First-tier Tribunal Sets Freehold Purchase Price When Landlord Untraceable

OUTCOME: Allowed

© CROWN COPYRIGHT 2014

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

BIR/00CN/OAF/2023/0026

Property : 4 [ADDRESS], [POSTCODE] Applicant: [redacted] :

[APPELLANT]

Respondent : [redacted] : 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] [NAME] [NAME] : Remote Date of paper determination : 5 January 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 £7,830.

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The Background 1. This is an application under section 21 (1) (a) of the 1967 Act pursuant to an order made by Deputy District Judge Edden sitting at the County Court at Dudley on 16 November 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. This to be done in accordance with section 9 of the 1967 Act.

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

5. On 28 September 2023 following an Application to Court on 19 September, a Part 8 Claim was issued at Dudley County Court for an order pursuant to section 21(1) of the 1967 Act seeking the freehold of the Property.

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 [NAME] [NAME] [NAME], a Consultant Chartered Surveyor acting on behalf of Adcocks Solicitors dated 23 November 2023. 8. [NAME] [NAME] is of the view that the premium to be paid for the freehold is £6,700 as at the valuation date adopted of 19 September 2023. The Determination 9. After careful scrutiny the tribunal accepts the opinions expressed by [NAME] [NAME] in his valuation report dated 23 November 2023 save that:

3 (i) The tribunal has adopted a Standing House Value in vacant possession of £163,000. The Expert provides no cogent evidence to support his assertion that the cost of carrying out the proposed upgrading to the property amounts to £30,000 and the value of the dwelling in current condition is £143,000. This is not validated by the submitted comparable evidence. The tribunal has reviewed the photographic evidence and based upon their knowledge and experience determined reduced detriment caused to the property value by the current obsolescence. It is the tribunal opinion that the diminution in value caused to the Standing House Value by the obsolescence illustrated in the submitted photographs amounts to £10,000.

(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.

(iii) The applicants Expert has allocated 30% of the Entirety Value to the site value. The tribunal has reviewed the site size, shape and location. It has had regard for the appurtenant space offered by the garage in the nearby block and the guidance offered in Upper Tribunal decision [NAME] v Liverpool City Council (LRA/78/2015). It has deemed 35% of the property value should be adopted as the apportioned site value.

10. An adjusted calculation that adopts the revised parameters listed in (i)- (iii) results in a freehold purchase premium of £7,830. 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 the property is £7,830.

12. This matter should now be returned to the County Court sitting at Dudley under Claim Number K00DD574 in order for the final procedures to take place. [NAME]

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Appendix A : Premium Valuation

5 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, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking.