First-tier Tribunal Sets Leasehold Property Purchase Price at £60

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/24UP/OAF/2019/0007

Property

:

49 [ADDRESS] [POSTCODE]

Applicant: [redacted]

:

[APPELLANT]

Respondent: [redacted]

:

Type of Application

:

Leasehold Reform Act 1967 ([RESPONDENT] Landlord)

Tribunal Member

:

[NAME] of Decision

:

22 July 2019

DECISION

The Tribunal determines that the that the purchase price is fairly assessed at £60 and that the amount of unpaid pecuniary rent payable for the property up to the date of the proposed conveyance is nil.

2

Background

1. By an Order of District Judge Stewart sitting at the County Court at Winchester and dated 30 April 2019 the Tribunal is required to determine the price payable under section 9 of the 1967 Act.

2. In a covering letter to the Tribunal dated 17 May 2019 it is stated that an Expert Valuation report is not to be filed due to the “very nominal interest” and that the expertise of the Tribunal is to be relied upon.

3. The Tribunal made directions on 13 June 2019 requiring an expert’s report to be submitted and this was received on 1 July 2019.

4. The report by [NAME] of [COMPANY] is dated 23 June 2019 and values the freehold interest “as at the date of valuation” at £60. Mr [NAME] states the date of valuation is 17 May 2019.

5. An inspection of the property has not been made.

The Lease 6. The property is held by way of a lease dated 22 November 1908 between (1) [NAME] and (2) [NAME] and is for a term of 999 years from 29 September 1908 at a fixed rent of £5 per annum. The Law 7. Section 27(5) of the Act provides: The appropriate sum which in accordance with Section 27(3) of the Act to be paid in to Court is the aggregate of: a. Such amount as may be determined by (or on appeal from) the appropriate Tribunal to be the price payable in accordance with Section 9 above; and b. The amount or estimated amount (as so determined) of any pecuniary rent payable for the house and premises up to the date of the Conveyance which remains unpaid.

8. 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 application was made to the Court.

3 9. 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 £500. The Premises 10. The property comprises a two storey double bayed Victorian built centre terraced house.

11. The accommodation comprises an entrance hall, lounge with kitchen off on the ground floor with landing, three bedrooms and bathroom/WC on the first floor.

12. There are gardens front and rear but no garage or off-street parking facility. Evidence 13. Mr [NAME] capitalizes the rental income of £5 per annum at 8% rather than his “benchmark” of 7% to reflect the unattractive investment due to the income being not subject to review and uneconomic to collect.

14. In view of the very long unexpired term Mr [NAME] is of the opinion that the reversion has no value and it is not therefore necessary to provide a Market Value of the property or discount rate. Decision 15. The date of valuation is the date of the application to the County Court not to the Tribunal as indicated by Mr [NAME]. However, in view of the length of the reversion this error does not affect the valuation provided.

16. The Tribunal accepts Mr [NAME] valuation and determines that the that the purchase price is fairly assessed at £60 and that the amount of unpaid pecuniary rent payable for the property up to the date of the proposed conveyance is nil.

D [NAME] 22 July 2019 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office, which has been dealing with the case. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

2. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for

4 permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

3. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking