Wallace wins case for Hareford

June 2005

Wallace has successfully acted for Hareford, the long lessee of a property in Edgware/Burnt Oak, in a claim for enfranchisement under the 1967 Leasehold Reform Act against the London Borough of Barnet. Hareford will acquire the freehold for £16,123 against a market value of £111,395. The judgment was given on 17 May 2005, following the hearing on 18 March 2005.

The implications for the London Borough of Barnet of Hareford being permitted to enfranchise under the 1967 Act are potentially very significant. The Borough owns approximately 70 similar properties in the vicinity. Evidence was given to the court by the Borough’s Estates and Valuation Manager, who said the Borough could lose £6million to £7million, an amount which would be taken from the Housing Revenue Account; and severely reduce the Borough’s expenditure on social housing.

Simon Serota, Head of Property Litigation at Wallace LLP, said: “Many property investment companies and landlords haven’t yet woken up to the opportunities now available to limited company tenants to take advantage of leasehold enfranchisement rights following the introduction of the Commonhold and Leasehold Reform Act 2002.”

Background

The Commonhold and Leasehold Reform Act 2002 abolished a residence requirement for most leasehold enfranchisement claims thereby enabling limited companies for the first time to take advantage of enfranchisement rights.

Hareford claimed the freehold pursuant to the provisions of the Leasehold Reform Act 1967. The 1967 Act gives long lessees of houses the right to acquire their freehold and there is long established authority (of the House of Lords) which means most High Street shops with residential accommodation above them are regarded as ‘houses’ and therefore qualify for enfranchisement under the 1967 Act.