FH forfeits and sells before 6 months window for relief?

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    FH forfeits and sells before 6 months window for relief?

    999yr Long lease commercial, lessee in breach, S146 served, S146 expires without being complied with, FH re-enters and changes locks.

    Now... LH can go to court to claim relief from forfeiture for the remediable breach, usually within 6 months or so. BUT lets say once FH has re-entered he then immediately contacts Land Registry for them to remove the lease from his freehold title, thus converting a ~£3k freehold reversion to a £150k owned outright property...

    https://www.gov.uk/government/public...-on-forfeiture

    -> "An interested person may apply to the court for relief from forfeiture. However, this is not in itself a valid ground for objection to an application to HM Land Registry based upon determination on forfeiture."

    So if FH acts quickly he can determine lease at LR before LH can claim relief. And then quickly offload this now very valuable property asset in an auction sale. The sale proceeds go to his FH company, which he immediately withdraws to his personal funds and winds up the company by which time the court later grants relief but OH NO the property is no longer the FH's, so no relief is possible.

    The court can't order the sale proceeds to be paid to LH instead because the money has left the company and it's now either and empty shell company or already closed at Companies House.

    This sounds stupid and ludicrous but actually possible accordingly to the LR link above which doesn't postpone the determination even if relief is being claimed!?!

    Am I correct or is the another safeguard(s) to protect the lessee seeking relief??

    #2
    Once the Land Registry have closed the title and a new lease granted there is no redress for the lessee seeking relief from forfeiture

    The land registry will write to any party shown in the charges register and the tenant before closing the title - therefore illustrating the need to make sure the land registry has up to date records of your address and contact details

    Consider this. The person who buys the property at auction relies on the Land Registry records which does not disclose that the Land Registry have determined an earlier lease by forfeiture - so why should that person be denied the property they have just bought relying on the Land Registry records lose what they have paid to a lessee has breached the lease.

    Having a very small mortgage against a leasehold property may be safeguard


    Comment


      #3
      Couldn't happen. Service of s146 on it's own is insufficient to forfeit property and tenant can claim relief long before land registry stage.

      Comment


        #4
        sgclacy So the lessee has to desperately hope that the court hears their relief from forfeiture claim before the LR determine the lease? How would a mortgage make any difference?

        Section20z ? On commercial premises you serve s146 and then wait out its stipulated time period, normally 6-12 weeks and if breach is not remedied you can re-enter to forfeit when lease permits this. I don't understand your point?

        Assuming lessee claims relief around the time FH forfeits by reentry (and contacts LR to close off the leasehold title) then reading the quote above from LR website, the lessee is powerless to stop the LR determination despite having lodged a pending claim for relief at court...

        Comment


          #5
          The land Registry would write to both the tenant and those with a mortgage over the property if an application is made to register a new lease - if it is the intention of the lessee to seek relief from forfeiture and that is communicated to the Land Registry then they will not process the application until the outcome of that hearing

          Comment


            #6
            What you say makes logical sense but it states the opposite of this on their website guidance:

            https://www.gov.uk/government/public...-on-forfeiture

            3rd para down under heading 8. -> "An interested person may apply to the court for relief from forfeiture. However, this is not in itself a valid ground for objection to an application to HM Land Registry based upon determination on forfeiture."

            I read that as meaning that just because lessee informs the LR that they are waiting for relief from forfeiture, this will NOT be a valid ground to halt the LR determination going ahead. i.e you would need a valid ground before the LR can postpone it.

            Hmm, have I overlooked something? Is there any case law on this or LR guidelines that confirm the LR must wait until the relief hearing outcome?




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