Unregistered leasehold title - no documents

We are trying to enforce a sale under s.103 of an unregistered leasehold property for which the leaseholder has no title deeds and of which we are the freeholder.

The property is mixed use although the condition of it means that it is uninhabitable and has been for a considerable length of time.

Notices have been served on the gentleman who we believe to be the owner (and also a more general notice to ‘the owner’ has been served at the property). We have never received any notices of the assignments of the lease (in breach of the tenant's obligations within the lease) and, despite some of these assignments having taken place post compulsory registration, the leasehold title has never been registered. The property has passed through family members and all previous ‘owners’ have now passed away (without probate being granted) – but there was never any proof of their ownership either (except for the missing title deeds).

In ordinary circumstances, we would be in a position to proceed with registering the necessary charges and proceeding to the sale but, in this case, there is going to be an issue with any new owner registering their purchase with the Land Registry.

The only document we have is a copy of the 999 year lease granted in 1897 but there are no copies of any assignments of that lease through to the current owner so we are therefore unable to even establish his ownership.

The owner is not cooperative with us and will not assist with getting the title registered as he does not want it to be sold. As he has never resided at the property, there is little documentary proof of his ownership and the neighbours would be unable to identify him as ‘the owner’.

Does anyone have any advice on how this situation could be resolved?

Thank you in advance - all suggestions would be gratefully received.

Elizabeth Walsh

Housing Practitioner - Sefton Council

 

 

Forums: 
Enforced Sale

Just an idea, you could speak to your legal services team and see if they would be up for forfeiture of lease.  The council maybe able to go through the process of forfeiting the lease without any fuss if the family are not that interested.  The lease will no longer exist therefore the property will revert to the council who can then either auction as  freehold, or should they wish to retain the freehold, auction as another 999 lease.

I am no expert in this field but there is no cost to the council as far as I am aware and the council gain from the sale of the property and also the added council tax it generates.  Well worth speaking to your legal chaps to see if they are up for it.

  

Terry Curnow

Liverpool City Council

Elizabeth

Further to your post

I would agree with Terry and suggest that forfeiture of the lease would be the sensible approach to try in the first instance.  We have used the procedure a few times and it has been fairly effective.

I am assuming that there is no mortgage in place.

The enforced sales  may be more difficult way to create a change of ownership.

Forfeiture of the lease - the riight to talke possession of the premises and prematurely determine the lease. this right must genrally be expressley reserved by the lessor.

There may be several breaches of the lease, there may be non payment of rent, breach of covenants (except repair) and  breach of the repairing covenant.

You would try and include as many of the above, but will probably rely on the breach of repairing obligation. I am assuming that the lease has an express forfeiture clause within it. Highly unlikley that it doesn't, but if there is no such clause this will be a problem.

If the lease was originally granted for 7 years or more and has atleast 3 years unexpired, then the provisions of the Leasehold Property (Repairs) Act 1938 apply.

This Act provides that whether a landlord is seeking to claim damages or to forfeit the lease for breach of repairing covenant., he / she must serve a notice on the tenant (leasholder) under S146 Law & Property Act 1925 (there are exceptions).

This notice will include:

  • Specifying the breach, and
  • requires it to remedied - if capable of being remedied and
  • requires compensation, if desired
  • The notice must also give a statement of tenants rights to serve a counter notice within 28 days

The tenant must be given sufficient time to remedy the breach.

If the tenant does serves a counter notice, then the landlord cannot proceed with the claim (damages or forfeiture), unless he has the leave of the Court. Such leave will only be granted in specified circumstances eg the value of the reversion has been substantially diminished.

Effecting Forfeiture - the landlord can effect forfeiture either by peaceable re-entry or through Court proceedings. Re-entry is generally quicker and cheaper than Court proceedings, as you would expect, but is only recomended where the busness premises are left unoccupied.

This is because of the provisions of Section 6(1) Criminal Law Act 1977 - an offence to force entry where there is someone present on those premises at that time.

This is the same legal provisions that squatters use to prevent forceful entry. They often will put a notice on the front door stating that "there is someone in occupation 24 hours a day". Therefore, everyone is put on notice and will then have the benefit of the above protection.

It is for this reason that squatting tends to be done in groups, so that there is always one person in the property.

Therefore, the most practical way of effecting entry of the business is to turn up after buisness hours, check no one is occupying the property and simply change the locks.

The lessor can apply through the Courts for relief from forfeiture, but in this case they would have to show that they are in fact the Lessor or have the relevant interest.

If you secure forfeiture of the lease, then you are free to re-sell the property on a long lease or freehold again, so you are obtaining the benefit of the current market value for the property.

Enforced Sales Procedure

You have not specified what legislation you have used to create the charge. Some legislation binds all estates and interests and others only bind the offending party.

There is also the issue of the value of the property itself, some of those issues have been covered in this post https://www.ehnetwork.org.uk/forum-topic/enforced-sale-property-unregistered-title

Potentially, you could pursue the enforced sales of the leasehold interest, but it is likely to be more difficult and conveluted.

In addition, if you enforce the sale and there are funds left over. You are acting as a trustee by virtue of  S105 Law & Property Act 1925 an therefore  the Limitation Act 1980 does not apply.

So you have to keep the funds indefintely.

So I would  stick with Terry's approach in the first instance, as it is likley to be more straight forward and in economical terms, the LA will be better off.

Let us know how you get on.

Regards

Andrew Lavender

Housing Training and Consultancy Ltd

This does not constitue legal advice and is purley for general information. You should always seek your own independent  legal advice.