complicated issues that remained in dispute took place in 2005 and 2006. The Leasehold Valuation Tribunal (LVT) determined in favour of the Greenhill residents and leaseholders. The decision was immediately appealed by the freeholder.
Sportelli Announced
In the interim, the decision of Sportelli was announced. The freeholder argued that this matter should be brought in line with the Sportelli decision. This had an adverse impact on the overall price payable for the freehold interest.
A New Tactic
With the freeholder refusing to negotiate terms and exposing the residents to increased costs, a tactical decision was taken to invoke the Right to Manage. This would allow the leaseholders to take over the management of the block. The Notice of Claim was supported by over 100 leaseholders. The validity of the notice was questioned by the freeholder to such a degree that the matter was heard twice before the LVT and the Land Tribunal. It was eventually referred to the High Court which confirmed the Notice of Claim was valid and awarded costs against the freeholder.
The End in Sight
In November 2007, the freeholder’s appeal was heard before the Lands Tribunal. The Tribunal were reluctant to depart from the Sportelli decision.
However, completion was again delayed when the freeholder was unable to complete within the prescribed timescales. A Court application was made to compel the freeholder to vest the freehold interest upon the agreed terms. This was successfully handled by consent.
The acquisition of the freehold title finally completed on 20th January 2009 and work is underway to extend theleases of 100 or so participating leaseholders.
The Greenhill case has been widely reported, including on the LVT Bulletin website (www.lvtbulletin.com).