A recent case established an important point in relation to the rights granted to lessees when they enfranchise a building under the Leasehold Reform Housing and Urban Development Act 1993 (the Act).
Right of access
The lessees of flats in a building had, under the terms of those leases, a right of access to a garden square which faced the building. As in many cases, that right was subject to revocation in writing by the freeholder, in this case, a royal charter company which was a registered charity. On an enfranchisement, lessees are not only entitled to acquire the freehold of the building, but also the freehold of any property over which they are entitled to exercise rights under the terms of their leases in common with occupiers of other property. This provision would enable the lessees to acquire the freehold of the garden square. However, under section 1 (4) of the act, a freeholder may retain ownership of the freehold of the property over which the rights are exercised, provided that he grants to the lessees permanent rights as near as may be to those under the terms of the leases.
In the case of The Corporation of Trinity House v 4-6 Trinity Church Square Freehold Ltd, the freeholder offered the same rights as existed in the leases, that is the right to use the garden square subject to revocation. The Court of Appeal held that this was not sufficient and that the rights should be permanent rights without the ability of the freeholder to revoke them at some point in the future. By the enfranchisement process therefore, the lessees acquired a permanent right incapable of revocation.
This is an important decision for buildings built around garden squares, of which there are a number in Kensington, and also for those which have rights over other gardens or property which are subject to notice by the freeholder.