Seddons played host to a well attended gathering of valuers, surveyors, agents and property investors when we hosted a presentation given by a specialist enfranchisement barrister, Philip Rainey, on 12th November.

Philip took the audience through some of the key developments in the field of leasehold enfranchisement that had taken place over the past 12 months.

Despite the fact that it has been on the statute book for over 40 years, the Leasehold Reform Act 1967 still provides fertile territory for lawyers arguing over such issues as "What is a house?" To the layman, this question may, at first glance, elicit an obvious answer. To the lawyers, however, the House of Lords case of Boss Holdings v GWEP [2008] took the matter further by deciding that a gutted and uninhabitable house was a "house."

More recent enfranchisement legislation also continues to provide bones of contention for the legal profession to pick over. The case of Howard de Walden v Aggio [2008] - about which we have already posted on this site - provides headlessees with the right to acquire a lease extension (so long as the right could not be exercised by a flat owner on an underlease). Philip outlined some of the consequences and areas of potential doubt that may flow from this decision - over the drafting of the new leases, its covenants and easements, and the debate over the marketabilty of them.

The signing of statutory notices continues to be a trap for the unwary. One of the difficulties in a collective enfranchisement involving a significant number of lessees (some of whom may live abroad) lies in coordinating the signature of the Initial Notice (section 13 Notice) by each flat owner. In Cascades & Quayside Ltd v Cascades Freehold Ltd [2007], those acting for the lessees had circulated blank signature pages to each of the lessees even though the body of the Notice had not been drafted. After the signatures had been collected, the Notice was put together. The Court of Appeal held that the Notice had not been validly signed on the grounds that it had been put together by an agent. For now, until either the courts decide differently or there is a change in the regulations, the safest option is to have one document fully drafted and for it to be circulated amongst all lessees for all of them to sign.

Philip also touched on the contentious case of Sportelli and went through a number of LVT decisions. The trend is that they seem to be following the controversial 5% deferment rate - although there was a success for one group of tenants in the LVT in mid-October 2008 when an extra 1% was added to the norm.

After the formal part of the evening, the fat was chewed over a glass of wine or two.

The credit crunch woes were left to one side and many thought that, even in these difficult times in the property world, leasehold enfranchisement could be of benefit to both landlords and tenants. Tenants may find that they can add value to their property and landlords may find that the premium received is a much-needed injection of capital to their business.