Government fails in bid to postpone leasehold enfranchisement challenges

The government has failed in a bid to indefinitely postpone a swathe of litigation brought by companies and trusts challenging leasehold enfranchisement reforms. Annington Properties, which is owned by private equity investor Guy Hands, and John Lyon’s Charity are among a group of at least seven organisations seeking to bring a court challenge to the Leasehold and Freehold Reform Act, brought in earlier this year by the Conservative government. Among other things, the Act makes it cheaper for leaseholders to buy freeholds. Although it has received Royal Assent, the act needs secondary legislation before it becomes effective. Even so, lawyers for Annington have concerns. Annington is the leaseholder of thousands of military homes. It bought a 999-year lease to the Ministry of Defence’s married quarters estate in Bristol and Cranwell in Lincolnshire for £1.7bn in 1996 and rented it back to the MoD. According to a statute, lawyers for Annington have advised the company that, while most of Annington’s leases are out of the scope of the Act, there are some drafting errors that could lead to the MoD reducing the compensation it pays if it is allowed to buy the estate back. Meanwhile, John Lyon’s Charity has argued that the Act would jeopardise the work of charities which rely on property as a source of funding. They, and a group of other companies, have taken legal action before the secondary legislation has been put in place to ensure their cases are not time-barred. However, at a hearing earlier this month, lawyers for the government asked a High Court judge to stay or postpone some of the claims while the government drafts the secondary legislation. In a ruling handed down today, the judge, Mr Justice Chamberlain, refused. He said in his ruling that the government had stated that it intended to go ahead with the secondary legislation but had not said when. “If the stay were granted it would likely delay the resolution of the challenges for a considerable time,” he said. He ruled that the cases should be allowed to proceed to the next stage. A judge will rule on whether the cases are arguable in the new year. The organisations bringing claims are: Abacus Land 1, the Portal Trust; Annington Property, John Lyons Charity, ARC Time Freehold Income Authorised Fund, Wallace Partnership Group and Cardigan Group. Annington has also filed a parallel case at the European Court of Human Rights in Strasbourg. Abacus Land 1 (Holdco 1) Ltd and others v Secretary of State for Housing, Communities and Local GovernmentAdministrative Court (Chamberlain J) 30 Oct 2024