First-tier Tribunal Sets Freehold Price at £150

OUTCOME: Allowed

1

Case Reference : CAM/33UH/OAF/2019/0003

Property : 5 [ADDRESS] [POSTCODE]

Applicants

: [redacted] : [NAME] and [NAME]: [RESPONDENT] of [NAME] : [NAME] to determine the price payable under section 9 and 27 of the Leasehold Reform Act 1967

Tribunal Members : [NAME] [NAME] (Hons)

Date of Decision : 4 July 2019

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2018

DECISION

The Tribunal determines that the price payable for the freehold of the [ADDRESS] [POSTCODE] is £150 and the amount of unpaid pecuniary rent payable for the property up to the date of the Conveyance is nil.

BACKGROUND

1. On 30 July 2018 the applicant [APPELLANT], the leaseholder of the Property, made [NAME] to the High Court of Justice (Chancery Division) seeking the right under Part 1 of the Leasehold Reform Act 1967 (the Act) to acquire the freehold of the Property.

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

2 2. On 31 January 2019, at the High Court of Justice (Chancery Division), Master Teverson found that the claim should have been brought to the County Court and ordered that it be transferred to the County Court in Central London.

3. On 22 March 2019 , at the County Court in Central London, HHJ Gerald found that the Claimant was prevented from giving notice to the [RESPONDENT] or [NAME] pursuant to the provisions of the Leasehold Reform Act 1967 Section 27 because the identity of the [RESPONDENT] or [NAME], if any, cannot be found.

4. He ordered that the First-tier Tribunal determine the terms of the conveyance to include the price payable for the purchase of the freehold and any amounts or estimated amounts determined by the tribunal as being due to the transferor from the Claimant .

5. Directions were given on 20 May 2019. The Directions were to the effect that the case could be dealt with without the need for an oral hearing and required the applicant to notify the Tribunal should they require an oral hearing to be held. The applicant did not request an oral hearing.

The Lease

6. The applicant acquired their leasehold interest in [ADDRESS] on 12 February 2001.

7. The property is registered at the Land Registry under [NAME] number NK259836

8. The property is subject to a lease of 500 years from 13 April 1739. The register of [NAME] states that the rent is not known. However, a copy of an agreement dated 26 November 1943 and supplied by the [NAME], Mr [NAME] at Appendix 7 to his report states that the rent is 4 shillings per annum (20p). Notwithstanding which is correct, the amount is so small as to be of little significance to the valuation.

9. The property was subject to a lease for 90 years from 23 January 2001 to [NAME], the occupier of the property, determinable by notice after his death. Mr [NAME] died on 28 July 2007 and the leasehold interest has been closed.

10. Section 9 of the Act sets out in detail the assumptions to be made and the procedure to be followed in carrying out the valuation. The effect of Section 27(1) is that the valuation date is the date on which the [NAME] was made to the Court – in this case the date it was transferred to the correct court, 31 January 2019.

11. There are various bases set out in Section 9 of the Act and the Tribunal determines that the appropriate basis is in Subsection 9(1) being that on 31 March 1990 the Rateable value of the house and premises was not above £5oo.

3 The Property

12. The valuation report provided by Mr [NAME] of [COMPANY] describes the property as a Grade 2 listed late 18c/early 19c property, formerly a pair of semi-detached cottages converted into a single dwelling. The construction is reported as external rough cast over a timber frame.

13. Accommodation is 2 receptions and kitchen and shower room to the ground floor and 2 bedrooms to the first floor. There is an external former wash house and the grounds extend to around 0.21 acres.

Basis of Valuation

14. Section 9 of the Act requires the [NAME] to assess the value of the Freeholder'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.

Consideration

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

16. Mr [NAME] submitted a report and appears to base his valuation of the following factors: Freehold Vacant Possession Value 125,000 Capitalisation of Existing Ground Rent 2% Deferment Rate 4.75% Remaining Term of Lease 219 years approx at the date of his valuation 4 June 2019.

17. Applying those factors to his valuation Mr [NAME] calculated the value of the Freehold to be £150.00.

18. The Tribunal noted that the valuation date used by Mr [NAME] was incorrect, it should have been the date of the [NAME] to the County Court. From the papers the Tribunal identified that the date of the [NAME] was the 31st January 2019, the date of transfer to the County Court from the High Court of Justice (Chancery Division) to which it had been incorrectly submitted. Given the length of the unexpired term, the effect on the valuation is minimal and the valuation date is assumed to be 31st January 2019.

19. Similarly the Tribunal might have taken issue with the methodology and some of the constituent parts of the valuation. However, again, given the length of the unexpired term and the overall effect those issues would have on the valuation the Tribunal decided that it was inappropriate to pursue such matters further.

20. 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 (£0.20), that such arrears would be minimal

4 and that unpaid pecuniary rent payable for the property up to the date of the Conveyance is nil.

Tribunal's Valuation

21. The Tribunal, having considered the information provided, including the substantial unexpired term of the lease, concluded that no benefit would be derived from challenging Mr [NAME] on the constituent parts of his valuation or the ground rent arrears. The Tribunal confirms Mr [NAME] valuation as being an appropriate amount to pay for the Freehold interest in the subject property.

22. The case must now be transferred back to Central London County Court.

[NAME] [NAME]: 23 July 2019

ANNEX – RIGHTS OF APPEAL

1. 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 at the Regional Office which has been dealing with the case.

2. 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].

3. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request to 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.

4. 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.

1

Case Reference : CAM/33UH/OAF/2019/0003

Property : 5 [ADDRESS] [POSTCODE]

Applicants

: [redacted] : [COUNSEL] and [NAME]: [RESPONDENT] of [NAME] : [NAME] to determine the price payable under section 9 and 27 of the Leasehold Reform Act 1967

Tribunal Members : [NAME] [NAME] (Hons)

Date of Decision : 4 July 2019

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2018

DECISION

BACKGROUND

The Lease

3 The Property

Basis of Valuation

Consideration

Tribunal's Valuation

[NAME] [NAME]: 23 July 2019

ANNEX – RIGHTS OF APPEAL

1

Case Reference : CAM/33UH/OAF/2019/0003

Property : 5 [ADDRESS] [POSTCODE]

Applicants

Tribunal Members : [NAME] [NAME] (Hons)

Date of Decision : 4 July 2019

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2018

DECISION

BACKGROUND

The Lease

3 The Property

Basis of Valuation

Consideration

Tribunal's Valuation

[NAME] [NAME]: 23 July 2019

ANNEX – RIGHTS OF APPEAL

1

Case Reference : CAM/33UH/OAF/2019/0003

Property : 5 [ADDRESS] [POSTCODE]

Applicants

Tribunal Members : [NAME] [NAME] (Hons)

Date of Decision : 4 July 2019

_______________________________________________

DECISION ____________________________________

© CROWN COPYRIGHT 2018

DECISION

BACKGROUND

The Lease

3 The Property

Basis of Valuation

Consideration

Tribunal's Valuation

[NAME] [NAME]: 23 July 2019

ANNEX – RIGHTS OF APPEAL