A Barrister’s role in a lease extension claim

Applying for a lease extension should be less complex than a collective enfranchisement application. All the leaseholder is trying to do is to substitute the existing lease of the flat for one that is 90 years longer and will usually be in the same terms as the existing lease, save that the ground rent has been extinguished.

What could possibly go wrong? In theory a great deal, though, in practice, particularly in the current nervous property market, most claims complete in a more or less satisfactory manner on terms agreed through negotiations between the parties, usually conducted through the respective valuers.

However, this is not always the case.

It is when (or preferably before) complications strike that it is important to obtain specialist legal advice, whether from a barrister, or from a solicitor with sufficient experience in enfranchisement litigation i.e. in dealing with the Court or FTT/Upper Tribunal fall out from a contested claim. 

Specialist advice is likely to be required where the landlord responds to the leaseholder’s notice of claim by denying the right to a lease extension and/or asserting that the notice of claim is invalid.

It is particularly important to ensure that the claim is effective when, as frequently occurs on the sale of a flat with a short unexpired lease term, the flat is sold with the benefit of a tenant’s notice of claim served by the vendor leaseholder. In such cases, if it goes wrong, it will not be possible for the purchaser to serve a further tenant’s notice until the purchaser has owned the flat for at least 2 years. The resultant delay could be disastrous, particularly if the lease has less than 2 years to run.

What if the extent of the premises originally demised by the existing lease does not accord with the facts on the ground e.g. if, over the years, the leaseholder, or a former leaseholder, has incorporated the roof void into the flat, or erected a balcony on a flat roof outside the flat, or taken exclusive possession of land that started out as communal amenity land or parking, or has otherwise encroached upon the landlord’s retained property. Depending on the circumstances it may be that these additional areas should be treated as accretions to the existing lease and therefore fall to be included in the extended lease granted on a lease extension claim. Pursuing such a claim will require specialist legal advice.

At a FTT valuation hearing (which will be required if the claim is admitted but the parties cannot agree the premium for the new lease) a valuer will often be retained to act in a dual role, as both advocate and expert witness. In a typical low to medium value claim this should  be a cost effective approach (as the FTT only has very limited powers to award costs  each side will pay its own costs of the hearing regardless of the outcome).

The factors that point to instructing a barrister for the hearing are: (1) value  i.e. how far the valuers are a part; and (2) legal complexity e.g. if there is a valuation sensitive dispute as to the terms of the existing lease, such as its rent review provisions, or the extent of its restrictions on sub-letting or alterations.

To this I would add that the role of advocate at a hearing is fundamentally different to that of the expert witness. The advocate’s duty is to promote the interests of the client by making submissions as to the law on point and the factual and expert evidence before the FTT. The advocate cannot give evidence or venture a personal opinion as to the law or the facts (unless asked to do so by the FTT, which, generally, should not happen). An expert witness on the other hand owes an overriding duty to the FTT to assist it by giving independent, objective and unbiased expert evidence i.e. to tell the FTT what the expert’s true opinion as to the disputed values is.

An expert witness doubling up as advocate necessarily involves trying to wear two quite differ hats/a reversible piece of headgear simultaneously: as a fashion statement this is fraught with danger and it is unlikely to be practical in rough conditions.

Stan Gallagher is a Barrister at Tanfield Chambers, London, specialising in landlord & tenant law.

STAN GALLAGHER

12th  August  2011

Tanfield Chambers

2-5 Warwick Court

London

WC1R 5DJ

DX:     46 London Chancery Lane

Tel:      020 7421 5300

Fax:     020 7421 5333                       

Email: stangallagher@tanfieldchambers.co.uk