First-tier Tribunal Sets Freehold Purchase Price Under Statutory Terms

OUTCOME: Allowed

© CROWN COPYRIGHT 2014

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : VG/LON/OOAU/OAF/2023/0009 (1) Property : 90 [ADDRESS], [POSTCODE] Applicant : [redacted] : [NAME] Respondent : [redacted] Representative : Not applicable (missing landlord) Type of application : Application under sections 21(1) and 27(5) of the Leasehold Reform Act 1967 (“the 1967 Act”) Tribunal members :

[NAME] Valuer Venue : Remote Date of paper determination :

January 17 2024

DECISION

Decisions of the Tribunal (1) The tribunal determines that the price to be paid by the applicant for the purchase of the freehold on statutory terms is £876.

2 The Background 1. This is an application under section 21 (1) (a) of the 1967 Act pursuant to an order made by Judge Bell sitting at the County Court at Clerkenwell and Shoreditch on 6 September 2023 (“the order”).

2. Sections 21(1) and 27(5) of the 1967 Act concerns claims for the purchase of the reversionary freehold interest where the relevant landlord cannot be found. It enables the court to make a vesting order in respect of any interests of the landlord which are liable to acquisition.

3. Under section 27(5)(a) of the 1967 Act, the role of the tribunal is to determine the appropriate sum to be paid into court in respect of the landlord’s interests.

4. The applicant in this matter is Ms [APPELLANT] [NAME] . She is the qualifying tenant of 90 [ADDRESS], [POSTCODE] (“[NAME]”) with a long tenancy within the meaning of section 3(1) of the 1967 Act. The respondent freehold owners are unknown.

5. On 30 August 2022, the applicant made a Part 8 Claim at Clerkenwell and Shoreditch County Court for an order pursuant to section 21(1) of the 1967 Act seeking the freehold of [NAME]. The issue date is shown as 23 September 2022.

6. The applicant has been unable to ascertain the whereabouts of the respondent. The applicant subsequently applied for a vesting order under section 27(1) of the 1967 Act. The vesting order was granted subject to the determination of this tribunal.

7. The applicant has provided the tribunal with a valuation report prepared by Mr [NAME] (Hons), a Chartered Surveyor with [COMPANY] and Consultant to [NAME], Chartered Surveyors dated 5 January 2024.

8. Mr [NAME] is of the view that the premium to be paid for the freehold is £791 as at the valuation date of 23 September 2022. The Determination 9. After careful scrutiny the tribunal accepts the opinions expressed by Mr [NAME] in his valuation report dated 5 January 2024 save that: (i) The tribunal is not persuaded the annual ground rent charge is £3.05 as expressed at paragraph 2.7 of the report. No evidence is offered to substitute this

3 opinion and tribunal adopts the higher sum of £7.50 per annum in accordance with the short lease details given in the report at paragraph 8.3. The tribunal confirm the lease commencement date is 25 December 1850 for a term of 300 years.

(ii) The tribunal adopt a lower capitalisation rate of 6.5% for the current rent passing than proposed by the Expert. This is in accordance with the guidance offered in the decision [NAME] and others v Goff 2007 EGLR 83.

10. An adjusted calculation that adopts the revised parameters listed in (i)-(ii) results in a freehold purchase premium of £876. A copy of the tribunal’s valuation is attached to this decision.

11.

Accordingly, the tribunal determines that the premium to be paid in respect of the purchase of the freehold of [NAME] is £876. This sum is determined after review of the proposed TP1 at page 26 of the bundle in accordance with the terms of the order.

12. This matter should now be returned to the Clerkenwell and Shoreditch County Court under Claim Number Jo1EC472 in order for the final procedures to take place.

[NAME]: 17 January 2024

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Appendix A : Premium Valuation

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RIGHTS OF APPEAL 1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional Office within 28-days after the Tribunal sends written reasons for the Decision to the person making the application.

3. If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates (ie, give the date, [NAME] and the case number), state the grounds of appeal and state the result the party making the application is seeking.

© CROWN COPYRIGHT 2014

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : VG/LON/OOAU/OAF/2023/0009 (2) Property : 92 [ADDRESS], [POSTCODE] Applicant: [redacted] [NAME] : [NAME] Respondent : [redacted] Representative : Not applicable (missing landlord) Type of application : Application under sections 21(1) and 27(5) of the Leasehold Reform Act 1967 (“the 1967 Act”) Tribunal members :

[NAME] Valuer Venue : Remote Date of paper determination :

January 17 2024

DECISION

Decisions of the Tribunal (1) The tribunal determines that the price to be paid by the applicant for the purchase of the freehold on statutory terms is £913.

4. The applicant in this matter are [APPELLANT] and [NAME]. They are the qualifying tenants of 92 [ADDRESS], [POSTCODE] (“[NAME]”) with a long tenancy within the meaning of section 3(1) of the 1967 Act. The respondent freehold owners are unknown.

5. On 21 April 2022, a previous applicant Ms [APPELLANT] made a Part 8 Claim at Clerkenwell and Shoreditch County Court for an order pursuant to section 21(1) of the 1967 Act seeking the freehold of [NAME]. The issue date is shown as 10 May 2022.

6. Ms [NAME] had been unable to ascertain the whereabouts of the respondent. The applicant subsequently applied for a vesting order under section 27(1) of the 1967 Act. The vesting order was granted subject to the determination of this tribunal. The order included the direction that Ms [APPELLANT] be substituted as claimant by Ms [APPELLANT] and Mr [NAME], the present claimants.

7. The applicant has provided the tribunal with a valuation report prepared by Mr [NAME] (Hons), a Chartered Surveyor with [COMPANY] and Consultant to [NAME] [NAME] dated 5 January 2024.

8. Mr [NAME] is of the view that the premium to be paid for the freehold is £779 as at the valuation date of 10 May 2022. The Determination 9. After careful scrutiny the tribunal accepts the opinions expressed by Mr [NAME] in his valuation report dated 5 January 2024 save that:

3 (i) The tribunal is not persuaded the annual ground rent charge is £3.05 as expressed at paragraph 2.7 of the report. No evidence is offered to substitute this opinion and tribunal adopts the higher sum of £7.50 per annum in accordance with the short lease details given in the report at paragraph 8.3. The lease commencement date is 25 December 1850 for a term of 300 years.

(iii) They do not accept entirety value should exclude improvements. It is defined as the:

“The freehold market value with vacant possession of the whole property including outbuildings that occupy the site. [NAME] is assumed to be in a modernised condition and fully developing the value of the site”. (see Hague 7th Edition)

It is for this reason the tribunal adopt an entirety value of £615,000 given this was a contemporaneous sale with the valuation date.

10. An adjusted calculation that adopts the revised parameters listed in (i)-(iii) results in a freehold purchase premium of £913. A copy of the tribunal’s valuation is attached to this decision.

11.

Accordingly, the tribunal determines that the premium to be paid in respect of the purchase of the freehold of [NAME] is £913. This sum is determined after review of the proposed TP1 at page 60 of the bundle in accordance with the terms of the order.

12. This matter should now be returned to the Clerkenwell and Shoreditch County Court under Claim Number Jo1EC696 in order for the final procedures to take place.

[NAME]: 17 January 2024

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Appendix A : Premium Valuation

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