Avon Freeholds Limited v Cresta Court E RTM Company Ltd
[2024] UKUT 335 (LC)
Avon Ground Rents Limited v Canary Gateway (Block A) RTM Company Ltd
30 May 2023
[2023] EWCA Civ 616
Court of Appeal
The question was whether a shared ownership flat lease longer than 21 years is a 'long lease' allowing the tenants to manage the building, even if they don't own the whole flat. The court said yes, because the law clearly says a lease longer than 21 years is a 'long lease', regardless of how much of the flat the tenant owns.
Key Facts
- •Avon Ground Rents Limited (Avon) appeals a decision that shared ownership leases exceeding 21 years are "long leases" under the Commonhold and Leasehold Reform Act 2002 (2002 Act), regardless of the tenant's share percentage.
- •The case concerns Block A of Canary Gateway, where shared ownership tenants have leases exceeding 21 years, some with 100% shares, others with less.
- •Canary Gateway (Block A) RTM Company Ltd (the Company) sought the right to manage Block A under the 2002 Act.
- •Avon argued that tenants with less than 100% shares were not "qualifying tenants", requiring notice to Metropolitan Housing Trust Limited (Metropolitan), the head lessee.
Legal Principles
Definition of "long lease" under section 76 of the 2002 Act.
Commonhold and Leasehold Reform Act 2002
Interpretation of the 2002 Act in light of the consultation paper and the Leasehold Reform, Housing and Urban Development Act 1993.
Commonhold and Leasehold Reform, Draft Bill and Consultation Paper (Cm 4843); Leasehold Reform, Housing and Urban Development Act 1993
The meaning of "qualifying tenant" under the 2002 Act, and the requirements for notice of invitation to participate.
Commonhold and Leasehold Reform Act 2002
Outcomes
The appeal was dismissed.
A shared ownership lease granted for a term exceeding 21 years is a "long lease" under section 76(2)(a) of the 2002 Act, regardless of whether the tenant's share is 100%. The court interpreted the subsections of section 76 as providing alternative gateways to qualify as a long lease, not restrictive sieves. The court also rejected Avon's argument that the consultation paper and previous case law dictated a different outcome.
Similar Cases
S Franses Limited & Anor v Block 6 Ashley Gardens Roof Gardens Limited & Ors
[2023] EWHC 2880 (Ch)
Aviva Investors Ground Rent GP Ltd and another v Williams and others
[2023] UKSC 6
Howe Properties (NE) Limited v Accent Housing Limited
[2024] EWCA Civ 297
Avon Grounds Rents Limited v Kirstie Ward
[2023] UKUT 88 (LC)