So, your landlord seems to have disappeared, and you've tried reaching out through various channels without success. Don't worry, as a leaseholder in the UK, you have rights and your landlord (also called the freeholder) has responsibilities under the law.
This article is here to help guide you through what to do when faced with an absent freeholder or landlord. It explains your rights and responsibilities, offers practical advice on handling common issues, and outlines the legal options available.
Table of Contents
- What does it mean if a landlord is absent?
- Common problems due to an absent landlord
- How to find an absent freeholder
- How can I see if a company still exists if they're my landlord?
- How do you prove a freeholder is absent?
- Extending a lease with an absent landlord
- Buying the freehold with an absent landlord
- Setting up a Right to Manage Company
- What happens if an absent freeholder reappears?
- How can Lawhive help?
What does it mean if a landlord is absent?
A landlord or freeholder is considered absent when they can't or aren't fulfilling their obligations. More specifically, if a landlord is absent, a leaseholder may not be able to make contact to extend their lease, buy the freehold, or claim the right to manage.
This could be because the freehold is owned by a dissolved company or an individual who may have forgotten about their ownership, especially if they own lots of properties.
Common problems due to an absent landlord
Various problems can arise if a landlord is absent including problems with:
Selling and remortgaging;
Extending a lease;
Property management, repairs, and maintenance;
Resolving disputes between leaseholders;
Insuring the property.
There are various reasons why a landlord might be considered absent. The legal solutions vary based on whether the landlord is or was a company or person.
How to find an absent freeholder
It's important to determine if the freeholder is genuinely absent. This could involve searching the electoral roll or hiring agents to locate them.
If the freehold is owned by someone who is bankrupt or a company in liquidation or administration, you can serve a notice on the trustee in bankruptcy or the administrator of the company.
If the freeholder has died, the executors or administrators will handle the request.
In cases of complete intestacy or if the freehold was held by a dissolved company, you can ask the Government Legal Department for advice.
How can I see if a company still exists if they're my landlord?
If a company is your landlord and you're unsure whether that company is still active, you can search the Companies House website to confirm the company's current status.
If the company is still active, there's a chance you can serve documents at its registered office and use this attempt to serve documents as proof of your efforts in a legal dispute if you don't get a response from them.
How do you prove a freeholder is absent?
You can go about proving a landlord is absent by:
Posting two ads in the local newspaper seeking information about the freeholder.
Hiring a search agent to help locate the freeholder.
Personally visiting the last known address of the freeholder.
Checking probate records for any relevant information.
It's important to keep any evidence of your efforts to prove a freeholder's absence as you will need to show them to the court if needed.
Extending a lease with an absent landlord
Leaseholders of long leases have a statutory right to extend the terms of their lease, provided they meet certain criteria.
An extension can be informally agreed with the freeholder (though not possible if the freeholder is absent) or more formally under the Leasehold Reform Housing and Urban Development Act 1993. However, to start the formal lease extension process, the freeholder must be served with a Section 42 notice.
If the freeholder is missing and it is not possible to serve the notice, leaseholders have to apply to the court to get a vesting order.
A vesting order grants ownership of the land or interest to the leaseholder in a way decided by the court. Alternatively, the court may release or deal with any contingent rights according to its judgment.
Buying the freehold with an absent landlord
To purchase the freehold, 50% of the long leasehold owners must act together and serve a Section 13 Notice on the freeholder.
When the freeholder is absent, this involves applying to the Court. The Leasehold Valuation Tribunal will determine the value if the Court is satisfied that the freeholder cannot be found and grant a vesting order if the landlord's absence is proved.
Setting up a Right to Manage Company
If the absence of a freeholder sees a leasehold property falling into disrepair due to lack of property maintenance, leaseholders can establish a Right to Manage Company.
A Right to Manage Company empowers leaseholders to take control of the management of the building, including enforcing covenants, setting up reserve funds, and taking responsibility for the maintenance of communal areas.
Alternatively, they can appoint a managing agent to handle these responsibilities.
Selling a property with an absent freeholder
When selling a leasehold with an absentee freeholder, you may face difficulties. For example, a buyers' mortgage lender may be reluctant to agree, even with the appropriate absent landlord indemnity policy in place. This could affect the sale price of a property or make it difficult to sell.
Buying a property with an absentee freeholder
Buyers who need a mortgage may face issues in purchasing property with an absent freeholder as many mortgage lenders may not like the situation.
While it's possible to convince the lender to go ahead with indemnity insurance, especially for short leases, it's wise to proceed with caution.
You may wish to ask the seller of the property to address or at least start the lease extension process, which can then be assigned to the buyer.
What is absent landlord insurance?
If you're buying a property with a mortgage and the freeholder is absent, mortgage lenders may insist on an Absent Landlord Indemnity Policy.
This insurance protects you if the absent freeholder or their successor reappears and demands payments for any unpaid obligations from your lease, like ground rent.
What happens if an absent freeholder reappears?
Freeholders can and do resurface after periods of apparent absence. If they do, they can demand payment for any outstanding charges in the lease terms. Ground rent, for example, can be reclaimed for up to 6 years, but the freeholder must tell you before doing this.
It's important to know your rights and responsibilities under a lease to prepare for risks like this.
How can Lawhive help?
If you're facing challenges with an absent freeholder and need guidance on your rights and potential legal actions, we're here to help you. Our legal assessment team can offer you a fixed-fee quote for the services of experienced property solicitors within our network.
These expert solicitors can provide you with tailored advice and support, helping you navigate through the complexities of your situation. Whether you're looking to extend your lease or buy the freehold, our team is dedicated to offering you the assistance you need quickly and affordably.
Reach out to us today to discuss your options and take the next steps toward resolving your property concerns.