As a Shareholder of a residential Freehold do I have the right to serve notice on an Adjoining Owner without the other Shareholders of the Freehold being involved?       

In Part 1 of this blog, Icon Surveyors will first consider what are the tenures of home ownership within the jurisdiction of England and Wales. And later in Part 2, we will discuss what a shareholder of a residential freehold is and whether or not and in what circumstances a Freeholder may or may not have to inform and/or involve any other Freeholders before serving a Party Wall Notice on an adjoining owner.

The short answer to the question is; provided there are no prohibitive clauses within the Deeds of the Freehold/ Leasehold property to which the building owner intends to carry out notifiable works as prescribed by the Party Wall etc. Act 1996, the Leaseholder with a shareholding interest in the Freehold does have the right to serve a Party Wall Notice on any adjoining owner without the consent and /or knowledge of any other Freeholder. If however, there are prohibitive clauses within the above-stated Deed(s) the Leasehold shareholder of the Freehold will be legally required to involve all other holders of an interest in the Freehold.

3 Types of Homeownership Within the Jurisdiction of England

  • Freehold,
  • Leasehold and
  • Commonhold

1) A Freehold tenure, (how the land is held by the owner) means that the ownership is absolute and the owner of the property is “free from hold” of any entity. A Freehold owner owns the building, the land it sits on and the airspace above it. It should be noted that the land and airspace are also saleable assets in their own right. The actual depth of the ownership of the ground below is less than 8.7 miles, though has yet to be legally determined, whereas the airspace above is anywhere between 500-1000 feet above the roof of the property.

2) Leaseholders of flats that own a part of the freehold of the building are known as leasehold or collective enfranchisements. In law, an enfranchisement is; “a method for acquiring a freehold or an extended lease of a leasehold house. A tenant has a statutory right of enfranchisement when he has a long lease (exceeding 21 years).”  Please note that the above-stated statutory rights are provided by the Commonhold and Leasehold Reform Act 2002, and thus, only apply to tenancies in England and Wales.

Such tenures must be set up by way of a management company with all of the other leaseholders. The company will buy the freehold and distribute the company shares amongst the leaseholders. The management company then determines what the term and extension of each of the leaseholds is to be and what repairs and maintenance works can be carried out including the costs for such works.

3) Commonhold is a relatively new concept that was introduced by the above-stated Act. It is a form of ownership that is used for multi-occupancy developments. Thus, each unit holder owns the freehold of their home and a Commonhold/residents association is set up in order to manage the common parts of the building. This means that each unit holder is responsible for the repairs and maintenance of their unit; collectively, the unit holders are responsible for the common parts of the building and the land upon which it sits.   

Leasehold tenures are agreements between the Freehold landlord and purchaser of the leasehold. Such agreements are for a specified term after which time the property reverts back to the Freeholder. These types of tenure usually incorporate restrictive covenants relating to any alteration of the structural fabric, repairs and/or maintenance of a building and common parts. 

However, most leasehold, leasehold enfranchisements and/or commonhold agreements in England and Wales incorporate clauses prohibiting certain works being carried out by a building owner without the prior written consent of the Freeholder. This can pose problems not only for a freehold owner that owns an entire block of flats to which leasehold agreements have been granted, but to a block of flats where all of the occupiers are in fact equal shareholders of the Freehold of the building or, are the freehold owners of a unit (commercial or residential). Please see Part 2 of this blog for further information.  Icon Surveyors are happy to provide free party wall advice to any building or adjoining owners who may be affected by the subject matter raised in this blog.

Icon Surveyors

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