First-tier Tribunal Determines Freehold Interest Price

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AE/OCE/2025/0019 Property : 96 [ADDRESS], [POSTCODE] Applicants : [redacted] (also known as [COUNSEL]) (2) [COUNSEL] [NAME] : [COUNSEL] [COMPANY], Solicitors Respondents : [redacted] (2) [COUNSEL] [NAME] (3) [COUNSEL] [NAME] : Not represented Type of [NAME] : Section 27 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members : Judge I Mohabir Mr K Ridgeway MRICS Date of decision : 30 April 2024 amended 16 June 2025

DECISION

2 Summary of the tribunal’s decision (1) The premium payable by the Applicant for the freehold interest is £18,022.22. Background 1. This is an [NAME] made by the Applicants, as qualifying tenants pursuant to section 27 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the price to be paid for the freehold interest of 96 [ADDRESS], [POSTCODE] (the “property”).

2. By an initial notice pursuant to Section 13 of the 1993 Act (the ‘Initial Notice’) dated 10 November 2023 (the 'Relevant Date') the Applicants sought to exercise the right to collective enfranchisement in respect of the property.

3. The Respondents are joint owners of the freehold interest in the property and are, therefore, ‘the reversioner’ within the meaning of the 1993 Act.

4. The Initial Notice was served at the only known addresses for the Respondents, being [ADDRESS], [POSTCODE]. Apparently, this was the address for the First Respondent only. The Initial Notice was also served on the First Applicant by email. No addresses or email addresses could be found for the [NAME].

5. The First Respondent responded to the Initial Notice by way of a Section 21 Counter-Notice under the Act, in which she confirmed acceptance of the Claimants’ Initial Notice and the premium proposed.

6. By a claim form dated 1 March 2024 under action number L00WI582 in the County Court at Willesden, the Applicants applied under section 26(1) of the Act for a vesting order on the basis that the [NAME] could not be found on terms to be determined by the First Tier Tribunal (Property Chamber).

7. By Order of District Judge Griffiths dated 14 November 2024 the Court recorded that it was satisfied that the Respondents could not be found and made the vesting order sought. It ordered, inter alia, that the matter be transferred to the Tribunal for a determination of the price to be paid for the freehold interest and the terms of the Transfer (TR1)

8. On 5 March 2025, the Tribunal issued Directions, which included a direction that its determination would be based solely on the basis of the documentary evidence filed by the Applicants.

3 9. The valuation evidence relied on by the Applicant is set out in the report prepared by Mr [APPELLANT] dated 14 December 2024. Decision 10. The determination in this matter took place on 30 April 2025 and was based solely on the valuation evidence contained in the report of Mr [NAME].

11. The Tribunal relied on the description of the property internally given in Mr [NAME] report at paragraph 5 for the description. The Tribunal did not carry out an inspection.

12. The existing leases of the ground and first floor flats are dated 10 November 1983 and for terms of 999 years from 29 September 1983 therefore having 958.86 years unexpired. The current ground rent payable is £1.00 per annum with effect from 29 September 1983.

13. The demised areas of the lease of the first floor flat at [ADDRESS] differ from the current accommodation as it has been extended into the loft and includes a rear dormer window. Such alterations to the demised premises have been carried out without the previous consent in writing of the Lessors as required by the terms of the lease.

14. Because the leases have more than 80 years to run, marriage value is not payable.

15. We agreed with Mr [NAME] that the value of the ground rent should be capitalised at 9% per annum on the basis that they are nominal without any fixed increases. We agree with Mr [NAME] figure on the basis that the ground rents are insignificantly low and being unattractive to investors due to the administrative level required in order to collect the nominal value of ground rent.

16. We agree with Mr [NAME] use of 5% for the deferment of the reversion, which is in accordance with the decision in [NAME].

17. We agree with [NAME] that the freeholders’ interest before enfranchisement is that the ground floor flat (No. [ADDRESS]) has a long leasehold value of £475,000 (Four Hundred and Seventy-Five Thousand Pounds) and the first floor flat (No. [ADDRESS]) has a long leasehold value of £460,000 (Four Hundred and Sixty Thousand Pounds).

18. We agree with Mr [NAME] that development value in respect of the development of the loft and enlargement of the first floor flat [ADDRESS] into the second (loft) floor which has already taken place in the sum of £12,500.

4 19. We agree with Mr [RESPONDENT] that compensation is payable to the Respondent for breach of the user clauses in the lease by the sub-division of both units to create a total of six units. We also agree that the retrospective grant by the freeholder to do or to reinstate the flats to comply with the user clause would be approximately £5,000.20.

20. We agreed with Mr [NAME] that the value of the any appurtenant land of the remaining communal grounds have a nominal value of £500.00.

21. We, therefore, confirm Mr [NAME] valuation of the freehold interest in the sum of £18,022.22. 22. The terms of the draft Deed Transfer (TR1) are approved save that the First Applicant’s name is amended to [NAME]. Name: Tribunal Judge I Mohabir Date: 30 April 2025 amended 16 June 2026

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).