First-tier Tribunal Sets Freehold Interest Price at £1275

OUTCOME: Allowed

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : MAN/00EQ/OLR/2022/0043 Property : 14, [ADDRESS] [POSTCODE] Applicant : [redacted] : [NAME] [NAME] : [COMPANY] : [COUNSEL] [NAME], Solicitors

Landlord : Kingswood (Wilmslow) [RESPONDENT] : [NAME] of Application : Section 48(1) Leasehold Reform, Housing and Urban Development Act 1993 Tribunal Members : Tribunal Judge C Wood

Tribunal Member [NAME] of Decision : 5 December 2023

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DECISION

© CROWN COPYRIGHT 2023

ORDER 1. The Tribunal determines as follows: (1) in accordance with section 48(1) of the Leasehold Reform, Housing and Urban Development Act 1993, (“the Act”) that the price payable in respect of the freehold interest in the Property is £1275; and, (2) as agreement has been reached between the Applicant and [NAME] regarding the terms of the new lease, and between the applicant and the [NAME] in respect of the price payable in respect of its interest in the property, the tribunal has no jurisdiction to make any further determinations.

BACKGROUND 2. By an application dated 28 November 2022, (“the Application”), the Applicant sought determinations as to: (1) the premium to be paid for the lease; and (2) the other terms of the acquisition which remain in dispute.

3. By directions dated 5 January 2023, the matter was to be determined by way of paper determination, subject to the right of the parties to request an oral hearing.

4. No request was received and the matter was scheduled for determination on Tuesday 19 September 2023.

5. The Tribunal concluded that, having regard to the issues for determination, no inspection was necessary.

6. Both parties had made written representations to the tribunal in accordance with the Directions. LAW 7. The relevant provisions of Section 48 of the Act provide as follows- (1) Where the landlord has given the tenant-

(a) a counter-notice under section 45 which complies with the requirement set out in subsection (2)(a) of that section, or (b) …. but any of the terms of acquisition remain in dispute at the end of the period of two months beginning with the date when the counter- notice….was so given, the Tribunal may, on the application of either the tenant or the landlord, determine the matters in dispute. (2) Any application under subsection (1) must be made not later than the end of the period of six months beginning with the date on which the counter-notice…was given to the tenant. EVIDENCE 8. The Applicant’s position, as set out in its Statement of Case and replies to the Respondent’s Statement of Case, is summarised as follows: (1) the chronology of events including, without limitation, the service of the notice of claim to a lease extension dated 5 April 2022, (“the Claim Notice”), the receipt of a counter-notice dated 8 June 2022 from [NAME], (“the Counter-notice”) and the receipt of a Notice to Act Independently dated 28 June 2022 from the [NAME] are recorded, together with the details of the Applicant’s proposals as set out in the Claim Notice and [NAME]’s counter- proposals as set out in the Counter-notice; (2) the [NAME] also recites his acknowledgement following receipt of a letter dated 12 October 2022 from the [NAME] of his mistaken assumption regarding the value of the Intermediate Leaseholder’s interest and the subsequent agreement of the price payable for that interest of £4350; (3) in response to the Respondent’s Statement of Case, in which reference is made to correspondence from the [NAME] dated 26 August and 3 October 2022 in which he confirms agreement of a price payable of £2820 for [NAME]’s interest (accepting [NAME]’s counter-proposal as set out in the Counter-notice), the [NAME] refers to an email dated 4 October 2022 from [NAME] rejecting the assertion that an agreement has been reached because of the absence at that time of any agreement regarding the price payable for the interest of the [NAME]; (4) reference is made to correspondence between the parties in January/February 2023 in which the [NAME] confirms to [NAME] that agreement has been reached regarding the price payable for the [NAME]’s interest and proposing a price payable of £1275 for [NAME]’s interest; (5) no agreement has been reached with [NAME] as to the price payable; (6) the [NAME] confirms receipt of a draft lease from [NAME] and his recommendation of its acceptance as drafted to the Applicant. 9. [NAME]’s position, as set out in its Statement of Case and Statement in Reply, is summarised as follows: (1) reference is made to the correspondence from the Applicant dated 26 august and 3 October 2022 as evidence of agreement having been reached as to the price payable of £2820 for [NAME]’s interest; (7) [NAME] states that, with regard to the “terms of acquisition”, the parties’ positions as set out in paragraph 8.3 of the Notice and paragraph 10.3 of the Counter-notice are “not dissimilar”, leaving no outstanding terms for determination by the Tribunal; (8) [NAME] asserts that the subsequent proposal received from the [NAME] of £1725 for [NAME]’s interest is of no relevance as a prior binding agreement had been made, as set out in (1) above.

