Q: You will already have the standard lease used for this development and I now attach one of the lease plans (currently attached to all of the leases) which shows the communal areas & parking arrangements.
The landlord has recently contacted selected leaseholders to ask whether they would be interested in buying the landlord’s parking space.
This causes much concern as there are no visitor parking spaces or any scope to park outside the designated spaces without potentially blocking access. Planning approvals specify that these spaces shall be kept available at all times. It could therefore become impossible for any contractors such as gardeners, window cleaners etc (many of whom are likely to have heavy equipment and be on site for extended periods) to legitimately park on site. Parking at the front of the building is prohibited.
I would be very grateful if you could answer the following questions:
1. Is the landlord permitted to sell off this space? Since it has not already been demised to a specific dwelling wouldn’t this space count as part of the communal space? If so can he simply sell off parts of the communal space at will? We note that clause 11.1 c of the lease highlights that the areas hatched orange & green & blue & brown are not designated as communal. This “landlord’s parking space has not been hatched.
2. If the landlord is permitted to sell this space at will, would this be restricted to an existing leaseholder by altering their demise? Would they need to surrender their existing lease to effect this alteration to their demise or would there be another mechanism?
3. Could he sell to anyone regardless of whether they actually live at the block? If so, we are concerned about the terms for their use of that space i.e. their covenants, particularly as our service charge will include contributions to the maintenance of the access roads. Would we have any rights to assert in this regard?
There are numerous considerations/limbs to your enquiry. In no particular order:
1. Clause 11.1 deals with the common parts definition. It reads:
those parts of the building or the estate which tenants of more than one part of the estate can use (“the common parts”)
…. the areas hatched in orange and green and blue and brown on Plan 2 are not communal areas
I have not seen any plan but, it appears the parking space in question is not hatched in orange, green, blue or brown on Plan 2.
That said, you will see I have highlighted the part of the clause referring to can use. In brief, in order to show the leaseholders can use the parking spaces, they would need to show they have a right to do so. I deal with this below, under number 2.
2. The rights are set out in clause 14. Those are the rights granted and the rights reserved. I cannot see there any particular right to use the parking space referred to.
If any rights could be shown, the selling of the interest could amount to a derogation from grant. This, in principle, could give rise to an ability for those leaseholders to bring action, either by asking a court for the position to remedied or for compensation.
3. On any transfer of the leases, if it cannot be shown in the leases that the rights have been expressly granted, they could be implied under section 62 of the Law of Property Act 1925.
This is a complex area of law and would need to be analysed in some detail by a lawyer specialising in this field. A picture would need to be painted analysing the dates in which the relevant leasehold interests were sold, and patterns of behaviour showing that the flat leaseholders had benefited from those rights over periods of time.
As above, if any rights could be shown, the selling of the interest could amount to a derogation from grant. This, in principle, could give rise to an ability for those leaseholders to bring action, either by asking a court for the position to remedied or for compensation.
4. Any amendment to a leaseholder’s demise would amount to a deemed surrender and re-grant of their existing lease. By way of mechanics, subject to the other points I make here, the landlord could merely grant a separate lease of the parking space to one of the leaseholders. Anyone acting for the leaseholder proposing to purchase would need to very carefully analyse the rights other leaseholders had over the area as they would either take subject to those rights or could entertain litigation relating to a derogation from grant, as discussed above.
5. There is a possibility that this may attract right of first refusal to the tenants as a whole. I can look at this in further detail if needs be. If this is correct, each leaseholder would need to be served a s.5 Notice in accordance with the 1987 Act, and a requisite majority of leaseholders could (collectively) accept, in accordance with s.6. Significantly, this would need to be collectively, not individually. If it were not accepted, subject to the points I make above and below, the landlord would then be free to sell on the open market.
6. I am not a planning expert and thus cannot comment on the planning element, whether the potential conduct would infringe on the conditions and, if so, what could be done about it.
[Submitted September 2018]