Right Of A Tenant To Acquire The Freehold Of Their House. Procedure To Be Followed Where The Landlord Cannot Be Located
A special procedure is laid down to deal with cases where the landlord cannot be found or his identity cannot be ascertained. Cases of this kind are quite common, especially where the tenancy is very long and the rent reserved by the lease is a nominal or very small amount.
The likely course of events are as follows:
The tenant must satisfy two initial conditions:
1.1 he must be entitled to acquire the freehold under the Leasehold Reform Act 1967 (“the Act”); and
1.2 he must be unable to serve a Notice of Tenant’s Claim because the person to be served “cannot be found, or his identity cannot be ascertained”.
The first check that should be carried out to ascertain the identity of the landlord is a search of the freehold with the Land Registry. If the freehold interest is registered, the Land Registry Official Copy of Register Entries would reveal the name of the landlord and his or hers current address for correspondence. If ground rent has been paid recently it will be necessary to ascertain who was in receipt of that rent. If the property is unregistered, as if often the case where the landlord cannot be found, any title deeds will have to be examined in detail.
2. Application to Court
The tenant must apply to the County Court, which has the power to fulfil the function of the Landlord in the Landlord’s absence and make a “vesting” order, which will transfer the freehold to the Tenant.
The application will be supported by a witness statement, which is made by the tenant, and includes any other relevant documentation that proves that the preliminary requirements set out above are satisfied.
The Court will then list the hearing, which may occur several months after the application is lodged. The District Judge will require a draft order to be lodged in court prior to the hearing.
3. The First Hearing
You do not have to attend the hearing if you do not want to, although we might consider it preferable if the case is particularly complex or any issues arise that are not dealt with in your initial witness statement. In any event, it is unlikely that you will have to formerly give evidence.
The tenant is required to prove his or her right to acquire the freehold and satisfy all enquiries which might be made by a prudent conveyancer attempting to trace the missing landlord. If the Judge agrees that you are entitled to the freehold, he will make further directions in respect of the valuation of the price to be paid into court and such further steps as he considers necessary to attempt to trace the Landlord.
4. Following the Court’s Directions and Preparing for the Second Hearing
The court may require the tenant to take further steps to trace the landlord. This may include an advertisement or whatever else the court thinks proper in the circumstances. Provided that the tenant has already made all reasonable enquiries, the only requirement is usually that advertisements are inserted in specified newspapers circulating in the locality where the property in question is situated and also in any other locality where there is some possibility of the landlord being traced. If the landlord is traced at this stage, please see 8. below entitled – “What if the landlord is subsequently traced?”
4.2 Ascertainment of sum to be paid into court
The price to be paid for the freehold comprises the purchase price for the freehold together with unpaid rent due up to the date of the conveyance.
4.2.1 Purchase price
An application is made by the tenant to the leasehold valuation tribunal. The leasehold valuation tribunal will then determine the purchase price in accordance with the complex provisions laid down by the Act. We are able to provide you with a valuation prior to the application being lodged. This may help you decide whether or not you wish to pursue the claim.
4.2.2 Unpaid rent
The sum to be paid into court must include the amount of estimated rent remaining unpaid. If there is rent outstanding, the court must determine the arrears up to a specified date when it is anticipated that the conveyance will be ready for execution. However, the arrears are limited to six years.
The Conveyance will be drafted by us and sent to the court prior to the second hearing for approval.
5. Second Hearing
Once again, the District Judge will require a draft order to be lodged in court prior to the hearing along with the draft deed of transfer. The Court will either approve the documents or make suggested amendments, and will nominate a Judge to execute the transfer in the place of the absent Landlord.
The final stage is completion. This is the execution of the transfer following the payment of the purchase price into court, in accordance with the order. When the payment into court has been made, the designated judge will execute the engrossed transfer and hand it over to the applicant.
The court cannot order the tenant’s costs to be paid out of the amount to be paid into court, and consequently the applicant must bear his own costs.
8. What if the Landlord is Subsequently Traced?
If, after the tenant has made his application, the landlord is found or ascertained, the application is treated as a Notice of Tenant’s Claim to acquire the freehold duly served on him. No further proceedings can be taken under the application, except that the court can give directions as to the steps to be taken for giving effect to the landlord’s rights and obligations, including directions modifying or dispensing with any of the requirements of the Act or Regulations made under it. The tenant can in such a case only withdraw his application before any further steps are taken either by the landlord or himself. Thereafter, he must obtain either the consent of the landlord or the leave of the court and the court cannot give leave unless it appears just to do so by reason of matters coming to the tenant’s knowledge in consequence of the landlord being traced.