Leasehold Properties: Do You Get Heaven and Earth?
When buying a leasehold property the importance of the lease precisely describing the demised area is often not realised until the tenant wishes to develop the property.
The common principle is that the freehold interest in land will include everything below the surface and up to the sky. The same principle applies to leasehold land where the whole of land and buildings are included in the demise.
There have been two recent cases challenging the scope and limitations principle.
In the recent high court case of Ralph Kline Ltd v Metropolitan and County Holdings Ltd it was considered whether a lease of the upper part of a building or lease of the whole, without express limitation, demised to the tenant the air space above.
The property was located in Finchley Road, London, and the description of the demised property was very detailed to include the airspace to the height of 8 meters. The tenant wished to register the airspace lease. It was decided that the airspace immediately above the roof had also been demised and the tenant was able to register this lease.
In comparison the recent case of Gorst v Knight in which the tenant of a ground floor maisonette, which due to its lack of height restricted the use of the maisonette, proposed to extend an existing cellar by digging down in to the subsoil.
“The maisonette” was separately expressed to include “the foundations and the void or cellar below the ground floor”. The judge agreed that the language of the lease was sufficient to indicate that the soil beneath the cellar and foundations was not demised and the tenant could not dig down into the subsoil to extend the basement.
These cases are an interesting commentary on the interpretation of the the definition of ‘demise’ in leases and underline the importance, for both parties, of a clear and precise description, particularly where a lease includes the roof, foundations or outside area and there is a possibility of future development.
Here at Gregg Latchams, we can help draft leases in clear and precise language as well as advise on any disputes you may be having with your landlord or tenant over the wording of your lease. Get in touch with us now for a chat about your lease.