The case of the missing landlord - How Vesting Orders can assist

If you are a leaseholder, you will typically be familiar with your landlord. They are the individual or company who normally has responsibility for maintaining the structure of the building, deals with the repair and maintenance of common areas, and collects service charges.

But what happens if your landlord goes missing?

Some may think “Great! No more demands for service charges or ground rents”. Suddenly your annual expenses have been reduced. Whilst this may seem like a positive situation, the absence of the landlord will soon present problems and issues

These issues can often include:-

1. Who is now responsible for maintenance and repair of certain parts of the property?
2. What do you do if the leaseholders cannot agree on the costs of repairs to be undertaken?
3. What do you do if your lease needs to be extended?

These can quickly become major headaches. How do you address this?

Maintenance and repairs

Often it is the responsibility of the landlord to maintain the structure of the property, and any communal areas. These are ordinarily funded via service charges paid by the leaseholders.

But if the landlord has gone missing and the property falls into disrepair, leaseholders are going to start asking, who is responsible here and how do we resolve this in a practical sense?

One option is for the leaseholders to form a Right to Manage company. This provides the company with the ability to repair and maintain the structure or communal areas and to establish reserve funds to do so. The company can also appoint a managing agent to help manage these tasks if needed.

But what if the leaseholders cannot agree on forming a Right to Manage company? It is not uncommon for leaseholders to be unable to reach majority agreements. The way around this is to apply for a property manager to be appointed. This is an application made to the First Tier Tribunal (“the FTT”).

If successful, the FTT will appoint a qualified property manager who will report to the FTT. The manager will be able to organise any necessary repair and maintenance works and collect the appropriate service charges to ensure that works are carried out.

Lease extensions

Where the landlord is missing or absent, you are going to have a problem trying to extend your lease. This is because the first step in the statutory process involves serving a notice on the landlord. How can you serve a notice on a legal entity that has gone missing? The simple answer is you can’t.

The same problem arises where leaseholders want to purchase the freehold of a property through the process known as leasehold enfranchisement. One of the first steps in this process is to serve an initial notice on the freehold landlord. But if the landlord has disappeared, how do you get around this?

This is where it becomes necessary to consider applying for a Vesting Order.

Vesting Orders – how can they assist?

A Vesting Order is a Court Order. It is an Order that the Court can grant where a landlord is absent, or has failed to respond to the notices served upon them. A Vesting Order allows the Court to step into the shoes of the landlord in order to facilitate the process the landlord is refusing or unable to participate in. A Vesting Order allows, for example, the Court to grant lease extensions or to allow leaseholders to purchase the freehold through enfranchisement where a landlord is missing/absent.

In the long term, a leaseholder with a missing landlord will ideally want to look at obtaining the freehold, though this will come at a premium. This will allow leaseholders to have full control over the freehold and prevent future problems.

There are slight differences where your landlord is refusing to engage, rather than being missing entirely. But if your landlord is absent, then there are options that can be explored to ensure you are not left in the lurch.

Consulting with a legal specialist is essential if you are trying to navigate a missing or absent landlord and considering the various options available to you and which may be the most appropriate for your circumstances. If you have any queries in relation to missing landlords, the Property Disputes Team at Hughes Paddison can assist. Please contact Jo Lingard on 01242 586 357 or at jli@hughes-paddison.co.uk.