It is common for development leases to be granted in respect of elements of a block of flats such as the roof with its airspace. There are a number of issues that arise around this. Developers acquiring such interests will want to know they can undertake the development. Flat owners will want to check whether the right of first refusal is engaged with potential take-over rights and absent that whether they can acquire the lease via collective freehold enfranchisement.
A recent Upper Tribunal decision has clarified whether these interests can be acquired via collective freehold enfranchisement by the participating flat owners despite the developable land having been leased off.
The enfranchisement legislation enables participating flat owners via their nominee to acquire certain leasehold interests as well as the freehold interest in the relevant building. In this regard they have to acquire any leasehold interests that sit between the freehold and the flat held by a qualifying tenant. They also have a discretion to acquire leasehold interests that comprise common parts the acquisition of which is reasonably necessary for the proper management or maintenance of the building. They may be put off from acquiring such an interest due to the development value that attaches to it.
Source – Winkworth Sherwood.