Absentee Freeholder

• Step 1 - Looking for the freeholder

  Due diligence including contacting freeholder usually including:

  1. advertising in the 'London Gazette' (circa £200 plus VAT)
  2. a trail of Land Registry searches to try to trace the Freeholder
  3. Companies House searches
  4. Obtaining copies of any 'title indemnity insurance' if required to take out when you got a mortgage
  5. Nominal costs for disbursements
• Step 2 – Application to Court

  To prepare and submit a County Court application for vesting order via the County Court. A vesting order is where the Court steps into the shoes of the missing freeholder.
• Step 3 – First Court Hearing

  Attendance at a Court hearing to explain papers.
• Step 4 – Tribunal

  Case gets transferred to the Tribunal who issue directions to comply with. Usually the applicant is responsible for preparing the bundle for the Tribunals assessment. The bundle will need to include the Expert's Valuation. Occasionally the Tribunal insists on an oral hearing rather than a paper hearing.
• Step 5 – Tribunal transfers matter back to Court
  The Tribunal's determination will then be supplied to the Court together with a draft order which the Court will amend or grant. The effect of this order will be to order the sale of freehold/extension of lease at the premium determined by the FTT.
• Step 6 – Second Court Hearing
  The Court will usually request a hearing to grant the Vesting Order.
• Step 7 – Execution of Legal Paperwork
  Executing draft transfer for freehold purchase or draft order for lease extensions. To pay the premium to buy the freehold or extend the lease into the Court along with Court costs and disbursements to deal with registration at HM Land Registry.

What do Leaseholders do if they want to:

• extend their lease of their property;
• collectively buy the freehold title to their property; or
• apply for their right to manage

but cannot contact their Freeholder? The absence of the Freeholder should not prevent leaseholders from carrying out any of the actions listed above. The Leasehold Reform Housing & Urban Development Act 1993 (&for RTM it is 2002 Act) allows Leaseholders to overcome the problem of not being able to trace their Freeholder. The way to do it is via a "vesting order", which involves an application to the County Court. If the County Court is to grant a vesting order they must be satisfied that reasonable efforts to trace the landlord have been made. Evidence of such efforts could include:

• a land registry search of the Freeholder’s last known address to prove that he no longer owns this property and has moved on to address unknown,
• witness statements to confirm that a visit to the Freeholder’s last known address has not provided a forwarding address, or
• an absentee freeholder title indemnity policy that may have been taken as a condition of mortgage by any leaseholder who recently bought a flat in the block.

The particulars of claim will need to set out whether the hopeful leaseholder or leaseholders have served their notice of claim on the Freeholder’s last known address or served such notice in the London Gazette or a local paper or a request that the Court grants a dispensation from the requirement to serve notice. A case bundle will need to include up to date Land Registry title searches, copy leases, copy notices, witness statements, draft land registry transfer forms and other matters highlighted above.

The County Court may set a date for a hearing or the district judge may be satisfied that reasonable efforts to trace the Freeholder have been made and rule on the basis of the facts as presented to him, without need for a hearing. When your case is proved, the Court will issue a judgment setting out that the freehold may be acquired by the leaseholder(s) with funds to be 'vested' in the Court and deferring the case to the First Tier Tribunal (Property Chamber) (formerly known in England as the Leasehold Valuation Tribunal LVT) for determination of a 'reasonable' premium.

The First Tier Tribunal (Property Chamber) (formerly known in England as the Leasehold Valuation Tribunal LVT) also hears many absentee Freeholder cases without a full hearing by issuing directions for the hopeful leaseholders to comply with and timescales for documents to be produced by. The documents the Tribunal will need include the order made by the County Court, copy leases, the valuation for the leaseholders, and proposed TP1 land transfer form. The Tribunal panel usually consists of a layperson, a lawyer and a valuer who make their determination from not only the evidence put before them but also their experience. There is therefore little point in putting a valuation before the panel that is not prepared in accordance with current caselaw and reflects market trends in respect of capitalization rates and improvement rates.

A possible advantage of the Absentee Freeholder process for the Leaseholders is that the process can reduce the delay and expense involved in undertaking the whole right to manage; (ii) lease extension or (iii) freehold purchase processes. The Leaseholders can save the cost of serving notices under these processes and will save the cost of negotiations with the Freeholder’s Surveyor because there is no-one to negotiate with as the First Tier Tribunal (Property Chamber) (formerly known in England as the Leasehold Valuation Tribunal LVT) will determine the case.

Can't find your freeholder? This needn't stop you extending your lease or buying the freehold. Yes there's a bit more paperwork to do, but that's where we can help

Why not talk to one of our Solicitors today
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