Buying the Freehold – Who Gets to Keep the Communal Garden?

On collectively purchasing the freehold to a building, the group of leaseholders will need to carefully consider which other areas to include in the claim, such as a communal garden. However in some circumstances, the freeholder will be able to retain ownership of a garden area and grant permanent rights of use instead.

The law gives the freeholder the option to do this provided that the rights offered are:

1. permanent in nature; and
2. equivalent to what is currently enjoyed, such as the right under the lease to use a garden for recreational purposes.

A recent case (4-6 Trinity Church Square Freehold Ltd v The Corporation of the Trinity House of Deptford Strong [2016]) examined the position whereby the leaseholders had a right to use a communal garden under a revocable licence granted by the leases. The issue was whether the leaseholders’ right to use the garden would continue to be revocable or would become irrevocable when the freehold to the building was acquired.

If an equivalent right to use the garden (a revocable right) was granted on completion, this would not be permanent. In dealing with this inconsistency, the Upper Tribunal decided that for the leaseholders’ rights to become permanent, they must be irrevocable. The freeholder therefore lost its right to terminate the licence to use the garden area when the freehold to the building was acquired.

There are a number of lessons that can be learned from this case from both the perspective of the leaseholders and freeholder. If you have any questions, would like formal advice or wish to set up a meeting with us then please contact:

Ricky Coleman – Solicitor in the Property Litigation Team at Dean Wilson LLP

01273 249251 rfc@deanwilson.co.uk