Flat owners exercising their right to a new lease have the opportunity to seek changes to their existing form of lease within that process. There are limits however for the protection of both parties.
An example of this is given in the Upper Tribunal decision of Park v Morgan [2019] UKUT 20(LC).
In this case the flat owner succeeded in the first instance in obtaining two changes to the existing lease; the landlord’s insurance obligations were modernised to make the lease more attractive to lenders and so maintain saleability. In addition the right of access to a garage held within the flat lease was modified to allow access with vehicles as well as on foot where access with vehicles had been prohibited previously.
The landlord appealed. The Upper Tribunal refused the landlord permission to appeal the insurance point on the basis the First-tier Tribunal was entitled to find that the relevant criteria were met namely that the introduction of lender’s standard requirements as regards insurance since the existing lease was granted was a change of circumstance such that it would be unreasonable to omit reference to them.
As regards the garage, the appeal went forwards. A modification of the existing lease is only available where it is “necessary to do so in order to remedy a defect”. Case law has made it clear that it is not sufficient that the proposed variation may be convenient or consistent with current practice (Lands Tribunal decision in Gordon v Church Commissioners for England (2007) LRA/110/2006). It must be a “shortcoming below and objectively measured to satisfactory standard. It is not sufficient for a provision to be a defect only when viewed from the stand point of one or other party”.
When the Upper Tribunal examined the background behind the seemingly odd restriction on access to the garage to foot only they discovered there was a good reason for it, namely that use of the other flat’s garage would be impaired if access with vehicles was allowed to that serving the upper flat. So the test was not met.
This is a useful reminder of the limited help the lease extension legislation can provide flat owners with when looking to correct a “defect” in their lease.
Mark Vinall, Partner, Lease Extension and Enfranchisement at Winckworth Sherwood
