That case, Boss Holdings v Grosvenor West End Properties had, of course, more to it than I suggest, but it does show that enfranchisement, for all the efforts of amendment to clarify and simplify remains complex and apt to reveal as many new issues as it resolves, as time goes on.

Three other recent cases, this time under the 1967 Act’s offspring, the Leasehold Reform Housing and Urban Development Act 1993, also present issues to ponder for the future.

Landmark case

First, Sportelli. Readers of News on the Block will already have read the extensive coverage of this landmark case. In short it establishes for all enfranchisement valuations a national deferment rate and a rate for Prime Central London (PCL). It makes clear that the PCL is a specialised market, something that few would argue. But, does this open the door to other specialised areas? Even an amateur valuer understands that the three most prominent considerations to valuation are location, location and location. So, will cases come forward where there are arguments that other specialised markets in England and Wales deserve treatment akin to the PCL?

Common parts

The second case, one where there was little case law on the substantive issue, concerned qualification for collective enfranchisement, specifically the 25 per cent rule. This is detailed in section 4 of the 1993 Act, and basically it requires that a building can have no more than 25 per cent of its internal floor space in non-residential use in order to qualify for collective enfranchisement. That calculation excludes common parts. In Marine Court (St Leonards on Sea) Freeholders Ltd v Rother District Investments, a case decided in the County Court, the landlord sought to challenge collective enfranchisement on the basis that the communal areas used exclusively by the commercial occupiers were non-residential and not “common parts”. It followed that, as part of the non-residential area, it made the aggregate of these areas more than 25 per cent of the total internal floorspace of the premises. The judge thought otherwise feeling that the language of the 1993 Act did not support the view that for an area to form a common part it had to be used by all the occupants.

What is eye-catching about Marine Court is that it is a mixed-use property. PPG3 – the government guidance to planning authorities on the treatment of housing within the planning process – gives a clear steer towards, among other things, mixed-use developments. Thus, as hard-pressed planners approve the increased use of mixed-use premises the 25 per cent rule may be the subject of increased debate.

Life after

But what of life after enfranchisement? Commentators, naturally, have tended to focus on the motivation for it and the ups and downs of the process. Those who enfranchise no doubt hope all their fellow flat owners will share their vision, but that is not always the case. In Carver v Burnham Court Ltd, the third case for discussion, and a recent decision of the London LVT, that is precisely what occurred. The basic facts were that in the midst of Carver’s application for a new lease under the 1993 Act, Burnham Court Ltd (BCL) – the nominee purchaser – served an Initial Notice to acquire the freehold of the building. The result was the suspension of Carver’s notice pending the freehold acquisition. In due course this was resolved and BCL, as the new landlord, served Carver, a counter notice. That made plain that BCL sought to grant a lease on the same terms as those granted to the tenants who participated in the freehold purchase. It included provisions for a reserved fund, the spending of which would be voted for a by majority of tenants, and a contribution by the tenants to directors’ and officers liability insurance taken out by BCL. BCL wanted to achieve uniform and contemporary leases for all tenants in the block; and felt director’s insurance was necessary to prevent discouraging the able from volunteering to manage the block. Carver did not agree and the matter proceeded to the London LVT, where it too, for the most part, did not agree.

BCL’s aim was “to inaugurate a new era in the block’s history.” A fine ambition, but one that on the facts of the case was not compatible with the 1993 Act. The effect of the decision is limited to just these parties – as LVTs do not make precedent – but another enfranchised group could make a similar application. One wonders if this too may become more common – blocks of flats that enfranchised some years ago and without full lessee participation, seeking to redress historic problems with their leases by grasping the opportunity when it presents itself in lease extension applications. No doubt time will tell.