Service of ground rent demand: Whether knowledge of facts is assumed to pass through successive landlords (Obi-Ezekpazu v Avon Ground Rents – 2022)

Where knowledge of a leaseholder’s address is not passed to a landlord by its predecessor in title and ground rent demands are subsequently issued to the incorrect address, are ground rents and administration charges payable?

The background

In Obi-Ezekpazu v Avon Ground Rents [2022], the leaseholder was the original tenant of a property under a long lease granted in 2006. At the date the lease was granted, the leaseholder lived at a different address, which was used as the address of the leaseholder at the Land Registry and documented in the lease. The leaseholder moved to a new address in 2010, notifying the landlord and the management company through their appointed agents. In 2013, the landlord and management company parted ways with their agents and appointed a new company.

The respondent landlord acquired the freehold reversion of the property on 11 September 2013 and appointed its own new agents. Ground rent payment demands were issued to the leaseholder at their original address as noted at the Land Registry and in the lease.

Proceedings were brought in the First-tier Tribunal to determine the payability of service and administration charges incurred by the landlord and management company, the leaseholder having failed to pay ground rent demanded. The FTT found that demands were payable; it was not possible that the leaseholder had notified the landlord of her address in 2010, as the landlord only acquired its interest in 2013. The landlord was entitled to payment of the sums demanded. The leaseholder appealed.

The decision

The Upper Tribunal found in favour of the leaseholder and allowed the appeal. Ground rent demands had not been validly made, and further the landlord was not entitled to demand administration charges as a result of the non-payment of ground rent.

The UT referred to a Court of Appeal decision in Oldham MBC v Tanna [2017] where it was stated that an address for an individual stated on the land register may be relied upon as their residential address “unless there is a statutory requirement to the contrary”. S.166(6) of the Commonhold and Leasehold Reform Act 2002 was such a statutory requirement, stating that notices should be served at an address at which the tenant wishes to be given notices.

The UT found that s.166 provided for a positive right for the tenant to nominate an address, replacing any other assumed addresses. In this case, the leaseholder had nominated an alternative address and that was the address at which demands were to be sent. As a result, rent demands were not valid and administration charges not payable.

The UT held that each successive landlord should not be taken to possess the same knowledge of facts as its predecessors as no agency relationship exists between them.

Advice and action for landlords

Although the UT in this case found that the landlord was entitled to rely on the registered title and the address noted in the lease for the leaseholder, this general rule was displaced where there exists a “statutory requirement to the contrary”. A nominated address under s.166 will displace the rule, and it is therefore imperative for landlords to regularly obtain up-to-date address information for leaseholders.

Landlords are advised to routinely audit their records and verify postal addresses to ensure that ground rent demands are served validly.