Since COVID-19, there have been significant delays in buyers getting themselves registered as the owners of properties; in some instances, the delays can last for up to three years.
This can cause problems when the new owner wants to undertake common property management functions but finds himself in a position where they are the legal owner of the property, but the Title Register does not reflect that.
The problem can be especially difficult if the building is a mixed-use building where there are commercial units on the ground floor and residential flats above, and the landlord needs to undertake repairs to the roof on a fairly urgent basis.
In a mixed-use building such as this, a landlord has to serve Section 20 Notices under the Landlord and Tenant Act 1985 on its tenants before starting any work and to preserve the landlord’s right to recover costs in excess of £250 per tenant in relation to the works. However, if the landlord is not the registered owner of the property, are they in a position to serve Section 20 Notices and go through the consultation process, or do they have to rely on the old owner to cooperate with that process?
If the works are of an urgent nature, where they might be for example, if there is heavy rainfall which means water is leaking into the top floor flats, then the owner of the building would need to make an application to the First Tier Tribunal (Property Chamber) to seek a dispensation from carrying out the consultation procedure under Section 20 at all.
The decision in RM Residential Limited v. West Acre Limited [2024] suggests that the dispensation might be granted, and the new owner of the building can carry out the works to the building during the registration gap, (i.e. the period between the purchase of the freehold and registration of that purchase at the Land Registry).
A new owner would be well advised to check the terms of the sale contract to ensure that there are no terms which expressly cater for this situation and also confirm whether Notices of Assignment have been given to the tenants of the building under Section 3 of the 1985 Act before making an application for dispensation.
In the RM Residential case, the First Tier Tribunal initially refused dispensation on the grounds that the works had not been urgent and because the landlord was not the legal owner of the land at the time and therefore had no entitlement to enter the property and carry out the work. However, on appeal, the Upper Tribunal reversed that decision and granted the dispensation. When considering dispensation application, the FTT will consider whether there is any prejudice to the tenants in dispensing with the requirements to comply with Section 20 of the 1985 Act. If the works are urgent then there doesn’t appear to be any obvious prejudice if the dispensation is granted.
It is always advisable to take legal advice if you are considering serving Section 20 Notices under the Landlord and Tenant Act 1985 or if you are concerned that you may have purchased a property but are not yet the legal owner of the property.
