Terms of Charitable Housing Trusts – Lease Extensions
Solicitors, Manchester, London, UK Wide Lawyers, Leasehold Flat or Apartments.
Having a charitable housing trust as your landlord is a commonly cited exception that prevents a tenant from being able to statutorily extend their lease.
But do tenants in charitable trust housing have more right to an extension than they think?
Often charitable housing trusts will correctly cite the Leasehold Reform, Housing and Urban Development Act 1993 – specifically section 5(2)(b) as the exclusion that prevents them having to grant a statutory extension to their tenants. The legislation states that a qualifying tenant with a ‘long lease’ (21+ year term) will become effectively exempt for a statutory extension where their immediate landlord under the lease is a charitable housing trust.
Most tenants when they hear this will understandably decline to object to what appears to be an ironclad exclusion.
However, what most tenants fail to notice and tellingly what most charitable housing trusts will fail to mention, is that the exclusion will only apply if the flat in question forms part of the housing accommodation provided by the trust that is “in pursuit of its charitable purposes”.
‘In pursuit of its charitable purposes’ is the crucial element to explore, as was seen in Brick Farm Management Ltd v Richmond Housing Partnership Ltd . The court here considered the foundational conflict between long leases and a housing trust’s charitable purposes.
A charitable housing trust’s purpose is to offer widely available accommodation to those in need; in essence to help as many people as possible. By definition, a long lease means that only a single tenant or group of tenants will be living in the property – thereby removing a flat from the stock of accommodation that a trust could instead provide to persons in need of housing.
This is particularly relevant for tenants where their landlord/freeholder that granted them their initial long lease may be replaced by a charitable housing trust in the future. As was considered in Brick Farm, since this freeholder replacement would in most instances happen without the consent of the tenants, it would be bizarrely unfair for tenants to have their rights taken away based on their landlord changing without their consent, or even without them knowing.
Ultimately, it is very difficult for a charitable trust to prove that a long lease, be it granted or inherited from the previous landlord, is charitable. In this sense, one could debate that the legislation is effectively defunct – discussing a scenario that seemingly can never occur; “a charitable long lease”.
The key always, as with any legal principle, is to always read the appropriate statute in full before deciding what rights you have.
To discuss any aspect of the freehold purchase & lease extension process or a consideration of the ‘house or flat’ question considered above, feel free to contact ours specialist lease extension and freehold purchase solicitor in Manchester on 0161 820 8888 or solicitor in London on 0208 889 8888 and speak to one of our experienced members in the Leasehold Team.
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