First-tier Tribunal Determines Missing Landlord Freehold Value

OUTCOME: Allowed

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Case Reference : CHI/5UG/OAF/2021/0017

Property

: [NAME], [ADDRESS] [POSTCODE]

Applicants

: [redacted]

: Commonhold and [RESPONDENT]

Respondent: [redacted] : To determine the price to be paid for the Freehold

interest pursuant to sections 9(1)(a) and 27

of the Leasehold Reform Act 1967.

Tribunal Members : Mr [NAME]. [NAME]. [NAME] of consideration on paper

: 28th July 2021

Date of Decision : 28th July 2021

DECISION

© CROWN COPYRIGHT 2021

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

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1. The Tribunal determines the value of the Freehold interest in accordance with the provisions of the Leasehold Reform Act 1967 at £26,635.00.

2. This decision is referred back to the County Court under reference number D00TA267.

Background

3. This application, made on the 6th May 2021, asks the Tribunal to determine the purchase price of the Freehold interest in a house pursuant to sections 9(1)(a) and 27 of the Leasehold Reform Act 1967 ("the Act").

4. The Applicants hold the long leasehold interest in the subject property. The Applicant wishes to purchase the Freehold but have been unable to trace the [NAME]. Accordingly they applied to Brighton County Court for it to be transferred to the Applicant under section 27 of the Act which sets out the procedure to be followed where a landlord is missing.

5. The Order was granted by District Judge Collins on 11th November 2020 which requires the price to be paid for the Freehold to be determined by the First-tier Tribunal (Property Chamber) on the basis that the appropriate method of valuation is under section 9(1) of the Leasehold Reform Act 1967.

6. The Tribunal did not inspect the property and the matter was considered, in accordance with Directions, on the basis of the papers submitted. Where considered appropriate the Tribunal did refer to information publicly available.

The Lease

7. The property forms part of an estate and is held under Lease dated 30th April 1570 for a term of 500 years expiring in 2070 at a ground rent of £00.44p (8s 8d). Under the Vesting Order the Judge determined the apportioned ground rent at £00.20p

The Law

8. Section 27 of the Act sets out procedural formalities. Section 9 sets out the valuation criteria to be adopted which are the same for missing landlord cases as cases where a landlord's identity is known.

Facts Found

9. By reference to Mr [NAME] report dated 8th January 2021:

10. [NAME] is a detached house created from two cottages and substantially extended. The accommodation comprises: Ground Floor: entrance hall,

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cloakroom, open plan living, dining and kitchen with 4 rooms floor. First Floor: master bedroom ensuite, four further bedrooms, 1 bathroom/w.c. and 2 shower rooms/w.c. Externally: hard standing, gardens and two fields laid to pasture

(approx 7 acres in total).

11. The property is located in a rural location approximately 1 1/2 miles from Sayers Common which has a community village shop. [ADDRESS] is 5 miles away with local facilities and mainline railway station.

Basis of Valuation

12. Section 9 of the Act requires the [NAME] to assess the value of the [NAME]'s interest for the duration of the present lease, followed by a notional 50 year lease extension at a modern ground rent, and finally to the reversionary value of the existing house or its site value if the house is assumed to have been demolished by that date. The valuation inputs are set out below.

Consideration

13. There was no hearing requested in this case and accordingly the Tribunal considered the matter by reference to the papers submitted.

14. Mr [NAME] submitted a report and based his valuation of the following factors:

Valuation under Section 9(1) of the Act as confirmed in the Vesting Order.

Valuation Date: Part 8 Claim dated 14th August 2019.

Freehold Vacant Possession Value: £875,000.00.

Site Value Percentage: 35.00%.

Section 15 Rent: 4.00%.

Apportioned Ground Rent: £00.20p.

Capitalisation of Existing Ground Rent: 5.00%.

Deferment Rate: 4.75%.

Remaining Term of Lease: 51 years approximately at the date of valuation 14th August 2019.

15. Applying those factors to his valuation Mr [NAME] calculated the value of the Freehold to be £26,635.00.

16. The Tribunal noted that no proposal or calculation had been made of the amount of outstanding Ground Rent which might be payable. The Tribunal find, given the amount of the Ground Rent (£00.20p), that such arrears would be minimal and therefore makes no decision on this point.

Tribunal's Valuation

17. The Tribunal, having considered the information provided in Mr [NAME] report, satisfied itself that the figures contained therein are derived from proper analysis

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of the available information confirms his valuation as being an appropriate amount to pay for the Freehold interest in the subject property.

Appeal Provisions 1. A person wishing to appeal this decision (on a point of law only) 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. Where possible you should send your application for permission to appeal by email to [EMAIL] as this will enable the First-tier Tribunal Regional office to deal with it more efficiently.

2. 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.

3. 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.

4. 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