Leasehold Enfranchisement Update – Barrie House

Merie Bin Mahfouz Company (UK) Ltd v Barrie House (Freehold) Ltd [2014] UKUT 390 (LC)

The freeholder could not have a leaseback of “units” which were at the date of the initial notice common parts.

Facts

The freeholder, after service of the s. 13 notice, constructed a new flat in an area which had previously been used as the porter’s common room, maids’ rooms and communal WCs. The counter notice claimed a leaseback of the new flat.

Issues

 The main issue was whether the freeholder could claim a leaseback of a unit which did not exist at the date of the initial notice.

Decision on Appeal

The Upper Tribunal decided the freeholder could not claim a leaseback as the unit didn’t exist at the relevant date and because the freeholder could not claim a leaseback of common parts. For the same reasons an office in a communal area of the basement could not be the subject of a leaseback. The freeholder could, however, have a leaseback of an area containing telecoms equipment.