First-tier Tribunal Sets Premium for Collective Enfranchisement

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AU/OCE/2019/0061 Property : 68 [ADDRESS] [POSTCODE] Applicant : [redacted] [NAME] [APPELLANT] and [NAME] (2) and 68 [COMPANY] (3) Representative : [COUNSEL] solicitors [RESPONDENT] and [COUNSEL] Respondent : [redacted] :

Type of [NAME] : Section 26 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members : Judge Dutton Mr L Jarero FRICS Date of determination and venue : 20th May 2019 at 10 [ADDRESS] [POSTCODE]

DECISION

Summary of the tribunal’s decision (1) The appropriate premium payable for the collective enfranchisement is, pursuant to s26 of the Leasehold Reform, Housing and Urban Development Act 1993 (the Act), £25,170, as set out in the report of Mr [NAME] dated 7th May 2019

2 Background 1. On 31st October 2018 [NAME] the owner of 68A [ADDRESS] [POSTCODE] and [NAME] and [NAME] the owners of [ADDRESS] aforesaid made [NAME] in the County Court at Clerkenwell and Shoreditch under claim E05EC162 pursuant to section 26(1) the Act, for a determination of the premium to be paid for the collective enfranchisement of 68 [ADDRESS] [POSTCODE] (the “Property”).

2. By an Order of the Court dated 20th March 2019 and by virtue of s27 of the Act, it was ordered that the freehold of the Property would be vested in the names of the first and second applicants. It would appear that the third applicant has been formed to be the nominee purchaser.

3. On 20th May 2019 the matter came before us for the determination of the premium payable for the freehold and the terms of the Transfer.

4. In a bundle of papers supplied before we considered the matter, this being a paper determination, we had copies of the papers lodged at the Court, HM Land Registry copies of the freehold and leasehold titles, the leases and a draft transfer. In addition, we were provided with an expert’s report by Mr [NAME] dated 7th May 2019. This report is relied upon by the applicants to establish the premium to be paid for the freehold.

5. Mr [NAME] report gave details of the three flats in the Property. There is a two bed-roomed property on the lower ground floor of some 645 sq feet enjoying access to the demised part of the rear garden. On the raised ground floor is a two bed-roomed flat of some 560sq feet, again enjoying access to the demised rear garden. Finally, there is a three bed-roomed flat on the first, second and attic level of some 1108 sq feet.

6. It is not suggested that there are tenants’ improvements we need to consider. The leases are in similar terms for 125 years with in excess of 95 years still left to run.

Accordingly, there is no marriage value to consider. The ground rent rises by £50 each 25 years, appearing to cap at £300 per annum for the final 25 years.

7. Mr [NAME] is of the opinion that the capitalisation rate appropriate is 6% and the deferment rate at 5%. There is apparently a small amount of appurtenant land valued at £100.

8. In assessing the freehold value of the flats he has relied on comparable properties at [ADDRESS], [ADDRESS], N7, [ADDRESS] N5 and flat A 50 [NAME] N7. He has made some time adjustments for flat A 50 [NAME]. Using a rate per square foot taken from the

3 average of the first two comparables of £747.50 he assessed the long lease/share of freehold value for the upper flat of £828,230. In respect of the raised ground floor flat he took the adjusted comparables at [ADDRESS] and [NAME] giving an average rate per square foot of £789 and thus a value of £441,840. In respect of the lower ground floor property he said that there was an absence of recent comparable evidence. However, taking the rate for the other two flats and the mean of those he concluded that a rate per square foot of £768.25 would be appropriate for the lower ground floor property, giving a value of £495,521.

9. Utilising these valuation elements, he concluded that the premium payable in respect of the lower ground floor flat would be £7,510, for the raised ground floor flat it would be £6,960 and for the upper flat £10,600. Together these give an overall premium payable for the freehold of the Property of £25,170 including £100 for the appurtenant land. The tribunal’s determination 10. The tribunal determines that the premium payable if £25,170. Reasons for the tribunal’s determination 11. We have carefully considered the report of Mr [NAME]. We consider that he has very fairly reflected the values of the comparables, some being, in our view, in perhaps better areas. We are content to accept the rates put for capitalisation and deferment at 6 and 5% respectively. The leases having terms remaining of more than 80 years means that there is no marriage value to consider.

12. Taking opinion of Mr [NAME] into account, which we accept, we find that the premium payable for the freehold of the Property is £25,170. There appear to be no additional sums for us to consider.

13. The transfer is approved as drawn, although we note it is drafted in the name of the nominee purchaser.

Name: Judge Dutton Date: 20th May 2019

Rights of appeal

4 By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. 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 Tribunal at the regional office which has been dealing with the case. 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]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. 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. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).