First-tier Tribunal Approves Freehold Interest Valuation

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/24UD/OAF/2019/0006

Property

:

30 [ADDRESS] [POSTCODE]

Applicant: [redacted]

:

[COUNSEL] LLP

Respondent: [redacted]

:

Type of Application

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Leasehold Reform Act 1967 ([RESPONDENT] Landlord)

Tribunal Member

:

[NAME] of Decision

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27 August 2019

DECISION

The Tribunal accepts Mr [NAME] valuation and determines that the purchase price is fairly assessed at £85.00 and that the amount of unpaid pecuniary rent payable for the property up to the date of the proposed conveyance is nil.

The draft TP1 at tab 4 of the bundle is approved subject to amending the price shown in boxes 9 and 12 from £83 to £85 adding the date of the Tribunal’s determination as 27 August 2019 in Box 12 and correcting its reference to CHI/24UD/2019/0006.

2

Background

1. By an Order of Deputy District Judge Horsey sitting at the County Court at Southampton and dated 3 May 2019 the Tribunal is required to determine the price payable under section 9 of the 1967 Act and to approve the conveyance in accordance with Section 27(3) of the Act.

2. The Tribunal made directions on 13 June 2019 indicating that the application would be determined on the papers unless an objection was received and requiring submission of a bundle.

3. No objection has been received and the matter is therefore determined on the bundle received which includes an expert valuation report from [NAME] dated 29 July 2019 in which he values the freehold interest at £85.00 with a valuation date of 10 April 2019.

4. An inspection of the property has not been made.

The Lease 5. The property is held by way of a lease dated 26 April 1957 between (1) [COMPANY] and (2) [NAME] [NAME] and is for a term of 999 years from 25 March 1957 at a fixed rent of £5 per annum. The Law 6. Section 27(5) of the Act provides: The appropriate sum which in accordance with Section 27(3) of the Act to be paid in to Court is the aggregate of: a. Such amount as may be determined by (or on appeal from) the appropriate Tribunal to be the price payable in accordance with Section 9 above; and b. The amount or estimated amount (as so determined) of any pecuniary rent payable for the house and premises up to the date of the Conveyance which remains unpaid.

7. Section 9 of the Act sets out in detail the assumptions to be made and the procedure to be followed in carrying out the valuation. The effect of Section 27(1) is that the valuation date is the date on which the application was made to the Court.

8. There are various bases set out in Section 9 of the Act and the Tribunal determines that the appropriate basis is in Subsection 9(1) being that on 31 March 1990 the Rateable value of the house and premises was not above £500. The Premises

3 9. The property comprises a detached bungalow probably constructed in the mid 1950s and improved by the [NAME] in the four years since their purchase. The accommodation comprises an entrance hall, master bedroom with en-suite, 2 bedrooms, bathroom/wc, sitting room/dining room and an open plane modern kitchen.

10. Outside there is a good-sized plot with a garden front and rear and a garage/workshop of generally poor construction. Evidence 11. In arriving at £83 Mr [NAME] capitalizes the rental income of £5 per annum at 6%. He values the existing unimproved property at £300,000 with a site value at 30% equating to £90,000.

12. However, as the reversion is so far into perpetuity he places no value upon it. His opinion is that a nominal figure of £85 fairly covers the freeholder’s loss. Decision 13. The Tribunal accepts Mr [NAME] valuation and determines that the purchase price is fairly assessed at £85.00 and that the amount of unpaid pecuniary rent payable for the property up to the date of the proposed conveyance is nil.

14. The draft TP1 at tab 4 of the bundle is approved subject to amending the price shown in boxes 9 and 12 from £83 to £85 adding the date of the Tribunal’s determination as 27 August 2019 in Box 12 and correcting its reference to CHI/24UD/2019/0006. D [NAME] 27 August 2019 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office, which has been dealing with the case. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

2. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

3. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.