Landlords had sold flats to Frogmore without serving a section 5 notice under the 1987 Act. Prior to receipt of a purchase notice, Frogmore granted certain leases in the block of flats to another party.
Held: The agreements were upheld, and were not shams even though they had been intended to work around the 1987 Act.
Criticising the anomalies under the Act, Sir Thomas Bingham MR said: ‘Nothing in section 12 imposes on the new landlord a duty not to dispose of his interest, such as is imposed on the original landlord by section 6(1). It is unclear why not. There is nothing in section 12 which gives the tenants a right to require a subsequent purchaser from the new landlord to dispose of his interest to the tenants’ nominees. A limited right is given by section 16, but it is not equivalent to the right given by section 12(1) against the new landlord. It is again unclear why not. Counsel discounted the suggestion that an acceptance notice under section 6(1)(b) or a purchase notice under section 12(1) might create a equitable interest in the land capable of registration as a land charge or protection by a caution, and I am not inclined to disagree. But one could wish that the Act provided as many answers as it raised problems.’
‘A purchase notice must give adequate notice to the new landlord of the qualifying tenants’ desire to purchase the estate or interest that they should have been offered by the original landlord. That is imperative, in the sense that it must be followed to the letter, but some of the other requirements of section 12 are only directory.’
Sir Thomas Bingham MR described the work of the committee upon whose work the 1987 Act had been founded: ‘the committee intended occupying tenants to have a right to acquire the reversion to their leases when their landlord proposed to part with it, and that the ultimate objective was to give the tenants in a block where the majority wanted it a power to manage the block themselves and so to have a greater say in their own affairs.’
Judges:
Sir Thomas Bingham MR, Hobhouse LJ
Citations:
[1996] 1 All ER 312, [1997] QB 858
Statutes:
Landlord and Tenant Act 1987 5
Jurisdiction:
England and Wales
Citing:
Cited – Denetower Ltd v Toop CA 1991
The tenants sought to acquire the freehold under the Act. The landlord sought to exclude the gardens and other appurtenancies.
Held: They had been included in the demise of the flats and were to be included in the title to be purchased. The . .
Cited – District Bank v Webb 1958
The court was asked whether a lease constituted an incumbrance on a title: ‘In the first place, I am not satisfied that a lease was an incumbrance to these parties. It is true that in certain circumstancess a lease may be regarded as an incumbrance, . .
Cited – Nolan v Eagle Wharf Developments Ltd LVT 1992
Tenants set out to purchase the freehold under the Act. The landlord had later granted a lease of the roof-space and of a car park. The tenant under that new lease did not come within section 4(2).
Held: The tenants acquired the freehold free . .
Cited – Jones v Wrotham Park Settled Estates HL 1979
An attempt to determine the meaning of an enactment should not cross the boundary between construction and legislation: ‘My Lords, I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language . .
Cited – Englefield Court Tenants v Skeels LVT 1990
Tenants sought to exercise their rights to purchase the freehold under the 1987 Act. The landlord had granted a reversionary lease of part to her husband.
Held: The tenants took the freehold subject to the lease. . .
Cited – W T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .
Cited – Furniss (Inspector of Taxes) v Dawson HL 9-Feb-1983
The transfer of shares to a subsidiary as part of a planned scheme immediately to transfer them to an outside purchaser was regarded as a taxable disposition to the outside purchaser rather than an exempt transfer to a group company. In defined . .
Cited – Gisborne v Burton CA 1988
The land-owner held an agricultural holding. He wanted to let it but, in doing so, to deprive the tenant of the benefit of the statutory regime giving security of tenure. So he let the property to his wife, and his wife granted a sub-tenancy to the . .
Cited – Hilton v Plustitle Ltd CA 1988
The landlord and the ‘tenant’ specifically agreed that the tenancy should be granted to a limited company formed by the tenant, which it was legitimate for them to do so as to avoid the Rent Acts, and the tenant had taken legal advice.
Held: . .
Cited by:
Cited – Kay-Green and Others v Twinsectra Limited CA 15-May-1996
The former landlord had sold a number of buildings, some of which fell within Part I of the 1987 Act. The section 5 notice had not been served. The vendor had also failed to comply with his duty (under s 5(5)) to ‘sever’ the transaction, and sell . .
Cited – M25 Group Limited v Tudor and others CA 4-Dec-2003
Tenants served notices under the Act requiring information about the disposal of the freehold. The landlords objected that the notices were invalid in failing to give the tenants’ addresses as required under the Act.
Held: The addresses were . .
Cited – Englewood Properties Limited v Patel and Another ChD 16-Feb-2005
The claimant was a property developer, which sought to sell a row of shops at auction. One lot was a Woolworths store, where the company owned both freehold and leasehold interests, with Woolworths occupying an underlease, which the claimant had . .
Cited – Kensington Heights Commercial Company Ltd v Campden Hill Developments Ltd CA 21-Mar-2007
The head landlord had accepted a surrender of the head lease and granted a new lease. but for a longer term. The claimant company sought, on behalf of the qualifying tenants of the estate, an order for the disposal to it of the original lease under . .
Cited – Bankway Properties Ltd v Penfold-Dunsford and Another CA 24-Apr-2001
A grant of an assured tenancy included a clause under which the rent would be increased from pounds 4,680, to pounds 25,000 per year. It was expected that the tenant would be reliant upon Housing Benefit to pay the rent, and that Housing Benefit . .
Cited – Mainwaring and Yeoman’s Row Management Limited v Trustees of Henry Smith’s Charity (No 2) CA 3-Oct-1996
The tenants had sought to purchase the freehold under the 1987 Act. One tenant having signed an ‘irrevocable’ agreement to participate, withdrew his involvement in the purchase, and the remaining number of tenants were no longer a sufficient . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 20 December 2022; Ref: scu.194051