Philip Rainey QC and Carl Fain successful in important Collective Enfranchisement case

13th March 2020

Philip Rainey QC and Carl Fain acted for the successful Respondent in LM Homes Ltd & Oths v Queen Court Freehold Company Ltd [2020] EWCA Civ 371. This was a second appeal from the Upper Tribunal decision of the Deputy President.

The case concerns the entitlement to a nominee purchaser to acquire a lease of airspace, a lease of subsoil and a lease of a boiler room pursuant to s.2(3) of the Leasehold Reform, Housing and Urban Development Act 1993.

The Court of Appeal (Lewison LJ, Lindblom LJ and Leggatt LJ) upheld the Upper Tribunal’s decision and in particular held:

  1. The boiler room was a common part notwithstanding that the boiler and other installations were not demised;
  2. The airspace was a common part;
  3. The subsoil was part of the building and hence a common part;
  4. It was a functional test as to whether it was reasonably necessary to acquire those leases for the purpose of management and maintenance of those common parts;
  5. Where there were development rights which would mean that the common parts would after development no longer be common parts, it was reasonably necessary to acquire those leases to prevent the development and hence loss of those common parts, notwithstanding the reservations in favour of the landlord.

This case is likely to have a significant impact on the practice of freeholders who seek to preserve development value grant leases of airspace to associated companies prior to a collective enfranchisement.

A copy of the judgment can be found here.



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