REASONS 10. The parties and, in particular, their representatives are reminded of their duties to the Tribunal under Rule 3(4) of the Tribunal Procedure (First-

tier Tribunal) (Property Chamber) Rules 2013, namely, to help the Tribunal to further the overriding objective and to co-operate with the Tribunal generally. In this respect, the Tribunal notes with regret the omission by both parties from their written evidence of correspondence between themselves, presumably because it was not considered to be helpful to their case.

11. Having considered the parties’ evidence of the sequence of events between the service of the Notice up to and including the issue of a draft lease by [NAME] and the recommendation of its acceptance by the [NAME], the Tribunal notes as follows: (1) it would have been possible for the parties to agree the various elements of the transaction, namely, the price payable for [NAME]’s interest, the price payable for the [NAME]’s interests and the other terms of acquisition which, in this case, are the terms of the new lease, independently: that is, there is no presumption of interdependence; (2) it appears that, at the time of issue of the Counter-notice, [NAME] regarded itself as the [NAME] to negotiate all of the terms of the transaction but that this position was altered on the issue by the [NAME] of the Notice to Act Independently which made it clear that agreement of the price payable for its interest should be made directly between the Applicant and the [NAME]; (3) the Tribunal therefore considers that, as a matter of law and fact, from 28 June 2022, [NAME]’s rights were limited to negotiating the price payable for its interest and the terms of the new lease; (4) the Tribunal accepts that, in agreeing to the terms as set out in the Counter-notice, the [NAME] was acting under a mistaken assumption which he did not acknowledge until some time later. It is arguable, but in the event irrelevant to this determination, that the [NAME] was put on notice of his mistake, or at least should have made further enquiry of the position at that time, on

receipt of the Counter-notice by reason of the significantly greater value attributed by [NAME] to the [NAME]’s interest; (5) the Tribunal accepts nonetheless that, by their email dated 4 October 2022, [NAME] were clear in their rejection of the Applicant’s position that the terms of the transaction had been agreed and it considers it would be inequitable to allow them to resile from that position subsequently to secure a higher price for its interest; (6) having regard to the correspondence between the Applicant’s and [NAME]’s representatives in January/February 2023, the Tribunal is satisfied that agreement has been reached on the terms of the acquisition, in the form of the draft lease issued by [NAME] and accepted as drafted by the Applicant, and the Tribunal therefore has no jurisdiction under section 48 of the Act to make any determination in this respect; (7) the Tribunal is further satisfied that no agreement has been reached between [NAME] and the Applicant regarding the price payable in respect of [NAME]’s interest; (8) the only evidence available to the Tribunal regarding the valuation of this interest is the statement by [NAME] in the Counter-notice and the limited evidence of valuation in the [NAME]’s letter dated 1 February 2023; (9) in the absence of any further evidence, the Tribunal having regard to the [NAME]’s valuation and also relying on its own knowledge and experience accepts the valuation of £1275 and determines that this is the purchase price payable for [NAME]’s interest. (10) The Tribunal notes that the only evidence before it that agreement has been reached with the [NAME] for a purchase price of £4350 in respect of its interest are the statements from the [NAME] to this effect. There is no reason for the Tribunal to question that such agreement has been reached. The Tribunal therefore

has no jurisdiction under section 48 of the Act to make a determination in this respect.

Judge C Wood 5 December 2023