16:21 PM, 8th August 2022, About 2 months ago 7
Hello everyone, My wife and I own a leasehold flat in a block of six. A head leaseholder is named on the lease but the freeholder is unknown.
We want to extend the lease, so made every attempt to identify the freeholder without success. We appointed a search agency to find the freeholder, and we placed an advert in the London Gazette. We appointed a RICS surveyor to value the property and calculate the Premium, a proportion of which they adjudicated to the head leaseholder.
We also appointed a solicitor to draw up a new lease. We then applied to the County Court for a Vesting Order, which was granted.
We subsequently applied to the First Tier Tribunal to determine the value of the Premium. In the application, we stated the name of the head leaseholder, who, up until this time, had only communicated with us to say that they did not know who the freeholder was. The head leaseholder is not the competent landlord as they have insufficient time left on their lease to grant the extension.
However, on receiving notification of our application from the tribunal, they contacted us to say, erroneously, that they were not aware of our intention (our exhibits to the County Court included several emails between us which demonstrate this not to be true) and that they wanted to negotiate the premium in order to save costs. They also said that we would have to meet their costs for going to the Tribunal.
My initial reply was that, yes, we are open to negotiations but would they tell me on what authority they based their right to do so.
I referred them to the case of Kateb v. Howard de Walden Estates Limited and Accordway Limited (2016 EWCA 1176) which confirmed that, as long as they act in good faith, the freeholder conducts the lease extension claim on behalf of the other intermediate landlords. In effect, the freeholder, I suppose, is now the County Court.
The head leaseholder can make an application to the County Court if they have no confidence in the competent landlord before the premium and the terms are agreed.
As regards the costs, the lease advisory service states that the leaseholder is not responsible for the freeholder’s costs at the tribunal.
We have found that this is an area unfamiliar to many solicitors and so we would be interested to hear opinions on whether the case I quote would apply and whether we would be responsible for the head leaseholder’s costs.
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