First-tier Tribunal Grants Statutory Lease Extension

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AE/OLR/2023/0697 HMCTS code (paper, video, audio) : P: PAPERREMOTE Property : Ground floor flat, Garden Ground and Dustbin Space at 36 [ADDRESS], [POSTCODE] Applicant : [redacted] : [NAME] [COUNSEL] LLP Respondent : [redacted] : - Type of [NAME] : Section 49 of the Leasehold Reform Act, Housing and Urban Development Act 1993 Tribunal members : Judge D Brandler Mr K Ridgeway MRICS Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 18 December 2023

DECISION

2

Decisions of the tribunal (1) The premium payable is £42,488 (forty-two thousand four hundred and eighty-eight pounds) (2) This matter is now remitted to the County Court at Willesden under claim number J01WI793 to give effect to the Vesting Order The background 1. This is an [NAME] made under section 50 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of a price to be paid for a statutory lease extension for the Ground floor flat, Garden Ground and Dustbin Space at 36 [ADDRESS], [POSTCODE] (“the property”), where the landlord, [RESPONDENT] (“the Respondent”) is missing.

2. The claim was issued on 6 September 2022 and on 24 August 2023, District Judge Griffiths sitting at the County Court at Willesden made an order under claim number J01WI793 transferring the [NAME] to this Tribunal to determine the price.

3. The Tribunal issued Directions on 25 October 2023 providing for the case to be determined on the basis of documents alone without an oral hearing 4. The flat is held under a lease for 99 years from 25 March 1981 between [NAME] and [NAME] [NAME] & [NAME] [NAME], at a rent of £25 pa. expiring on 24 March 2080. Expert evidence 5. The Tribunal considered a report dated 14 November 2023 prepared by [NAME] (Hons) FRICS.

6. The property is situated in [ADDRESS] which is off [ADDRESS] to the north and [ADDRESS] to the south and parallel to [ADDRESS] (A089). The property is approximately 500 yards from various shops in [ADDRESS].

7. The property is a ground floor flat with its own entrance from the street. The property contains 2 bedrooms, a lounge, kitchen and bathroom. The bathroom is accessed from the lounge. The property also has the benefit of its own section of garden which is closest to the property measuring approximately 30 feet. The property also has a section of front garden closest to the front door.

3 8. The property is in basic condition, the only improvement is UPVC double glazed windows and doors from the original single glazed wooden windows. Mr [NAME] measurement of the property is a gross internal area of 614 sq.ft.(57 sq.m).

9. There are two possible dates of valuation, the date of issue at the county court, and the date on which the court issued the claim to the absent landlord, 27 September 2022. Mr [RESPONDENT] determines that correct valuation date is 27 September 2022.

10. As at 27 September 2022 the unexpired term of the lease was 57.49 years.

11. Mr [NAME] adopted a capitalisation rate of 8% and a deferment rate of 5% based on the [NAME] decision 12. Mr [NAME] relied on sold prices for 7 comparables nearby to arrive at the value of the extended lease.

13. Based on the comparable evidence Mr [NAME] adopted £296,590 as the value of the long lease value of the subject property.

14. Mr [NAME] valuation was appended to his report and produced a premium of £42,488. Decision 15. Valuation date: The valuation date as approved by the Applicant’s valuer is 27 September 2022. The date the claim was sent to the absent landlord. The unexpired term at the valuation date is 57.49 years.

16. Valuation of the extended lease. The best comparables are those located closest to the subject property, all within a short distance. The tribunal accepts the expert’s nominal freehold value of the property at £296,590, the extended lease value at £293,625, and the existing lease value at £226,684.

17. Relativity is accepted at 76.43% 18. Capitalisation and Deferment Rate. The Tribunal accepts both the capitalisation rate of 8% and deferment rate of 5%.

19. Using these figures the Tribunal accepts the expert’s determination that the premium to pay for the lease extension is £42,488.

4 Name: Judge Brandler Date: 18 December 2023

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).