Subject to satisfying the criteria of a qualifying tenant under the Leasehold Reform Housing and Urban Development Act 1993 a residential tenant of a long lease has the right to obtain an extension of 90 years on the term of their lease.
However given the length of such extension this may mean that the qualifying tenant’s immediate landlord, and possibly some of the superior landlords to them are unable to grant such extended period as their own lease terms in the property are insufficient length.
For the above reason the qualifying tenant application the Act is made to competent landlord who is the landlord, which has the ability to grant a new lease of sufficient length to comply the statutory requirements.
Whilst the Section 42 notice must be served on the competent landlord there are strict requirements in relation to proposals in respect of the premium, and service on the immediate landlords.
The intermediate landlords have the right under Act to serve notice of separate representation on the qualifying tenant, which enables the intermediate landlords to take part in the hearing at the FTT in respect of valuations matters relating to their interest.
However the Court of Appeal in the case of Ketab v (1) Howard De Walden Estate Limited (2) According Limited have ruled that irrespective of the right to serve of a notice of separate representation intermediate landlords will be bound by terms agreed between the competent landlord and qualifying tenant.
This means that, should agreement be reached prior to FTT determination such agreement will bind the intermediate landlords, and also prevent the FTT having jurisdiction to determine the premium payable if the intermediate landlords are unhappy with the sums payable to them.
It is still possible in limited circumstances for intermediate landlords to have a claim against a competent landlord in relation to terms which they did not agree but the competent landlords is now in a superior position in more ways then one following the judgement.