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It is becoming increasingly common for Ls to construct new flats on the roofs
of existing blocks of flats. But, it should be appreciated that the disposal of
the airspace will be a disposal of an ‘appurtenance’, and that in turn means
that the Ts may potentially be able to block the development by exercising
their right under LTA 1987.
Under LTA 1987, Ts of residential flats have a right of first refusal (provided
the building contains two or more flats, with the number of flats held by
qualifying Ts exceeding 50% of the total number; although the Act does not
apply to commercial premises, it does apply to mixed-use premises where the
commercial element is less than 50% of the floor area).
The key point of the Act is that L has to serve an offer notice on the qualifying
Ts as soon as he proposes to make a relevant disposal to a third party. Those
qualifying Ts then have the right to accept the offer notice and buy the premises
on the same terms. If L fails to serve that notice, then the qualifying Ts have rights
directly against the third party (including the right to buy the property on the
same terms). In a recent case, a block of flats contained 72 flats on four floors, all
of which were let on residential leases. L granted a lease of the roof, the air space
above the building and other parts of the premises to an associated developer;
the intention was to allow the developer to build a fifth floor in the roof space,
but no notice was served on the Ts under LTA 1987. Clearly, if L had disposed of
the whole of the building then the Act would have applied. But, what was the
situation when L disposed of only part of the building (and that did not include
any flats)? The 1987 Act only applies to premises consisting of ‘the whole or
part of a building ’, so it all depends what is meant by the ‘building’. The answer
is that it extends to ‘appurtenances ’. The court held that the roof space and air
‘affected ’ the flats in the rest of the block, even though none of those flats was
sold off. In practical terms, the roof was appurtenant since it formed part of the
main building; accordingly, LTA 1987 applied and L was not entitled to grant the
lease to the developer.
This case suggests that it may be surprisingly difficult for L to sell off parts of
a building, or the air space above, without having to use the Act. In practical
terms, if any air space is to be regarded as part of the building, then that
will be sufficient to prevent any roof-space development from proceeding.
Dartmouth Court v Berisworth [2008] EWHC 350 .© Practical Lawyer
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