Freeholder selling but wishes to retain basement

[Lottiey]

Tenants collectively buying the freehold of block of flats at auction, but the freeholder removed the basement and airspace from the auction listing. How does this work? Will there be 2 freeholds or will the landlord have to be issued with a long lease for the space. There are 12 other units.

I’d appreciate the legal and experienced hivemind of this forum.

[Lawcruncher]

Another freeholder who wants to have his cake and eat it.

How it happens depends on what the auction particulars say.

Whether it works so far as the air above the roof has on depend on various factors, Do the tenants have rights over the basement?

I would recommend the tenants to serve notice to collectively enfranchise before the auction and register the notice at the Land Registry. That way they should get the whole building and stop the auction. You do not want to be buying into a complex situation.

[sgclacy]

If the property is going to auction, I suspect that the leases may already have been granted for the roof and basement

If not, then the price of enfranchisement would need to include the potential development value.

If the building was built post 1945 and prior to 2018 there may well be permitted development rights to enable the freeholder to add to more levels. The ability to develop that area may be stopped according to the rights granted in the lease to the current lessees.

The granting of those two leases can result in Section 5 notices having to be issued, however if the freeholder is part of an established group company those rights may be lost as the landlord can transfer the new leases to a subsidiary company if the subsidiary has been part of the group for more than 2 years. For some reason, a number of freeholders do not appreciate that the grant of a airspace or a basement devoid of planning permission would trigger a Section 5 notice