First-tier Tribunal Sets Freehold Acquisition Premium

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference

: LON/00BK/OCE/2023/0053

Property : 142 [ADDRESS] [POSTCODE] Applicant : [redacted] : [COUNSEL] [COMPANY] Respondents : [redacted] Representative of [COUNSEL] (2) [COUNSEL] as the Personal Representative of [COUNSEL] : N/A Type of [NAME] : Section 24 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members : Judge Tagliavini Mrs [NAME] of (paper) determination and venue : 25 July 2023 at 10 [ADDRESS] [POSTCODE] Date of decision : 25 July 2023

DECISION

2 Summary of the tribunal’s decision (1) The tribunal determines that the premium payable for the freehold of 142 [ADDRESS] [POSTCODE] is £37,632.00 ( Thirty seven Thousand, Six Hundred and Thirty Two Pounds) plus £100 (One Hundred Pounds) for additional area set out in paragraph 2 of the s.13 Notice. (2) The tribunal approves the terms of transfer as set out in the draft TRI subject to the claimant/applicant amending paragraph 8 of the draft to reflect the premium payable as set out in paragraph (1) above. _____________________________________________________ Background 1. This is a claim made in the County Court sitting at Central London made by the applicant nominee purchaser pursuant to section 24 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the right to acquire the freehold and a determination of premium to be paid for the collective enfranchisement of 142 [ADDRESS] [POSTCODE] (the “property”) and the terms of transfer.

2. On 22 February 2023 Deputy District Judge Lightman ordered that the applicant is entitled to acquire the freehold interest in 142, [ADDRESS], [POSTCODE] for the terms set out in the initial notice, but subject to the costs set out in paragraph 6 of that order. As the parties have not entered into a contract, the applicant now applies for a determination of the terms of the transfer and the ‘appropriate sum’ as set out in paragraph 3(1)(b) to Schedule 5 of the Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act). The issues 3. As the respondents played no active role in this claim no issues were able to be agreed between the parties. The hearing 4. The hearing in this matter took place on the papers on 25 July 2023 and the applicants were represented by [COMPANY]. The respondents/defendants did not present any evidence to the tribunal and were not represented.

5. Neither party asked the tribunal to inspect the property and the tribunal did not consider it necessary to carry out a physical inspection to make its determination.

3 6. The applicants relied upon the expert report and valuation of [NAME] (Hons) MRICS dated 10 May 2023 having inspected the subject property on 19 December 2018 and established the valuation date is 29 July 2020 being the date of the claim made in the county court. The tribunal’s determination 7. The tribunal determines that the premium payable for the freehold of 142 [ADDRESS] [POSTCODE] is £37,632.00 (Thirty seven Thousand, Six Hundred and Thirty Two Pounds) plus £100 (One Hundred Pounds) for additional area set out in the s.13 Notice. Reasons for the tribunal’s determination 8. The subject property comprises a mid-terraced house circa 1890 converted into three flats on the ground, first and second floors. The three flats are held on the terms summarised below: Two bedroom ground floor flat held under a lease dated 15 May 1985 on a term of 99 years with effect from 24 June 1984. One bedroom first floor flat held under a lease dated 26 April 1985 for a term of 189 years with effect from 24 June 1984. One bedroom second floor flat held on a lease dated 16 May 1985 for a term of 125 years with effect from 16 May 1985.

9. In his report Mr [NAME] stated the gross internal area is 610 square feet (57 square metres). Mr [NAME] adopted a capitalisation rate of 5% following Sportelli. As the two participating leases (first and second floor) have a remaining lease term in excess of 80 years no marriage value is payable. Mr [NAME] adopted a relativity of 80.25% having relied on [NAME] and [NAME] graphs and taken the hope value at 5% by relying on his judgement and experience.

10. Mr [NAME] also relied upon a number of ground and upper floor two bedroom flats as comparables to the subject property. These are [ADDRESS]; [ADDRESS]; [ADDRESS]; [ADDRESS]; [ADDRESS]; [ADDRESS]; [ADDRESS] and [ADDRESS]. These properties were said to be located within a quarter of a mile radius of the subject property and within a year of the valuation date and produced a price per square foot of £665 to £973. Although none of the comparables comprised one-bedroom flats, the tribunal is satisfied Mr [NAME] made adequate adjustments in his report to reflect this and the other differences between the subject flats and the comparable properties he relied upon.

4 11. The tribunal accepts the approach taken by Mr [NAME] to his valuation and determines the appropriate premium to be paid for the freehold of the subject property is £37,632.00 as set out in his valuation.

Name: Judge Tagliavini Date: 25 July 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).