What to do when you have an Absentee Freeholder

When owning or buying a leasehold property, finding you have an absentee landlord can be concerning as it raises a number of questions such as:

A leaseholder can apply to the county court with a vesting order so that to if the freeholder is absent and the leaseholder is eligible, then the court will step in and take over the responsibility of the freeholder. In this article we explain the process of what you need to do if you have an absent landlord for the purposes of extending your lease or buying the freeholder, what is the vesting order process and what are the vesting order costs. If you have served a section 42 or section 13 notice and your freeholder has failed to respond then click here to find out what to do.

We've also summarised the vesting order process in a Route to a Vesting Order diagram for ease of understanding, please click on the link or scroll down to view it.

Under the Trustees Act 1925: Part IV - Vesting Orders, in relation to the freeholder's obligation to send a counter notice, it states:

"...(vi)Where a trustee jointly or solely entitled to or possessed of any interest in land, or entitled to a contingent right therein, has been required, by or on behalf of a person entitled to require a conveyance of the land or interest or a release of the right, to convey the land or interest or to release the right, and has wilfully refused or neglected to convey the land or interest or release the right for twenty-eight days after the date of the requirement "

Having completed a lease extension valuation by a RICS surveyor you’ll then instruct a solicitor to serve a Section 42 Notice on your freeholder. The section 42 notice starts the process to extend your lease by 90 years for a peppercorn rent (no rent). The freeholder has 2 months to respond with a section 45 counter notice. This formal lease extension process is governed by the Leasehold Reform, Housing and Urban Development Act 1993.

Many leaseholders have little or no contact with their landlord, other than to pay for your ground rent or service charges; even then you might only work with the managing agent instead of the actual freeholder.

If you do not know the address of the freeholder then you cannot serve the freeholder with a section 42 notice. You must first attempt to make contact with the freeholder using the methods set out above and then after this you make an application to court for a vesting order. If successful the court will take over the responsibility of the freeholder and you serve the section 42 notice on the court (not the freeholder).

If you are looking to buy your freehold regardless of whether you intend to use the informal or formal route you have to locate the freeholder. If you cannot, then the directions above apply, leading to the vesting order.

The court, similar to a lease extension case, would normally rule in favour of the premium present in your Initial Notice in the absence of the freeholder.

To find out more, click on Collective Enfranchisement Process.

An undefended vesting order for an absentee freeholder costs in the region of £1,620 INC VAT plus the third party costs listed below. For a defended claim the solicitor and counsel costs could be more to handle the work required for replying to the Freeholder's reasons for not serving the Section 45 in time. It is worth noting that if you are successful at court then counsel will ask for a costs order and if granted this is deducted from the premium payable (in essence the freeholder pays your costs).