Owning a leasehold property in England and Wales is not always straightforward. Sometimes leaseholders end up in situations where the legal owner of a property is absent or cannot be located. In cases where the property needs to be managed, sold or transferred, it complicates matters. Where a property has an absent freeholder, the correct procedure is to apply to Court for what we call a “Vesting Order”. In this article, Disputes Resolution lawyer Leo Mineo who provides specialist advice on property management issues, will explain the concept of Vesting Orders for absent freeholders, exploring what it means and how it works.

What is a Vesting Order

A Vesting Order is issued by the Court and allows transfer of the ownership of a property from one party to another. Where there is an absent Freeholder who is missing, unresponsive or incapacitated, it facilitates the management or disposal of properties.

Leaseholders are provided authority by The Leasehold Reform, Housing and Urban Development Act 1993 to seek a Vesting Order. This Act authorises leaseholders to buy the property’s freehold or alternatively enables them to secure an extension to their lease agreement, which can help with selling the Property.

This would enable the leaseholder (i) to extend the lease or (ii) to buy the Freehold together with some fellow Leaseholders in order to then sell the property (iii) to manage the property.

When a Vesting Order may be necessary

Vesting Orders apply to several scenarios where the freeholder is absent:

1. Probate: If the owner passes away without leaving a will or if the beneficiaries cannot be located, a Vesting Order may be sought to transfer ownership of the property to the appropriate parties.
2. Abandonment: If a property owner has abandoned the property and cannot be located, a Vesting Order may be necessary to enable the property to be sold or managed effectively.
3. Missing or incapacitated owner: In situations where the legal owner of a property is missing or incapacitated, a Vesting Order can provide a legal mechanism for transferring ownership to a trustee or other designated party who can manage the property on behalf of the absent owner.

How does a Vesting Order work

In order to obtain a Vesting Order, the parties must apply to the relevant authority, usually the County Court. The application must contain the details of the case, the reasons why a Vesting Order is being sought and the supporting evidence or documentation.

For a Vesting Order, the Court must be satisfied that:

1. The tenants are qualifying tenants;
2. The premises qualify;
3. At least two third of the qualifying tenants are part of the claim; and
4. The tenants have taken all reasonable steps to try and locate the absent Freeholder

Once the application is filed with the Court, the case will be reviewed in order to assess if a Vesting Order is appropriate. To do so, the Court will need to review evidence, and consider the interests of any third parties affecting by the application, which may require a hearing.

When the Court has completed their assessment, they may issue a Vesting Order with specific terms and conditions as to the transfer of ownership. It may include appointing a trustee or other responsible party to manage the property on behalf of the absent freeholder.

Benefits of Vesting Orders

The key benefits of Vesting Orders include:

1. Clarity: transferring a property ownership through the Court offers clarity and certainty regarding the ownership of the property.
2. Protecting interest: the interests of all parties involved are protected by ensuring that property is managed and disposed of in accordance with the law and in the best interest of the absent freeholder.
3. Facilitation of transactions: In cases where property needs to be sold or transferred, the process can be streamlined by providing a clear legal mechanism for the transfer of ownership.

How we can help

Vesting Orders are a valuable tool, enabling the effective management and disposal of properties where the legal owner is missing or unresponsive. This legal mechanism for transferring ownership, ensures that properties are managed and disposed of in accordance with the law and by protecting the interests of all parties.

Should you need assistance with an absent freeholder, please feel free to contact the highly experienced Property Disputes lawyers by emailing disputeresolution@tvedwards.com or call 020 3440 8000 for us to help you through the process to managing or disposing of your property.

Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.