Freeholders can take many forms; they can be individuals, different types of companies such as finance companies, mixed use companies (owning both commercial and residential properties in the same development) and ground rent investors. There can also be leasehold resident management companies which are often marketed as ‘share of the freehold’.
Leaseholders are entitled to know the identity of their landlord. A request in writing can be made to the following:
- The person who demands rent;
- The person who last received rent;
- The person who acts as the landlord’s agent.
The person receiving the request must supply the leaseholder with a written statement of the landlord’s name and address within the period of 21 days, beginning with the day on which they receive the request. This also applies if the landlord is a company in which case leaseholders can also request the name of every Director and the Company Secretary.
A block of flats can also have more than one freeholder if the freeholder who owns the ‘superior’ lease sells what is known as an ‘intermediate’ lease to another party. That party becomes the ‘head lessor’ who can then grant ‘under leases’ to the leaseholders of each flat, making the head lessor their landlord.
This then results in 3 different levels of ownership in the building:
- The freeholder who has the highest level of overall ownership;
- The head lessor (also called the head lessee) who is directly responsible to the leaseholders;
- The leaseholder.
Some freeholders self-manage their blocks but most use the services of a managing agent.
Note: Freeholders are also known as landlords in common law but this is not to be confused by a landlord subletting a property.
LEASE BREACHES AND FORFEITURE
The greatest power freeholders have over leaseholders is the use of forfeiture (taking away the lease and the property) when leaseholders have breached their covenants.
A breach can take a number of forms in that it can be:
This means that a party simply does not honour his obligation.
Where the party in breach announces his intention not to be bound (repudiation, or anticipatory breach).
If a breach is by disablement it means one party has acted in such a way as to make performance impossible.
If a breach is anticipatory, the injured party may seek legal remedies immediately, even if there was originally a time limit on the contract. Moreover, if one party repudiates, the other may demand performance and continue to fulfil his own obligations. He does not have to treat the contract as discharged in fact he may not be able to).
If landlords fail to meet their obligations then leaseholders can take civil action in the County Court, claiming compensation for damage and inconvenience resulting from the breach. If a payment of compensation is not a sufficient remedy, then s17 of the Landlord and Tenant Act 1985 (specific performance of landlord’s repair obligations) means that the County Court can make an injunction requiring the landlord to fulfill the express or implied repairing terms of the tenancy agreement. If the landlord again fails to carry out the works required by the court order, the landlord, (or his agent), can in very extreme situations be committed to prison for contempt. The County Court can alternatively direct that the repairs be undertaken by, or on behalf of, the tenant at the landlord’s expense.
Damages (compensation) can still be claimed even if the works have been carried out by the time the case reaches court.
Note: It has been held that breach of the repairing covenants can also be considered to be breach of the covenant of quiet enjoyment.