Can I buy the freehold of my property from an absent landlord?
This article was first published by City AM, Friday 20 April 2018
As a group, you can negotiate the purchase of the freehold or, subject to relevant criteria, exercise statutory rights pursuant to the Leasehold Reform, Housing and Urban Development Act 1993 (1993 Act) to force a landlord to sell the freehold of the building.
You do not say whether the landlord is an individual or a company. If it is a company you must check if it still exists. The company may have been dissolved and the freehold of your building may now be vested in the Crown.
There is a special division – the Bona Vacantia Division (BVD) – a Government legal department that deals with such matters. The BVD will look to sell the freehold to the majority, if not all, of the leaseholders and generally within 12 months of being approached.
Depending on the length of your leases, the BVD may instruct a district valuer to value the freehold interest and you will be liable for BVD’s costs. If the company is in receivership (being brought to an end) and the assets of the company are being redistributed, the receiver (a party appointed to run the company) is bound to step into the shoes of the landlord and could progress a sale of the freehold.
If the landlord is an individual and is bankrupt, you may need to progress your negotiations or a formal claim against the Trustee in Bankruptcy who is treated as the landlord.
If the landlord is missing and cannot be found, and all reasonable efforts have been made to locate the landlord, you can pursuant to the 1993 Act make an application to a County Court for an Order to dispense with the need to serve a formal claim to acquire the freehold upon the missing landlord.
The Court will defer the matter of the premium payable and terms of the new lease to the First Tier Tribunal and once terms are agreed a Court or another party authorised by the Court can execute documents in the landlord’s absence. If the individual has died, you can seek to progress matter with his/her Estate.
Depending, therefore, on the status of the landlord and circumstances you will see there are several (and other) options available to acquire the freehold.