… which means no recognition of the residents’ association, no RTM or enfranchisement. But this may STILL be an opportunity
Leaseholders at Welland Quarter in Market Harborough have discovered how unempowered they are when a freeholder goes into administration.
It means that administrators Grant Thornton cannot recognise the residents’ association, and there is a freeze on right to manage and enfranchisement.
But the good news is that the residents should be offered the freehold to purchase when the administration comes to an end.
The residents’ association at Welland Quarter, representing 69 apartments, has 85 per cent membership.
But the First Tier Tribunal has said that because the site is in administration the residents’ association cannot be recognised.
The leaseholders want to sort out a number of outstanding service charge issues resulting in a possible demand for £14,000 in overspend.
“It cannot be right that the moratorium, which should be a short-term protection allowed to the administrators, can be extended indefinitely and across any area of action,” said a resident.
“It is thwarting leaseholders from legitimate action.”
The site is managed by Qube Leasehold Management, based in London and Hertfordshire, which is an ARMA member.
The critical issue facing residents is that Qube has issued an section 20 to repair the roof.
The development is a group of five interconnected buildings, three for over-55s called Welland Place and two blocks for normal use called Welland Quarter.
Grant Thornton sold off Welland Place to the Methodist Housing Association, but there are shared services between Welland Quarter and Welland Place in terms of an underground car park and some water services.
When the leaseholders tried to plan for RTM two firms of solicitors stated that Welland Quarter does not have vertical separation down through the underground car park.
(LKP’s legal advice is that this needs further scrutiny.)
Grant Thornton have indicated a price of between £350,000-£400,000, which is what the residents also calculated.
As a result, there is no great enthusiasm among residents for buying the freehold.
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I would add a review of adminstration too as my understanding is that they are only entitled to a “brief pause” in order to assess the landlords affairs. That should not extend as a moratorium to the end of adminstration and is therfore challengeable.
When I think about it the RPTS should issue a certificate of recognition instead, as I cannot think of a reason or precedent that statutory rights to RPTS determination to access statutory rights over those contracts(leases) impacts the landlords affairs in any that affects administration.
To AM. Re your comments, I agree that it should just be a brief pause, however, after much legal advice it does not seem so.
Re the RPTS/LVT the Procedural Judge stated that he has no authority to issue the certificate without the permission of the administrators or the courts..Grant Thornton refused that permission using the moratorium.
I am still not so sure- I’d like to see the decision to see their authority.
I can see an issue with capacity and their terms of appointment in issuing a certificate as their appointment depends on statutory provisions and appointment by the court.. That should however only delay, not deny such rights, and as above the RPTS issue of a certificate applied for to them by you direct, is unaffected by the administration. It is lawfully able to issue such a certificate itself without reference to the landlord. As to RTM and RTE again its a matter of who it is applied for”against” and I only see a delay in that, not a denial.
AM, how do I contact you so I can send you the LVT’s ruling. I have taken legal advice from more than one source with same response.What is your background.
Clive
Thanks – but if you can tell me when the decision was taken and in what venue ie which FTT I can see it online. My concern is that there is no preclusion in the primary legislation and therefore their argument must exist in either precedent or other legislation, however my understanding of administration and insolvency, limited as it is, is that it cannot permanently preclude the exercise of rights in this way.
This is not unexpected from Grant Thornton. Administrators will instinctively refuse anything unless it brings in money. I have looked at this issue before in relation to RTM and it is my view a successful RTM claim could be made despite the Administration. However the issue needs to be advanced in the right court, in this case the companies court in Chancery.
Since the last post I did raise it with counsel who concur, at best it is a brief pause.