Landlord wins court case after transferring property to wife

A landlord who temporarily transferred ownership of a block of flats to his wife has won his appeal in an enfranchisement case.

The court heard that in 2004, the landlord’s tenants gave initial notice of their intention to exercise their legal right to acquire the freehold of the property.

The landlord served a counter-notice disputing the proposed price. Some terms of acquisition, including the purchase price, were agreed in 2006. Any outstanding terms which the parties could not agree were to be determined by the leasehold valuation tribunal (now the First-tier Tribunal).

The landlord transferred the freehold to his wife in October 2012 and she transferred it back to him in January 2013. The tenants did not register the initial notice against the landlord’s title until July 2013.

Shortly afterwards, the matter was remitted to the tribunal to settle the form of the transfer. The landlord disputed the tribunal’s jurisdiction and he sought to reopen the issue of price.

The tribunal held that despite the wife’s period of ownership, the initial notice remained valid against the landlord and it therefore retained jurisdiction to determine the terms of the transfer.

It also held that as the purchase price had been agreed by the parties, it was not open to either party to have that reconsidered.

However, the Court of Appeal has reversed those decisions.

It held that once the freehold had been transferred to a third party, the original freeholder who received the initial notice ceased to be the freeholder within the meaning of the law and could no longer be the relevant party with whom to engage in the enfranchisement process or against whom to make an application.

Consequently, the First-tier Tribunal had no jurisdiction to determine the disputed terms of transfer.

The landlord’s appeal was allowed.

Please contact Janice Young if you would like more information about the issues raised in this article or any aspect of commercial property law.