Dolphin Square enfranchisement battle – the commercialisation of enfranchisement law

As well as clarifying a tricky legal point - click here for a link to our summary of the decision - , the dispute provides another example of how the 1993 Act is increasingly used for commercial purposes. 

The case concerns an ongoing bid by the tenants of Dolphin Square in Pimlico, London, to collectively acquire the freehold interest in their buildings, comprising 1,200 flats.  The freeholder (Friends Provident), and the tenants now look set for a full scale fight for ownership of the site. 

Two Westbrook companies purchased the head-lease and the under-lease in 2006, and at that time, the flats were only occupied on short term sub-leases.  Westbrook then set up a structure by which long leases were granted to several hundred newly registered companies, and those companies then proceeded to serve notice under the 1993 Act to collective purchase the Friends Provident’s freehold interest. 

This type of arrangement would have been impossible before the residence qualification test was removed from the 1993 Act, and it will be interesting to see what the court ultimately makes of it.  However, the sums involved (the second notice specified a price of £111.66m), the nature of the parties to the dispute and the complexity of the scheme all goes to show that the world of leasehold enfranchisement now holds commercial opportunities as well as protection for owner-occupiers, even if this perhaps wasn’t what the legislators intended!

by Richard Housley, Associate