Time for government to end forfeiture windfalls to landlords
This story has since been taken up by The Times journalist Andrew Ellson and reported on MailOnline, The Sun and The Mirror:
A leaseholder has had a £600,000 flat confiscated by his freeholder after “redecorating” it in what campaigners say is the most extreme case of forfeiture they have seen. Charles McCadden’s case has prompted calls for reform of a law that ultimately allows freeholders to take ownership of a
Charles McCadden has been left ‘feeling suicidal’ after home was confiscated Freeholder Afshan Malik seized property when Mr McCadden breached lease Mr McCadden, who has chronic illness, says legal battle has left him ‘anxious’ Have you had your property seized? Email email@example.com A leaseholder has been left with nothing after his £600,00 flat was seized in a ‘redecorating’ dispute.
A HOMEOWNER has been left ‘suicidal’ after his £600,000 flat was confiscated from him because he redecorated. Charles McCadden purchased the property in 2016 on a leasehold basis but didn’t seek permission with the freeholder before having a new kitchen and bathroom installed.
A man has been left “suicidal” and with no home after his £600,000 London flat was seized when he redecorated. Charles McCadden bought the upper-floor flat of a two-storey Victorian terrace on Burrows Road, Kensal Green, Brent, in 2016 using inheritance money.
A leaseholder in North West London has had his £600,000 maisonette forfeited by his freeholder neighbour.
The property of Charles McCadden, 43, was bought for cash with no mortgage following the sale of two flats on the south coast.
As things stand, he has lost the lot.
Forfeiture was granted on August 6 with possession on August 22.
This is the single worst case of forfeiture that LKP has encountered and it reveals the unfairness of enormous windfalls received by freeholders following a forfeiture decision.
Forfeiture was recommended for reform by the Law Commission in 2006 but nothing has happened.
LKP urges the Law Commission to include its earlier report in its proposals to reform leasehold which are presently being considered.
Mr McCadden was taken to the property tribunal by his downstairs neighbour Dr Asfan Malik, a PhD medical researcher, for breach of covenant having fitted out a new bathroom and undertaken other works without consent.
The tribunal held a hearing last year, which Mr McCadden did not attend, and ruled in November that he had repeatedly failed to allow access to his flat so that the freeholder could inspect it.
He had also “carried out unauthorised structural alterations and removed landlord’s fixtures without consent”.
The tribunal also ruled that Mr McCadden “has caused nuisance to the occupants of the ground floor flat”.
The tribunal added: “These are serious breaches and the next step will be for the applicant to apply to the County Court to forfeit the lease. The Respondent [Mr McCadden] is advised to seek legal advice at the earliest opportunity.”
Mr McCadden, who bought the flat for £518,250 cash in April 2016, tells LKP that he contacted two solicitors, but was dissatisfied with the advice that he received.
He had not attended the hearing as he was looking after his ailing father in Scotland; Mr McCadden also has a long-term medical condition. He says he did not receive the notification of the forfeiture hearing.
LKP has spoken to one of the solicitors involved to understand how matters could have unravelled to the degree that Mr McCadden had the lease of his flat forfeited and a possession order granted to his neighbour.
The tribunal ruling said: “The tribunal is satisfied that the Respondent [Mr McCadden] has taken an informed decision not to engage with these proceedings.”
Dr Malik, who was represented by a property manager, told the tribunal that she had had an “excellent relationship with the two previous upstairs tenants”.
The tribunal made a site inspection but could not gain access to Mr McCadden’s maisonette. But it was satisfied that “a new bathroom, kitchen and central heating have been installed”.
Holes had been made in external walls and a new flue cut near a plastic gutter, and there were “redundant flue holes from the old boiler”.
Floorboards, toilet and radiators – “landlord’s fixtures” – had also been removed.
Mr McCadden had also rendered the front wall. The tribunal said: “This wall is not part of his demise. He had no right to do this.”
The works caused cracks in the downstairs flat and dust. Building waste was left in the front garden” “The rubble has included a toilet,” said the tribunal.
“The works have been executed without any regard to the impact on the ground floor flat.”
For eight years, Dr Malik had an “informal arrangement with her tenants and bills were split equally as they were paid”. After Mr McCadden’s arrival, a property manager was appointed.
The tribunal ordered that Mr McCadden pay his share of service charges.
In most forfeiture cases the mortgage lender steps in and pays the debt to protect its loan on the property – which would otherwise also be lost in forfeiture.
LKP is aware of overseas investors who have lost their properties as a result of forfeiture, where no loan was attached to the property.
But the loss of a £600,000 asset is a loss out of proportion to the dispute at hand.
Mr McCadden has been found to be a most inconsiderate neighbour and a leaseholder with no understanding at all of his obligations under the lease.
The sensible course would have been to reverse the works or settle up with Dr Malik for having carried them out wrongfully.
It may even be argued that Mr McCadden deserved to have his flat compulsorily repossessed owing to his conduct.
What is not just is that a relatively minor dispute has resulted in Mr McCadden losing his entire asset worth around £600,000 to his neighbour.
LKP has urged Mr McCadden to employ an established landlord and tenant solicitor.
But it is by no means obvious what can be retrieved of this situation, if anything.
We estimate that around 60-70 forfeitures take place every year.
It is worth noting that leaseholders are treated considerably more severely in forfeiture cases than fraudsters in the criminal courts.
In Regina v Waya the criminal courts were scrupulous in returning the seed capital to a convicted mortgage fraudster.
The full ruling and forfeiture are here: