Reminder To Lawyers – Don’t Do Favours, Don’t Accept Favours.
This week a case is reported which may give one or two Solicitors and Property Managers [or all of them] a timely reminder to review their practices and procedures.
As I am a retired Solicitor, having worked for many years in Bradford, which is a friendly place by and large, this pitfall could very likely have caught me too.
It relates to the complicated world of Leasehold Enfranchisement of flats and apartments.
What has happened is that a group of leasehold owners of flats in a large building has decided to buy the freehold. This is something they can only do because Statute Law defines the right which they have, depending strictly upon how many owners [what percentage of the whole number of leaseholders] have to be involved, how long the terms of their leases are, how many years they have to have already lived in their flats and many other scenarios and conditions.
Indeed it can be a big job for a professional advisor even to work out whether in any particular case, the right to buy the Freehold can be claimed.
The point is, the Leasehold Reform Housing and Urban Development Act of 1993 is a fairly long and very complex written Law. Every word in it is there for a reason and if you qualify, fine, and if not, you don’t. There are no grey areas, The Law is the Law.
As the policeman used to say, “I don’t make the Law, you know, I just enforce it. But I’ll tell you this – If the Law says Stand on Your Head then Over You Go Sonny”
OK, Got That?
Anyway, here is a link to a very clear Guide, placed on the internet by London Lawyers Pemberton Greenish.
So as you will see, once the Leaseholders have got together and decided to buy, they value the Building and serve a formal notice of their requirement to buy, which includes their offer for the purchase price. This is a process over which they may have taken years.
On the other hand there you now are, the Landlord, owner of the building, happily receiving your rents and living on your yacht [possibly!], when suddenly you get this horrible notice.
Crikey, you need to have a bit of a think.
And yet, the Notice you have received says that you are given only two months and a day to give your clear response in the form of a written counter-notice.
You have got a lot to do, in just two months and if you are the Solicitors acting for the owner, you will know the feeling of having to chivvy on your client, and surveyors and valuers to get their acts together and then inspect their reports and all the leases and value the land and buildings and assess the “marriage value”.
It is an art, not a strict science, to value the right price to be paid. Obviously if all the leases are for 1000 years, the value of the freehold is really just the amortized rent, given the tendency for human beings to die.
But on the other hand if the leases have only a few years to run before they are going to expire, the price will be a very great deal higher.
So it is not surprising – and it is in the nature of human behaviour in the face of deadlines – that all the necessary reports arrive at the last possible moment. And the Solicitor then has to prepare the Freeholder’s notice and get it signed and get it round to the leaseholder’s solicitors within the deadline time.
And if the last day for service is a Saturday, and if you ring up the other side on Friday and they say fax it over to us, and if their fax machine turns out to be broken, and if you telephone and a friendly chap called Dave answers and says “OK just email it to us for now and post it to us for Monday”, well that’s OK isn’t.
Although many Statutes deal with the need to give and receive notices, it is odd that there has until now apparently been no definitive ruling as to what “IN WRITING” means.
Of course in the 19th and early 20th Centuries and earlier there was no doubt. Writing meant on paper – or parchment. Vellum perhaps. But in the years since, now that electronic methods, fax, email, text, WhatsApp have existed, the law has been silent.
So whilst most lawyers will have prepared and sent notices on paper, what about a case like this, where time was running out? And in the situation where there seemed to be nothing in the law that said email was impossible?
I mean, you phoned, and you spoke to Dave, and he said “it will be fine – email it now and send the paper in as fast as you can”. Just like I might have done in Bradford.
So here is the case LINK HERE
And not surprisingly, it’s bad news for this particular landlord’s Solicitors.
This is the Judge’s reasoning:-
The Paper version with a signature – the “original” counternotice – landed on Monday, too late.
But the email had arrived in time, and Dave had said he would accept it. [But who on earth was Dave? Bloke in charge of paperclip procurement and fax machine maintenance poorly executed?].
And even if he had been the senior Partner, he has no power to waive the Law. [Stand on Your Head, remember?]
And the Law? That says “notice must be served”. And by implication [since the amending Act of 2014 says notices can be signed by agents as well or instead of the actual parties] the notice must be signed.
And, says the Judge that means it must be paper. Because an email or a fax cannot transmit an actual signature into the hands of the recipient. Only a scan of a signature. So, never mind that Dave was trying to help. The Law’s the Law. [S. on Y H.]
And whilst those of you in short trousers may think this is all very Luddite and that emails should have replaced all paper years ago, I think this decision is right.
After all, how many emails do you get every day? Hundreds? More? Dubious “Banks” wanting you to “refresh your details” – yeah right – and your Garage saying your car needs a service, Amazon asking you for an unpaid review of the camera you bought last year and on and on.
The Court is saying, we don’t blame any busy solicitor for deleting the lot of them. And if it includes a legal Notice from a Freeholder, so what. He should have written.
In this case, a very expensive lesson to learn. Because the delay means that the Freeholder has lost the right to negotiate on price and has to accept the Leaseholders’ first and presumably lowest offer. In London that could mean millions lost.
See the heading, and Don’t Do Favours, and Don’t Accept Favours. There are no shortcuts.
But there is a link, here Write a Letter. Take it round by hand. Ignore Dave.
As ever, do contact me or Christopher Atkinson here at AtkinsonNotary [0113 816 0116 or firstname.lastname@example.org or www.atkinsonnotary.com ] where we shall be more than happy to assist and help you through the maze whenever you have paperwork to be processed for foreign countries.