Home > News > Important new case on collective enfranchisement of complex modern developments

Consensus Business Group (Ground Rents) Ltd v Palgrave Gardens Freehold Company Ltd [2020] EWHC 920

23 April 2020

This case concerned a s13 Notice by which the tenants of a development comprising five blocks claimed the freehold of the blocks and the surrounding amenity land under Chapter 1 of the Leasehold Reform, Housing and Urban Development Act 1993. The Appellant landlords challenged the claim on the grounds that the Notice was unclear as to what was claimed as part of the specified premises and what was claimed as additional land, that there was no jurisdiction to amend the Notice, and that even if the Notice could be amended the five blocks could not be claimed in one notice as they were structurally independent.

The issues stemmed in part from the nature of the development. The blocks appeared to be one building, but the expert engineers agreed that the blocks were each detached in the sense that they did not derive support from each other, and were separated by movement joints. At lower ground level here was an underground car park which ran under the blocks and much of the adjoining amenity land, also separated from the blocks by movement joints.

The s13 Notice claimed the land edged blue on the plan, but noted that the plan only showed the above ground footprint of the building. It also claimed as additional land such parts of the premises as could not be claimed under s1(1), including the car park. The landlord contended that the descriptive words rendered it unclear what was claimed, and in particular whether the car park was claimed as part of the specified premises. It contended that the Notice was invalid if a reasonable recipient would be left “in no reasonable doubt” as to what the notice meant. The Judge, Falk J, held that the test was simply whether the notice was “quite clear to a reasonable tenant reading it”. She held that the premises were identified primarily by reference to the plan, and that it was quite clear that what was being claimed was limited to the land edged blue, that is excluding the underground car park.

On that basis, the tenants sought to amend the Notice under schedule 3 paragraph 15 of the 1993 Act to claim as part of the specified premises the whole of the underground car park and land and airspace above it.  The landlord opposed the amendment on the ground that the additional land which was being claimed was not part of the specified premises, and could only be claimed as additional land under s1(2). It argued that the jurisdiction to allow an amendment to a s13 Notice only applied to land the acquisition of which was mandatory. Falk J held that in fact the car park was part of the specified premises, whose acquisition was mandatory, and allowed the amendment on that basis. She expressed the view, obiter, that the power to amend was also available in relation to land whose acquisition was optional.

The final issue was whether the freehold could be claimed of the whole development by one s13 Notice. The landlords contended that on the expert evidence, each block was structurally detached, and more than one detached building could not be claimed in the same notice. They relied on the decision in Deansgate (Residential) Ltd v No.1 Deansgate RTM Company Ltd [2013] UKUT 580 in which it was held that buildings separated by a weathering detail were each structurally detached. The landlords contended that whether a building was structurally detached should be determined on the basis of the evidence of structural engineers, not on the basis of the looser test of  whether the attachment was “appertaining or relating to the essential or core fabric of the building” adopted by the Upper Tribunal in CQN RTM Co Ltd v Broad Quay North Block Freehold Ltd [2018] L&TR 26 (UT). Falk J held that structural detachment does not necessarily require structural independence in the engineering sense of absence of structural support, but also preferred the test of whether the attachment was structural to the test put forward in CQN. On the facts, she held that the blocks were not structurally detached at basement level, because they included the parts of the car park beneath them which were not detached from the rest of the car park. She also held that the design and function of the development as a single whole, with movement joints between blocks, were relevant and sufficient to distinguish the case from Deansgate.

Accordingly, the Judge upheld the decision of the Recorder that the Notice was valid, and the tenants were entitled to claim the freehold.

Tom Jefferies acted for the Landlords

icon-accordion-chevron icon-arrow-left icon-arrow-right icon-chevron-down icon-chevron-left icon-cross icon-download icon-letter icon-linked-in icon-phone-outline icon-phone icon-search icon-search icon-select-chevron icon-top-right-corner icon-twitter