DENTON Hall has emerged with egg on its face after a mistake was made in what is described as the largest ever residential property deal.
The error occurred over the sale of the Kensington Estate by the Smith's Charity to the Wellcome Trust for £280 million.
Twenty-six blocks of tenants did not receive the proper notification on the deal after Denton Hall misinterpreted the Landlord and Tenant Act 1987.
The Act states that leases capable of being ended in seven years must be ignored, and instead the leases beneath them should be looked at.
The firm missed the fact that a lot of the leases had break clauses which depended on the layout of the building and on whether flats were sublet in the first seven years.
The mistake only came to light after two-thirds of the estate had been sold. Denton Hall took advice from David Neuberger QC, of Falcon Chambers, and a deed of rectification was inserted. The Smith Charity was forced to pay the money back with interest to the Wellcome Trust.
A statement from Denton Hall said the mistake was put right and that neither the charities nor tenants had suffered any loss.
It said the mistake only affected a very small part of the estate, 26 buildings valued at approximately £6.5 million out of the estate's total value of around £280 million. It denied reports that the deal was in jeopardy.
A spokeswoman for Denton Hall said the deal was “continuing as per contract” and relations were still good between both parties and both sets of lawyers.
One property lawyer commented: “It's not the easiest Act to interpret.”