Leaseholders of terrace house not entitled to obtain freehold

The tenants of eleven terrace houses had no right to acquire the freehold title as their leases excluded certain structural parts of their property.

That was the decision of the High Court in a case involving Freehold Properties 250 Ltd v Beverley Ann Field & 18 Ors (2020).

Freehold Properties appealed against a decision of the County Court that 11 of its properties fell within the scope of the enfranchisement regime under the Leasehold Reform Act 1967.

The properties in question were terraced or semi-detached houses on an estate.  The leaseholders sought declarations as to whether they were entitled to enfranchise under Part I of the Act.

The terms of the leases excluded certain structural parts of the property such as load bearing walls, the foundations and the roof.

Freehold Properties contended that the leaseholders had no right to acquire the freeholds, arguing that they fell outside the scope of the Act.

The recorder ruled in favour of the leaseholders, but the High Court has reversed that decision.

It held that under the Leasehold Reform Act 1967, the phrase “a tenant of a leasehold house” should be read as “a tenant of substantially the whole of a leasehold house”.  This meant tenants could not qualify for enfranchisement where the lease did not extend to the roof or the foundations, as in this case.

Please contact our team on 01228 585716 if you would like more information about the issues raised in this article, or if you have enquiries about how to acquire the freehold of a leasehold property.