FH forfeits and sells before 6 months window for relief?

  • Filter
  • Time
  • Show
Clear All
new posts

    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...


    -> "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??

    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


      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.


        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...


          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


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


            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?



            Latest Activity


            • Lease extension - should I pursue non statutory?
              by theta
              I received a section 42 notice for a statutory lease extension for a flat where I own the freehold. There are 87 years remaining on the lease, and ground rent review is every 10 years linked to RPI (next review 2027).
              My appointed managing agent recommended a solicitor with experience on this,...
              25-09-2020, 07:56 AM
            • Reply to Lease extension - should I pursue non statutory?
              by sgclacy
              Flying freehold is quite correct, but his words have incorrectly interpreted by the OP.

              Both individuals and companies can roll over gains resulting from statutory lease extensions. Individuals pay CGT and companies pay corporation tax on their gains....
              26-09-2020, 21:26 PM
            • Freeholder's consent
              by stressed12
              I am freeholder and tenant in a converted Victorian house. The lessee of the top flat wants to sell and asked for written consent for:
              1) right to pass from a driveway that leads to a parking spot. His lease mentions the right to park in that spot (along with another lessee, so 2 flats have the...
              28-04-2020, 18:46 PM
            • Reply to Freeholder's consent
              by Section20z
              Why did you tell them ?
              If they want a ridiculous amount then just back out, no great loss and unlikely they will take action for the breach.
              If they do then deal with it then ....
              26-09-2020, 20:53 PM
            • Reply to Freeholder's consent
              by Vednaik
              Hi, I want to buy freehold of my semi-detached property and have approached the landlord. The lease is for 800 years and ground rent is 7£ per annum. The previous owners have done a loft conversion . I being a first time buyer was unaware of the consent thing and had trusted that solictors will sort...
              26-09-2020, 20:36 PM
            • Front garden to parking
              by mikkimolly
              I have a long lease on a flat in a Victorian converted building with a demised parking space on the driveway. The Landlord is currently selling the two other flats in the building, which previously were tenanted. To make them more profitable he has concreted over the front garden to create a parking...
              25-09-2020, 15:10 PM
            • Reply to Front garden to parking
              by mikkimolly
              Thanks Scott, yes this has been a wakeup call for me, believing that the church would act in good faith. Being told that their changes would not impact my lease, when i asked for further and better details of the changes was arrogant and patronising. I have mulled this over and decided to seek specialist...
              26-09-2020, 19:00 PM
            • management and maintenance costs for parking court
              by cooked
              sorry this may in the wrong forum but I could not see a forum title which was relevant
              my wife and I own (leasehold) two flats in a block of 3 flats
              each of the 3 flats has two parking spaces in a 30 space parking court
              in 2018, we became the RTM for the building but the parking court...
              25-09-2020, 22:30 PM
            • Reply to management and maintenance costs for parking court
              by AndrewDod
              What does your lease say?
              What the lease says is what you do.

              I doubt the lease and RTM order say that they can charge a massive fee for managing the car park....
              26-09-2020, 17:29 PM
            • Reply to Lease extension - should I pursue non statutory?
              by theta
              Thank you, it's in my name so can't roll the CGT (but I assume it's partial disposal so shouldn't be any immediate tax due anyway?).
              This option to buy back the lease is quite interesting, I didn't know about it. Is it standard for all statutory lease extensions? Can you point me somewhere to...
              26-09-2020, 14:19 PM