Tenant Granted Extended Lease Under 1993 Act

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AP/OLR/2019/0525 Property : 118B [ADDRESS] [POSTCODE] Applicants : [redacted] [COUNSEL] (2) Representative : John Bays & Co Solicitors Respondent : [redacted] : None Type of [NAME] : Missing landlord S50 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal Members : [NAME] [NAME] and venue of Hearing : 24 [ADDRESS] [POSTCODE] Date of Decision : 24 June 2019

DECISION

2 Decision

1. The premium payable for the extended lease is £4,497 (four thousand four hundred and ninety seven pounds).

Background

2. On 29 August 2018 the Applicants made an [NAME] to the Edmonton County Court under Chapter I of Part I of the Leasehold Reform Housing and Urban Development Act 1993 (“the Act”) seeking a vesting order under Section 50(1) of the Act providing for the existing lease to be surrendered and a new lease be granted in accordance with the Act as the landlord cannot be found.

3. Deputy District Judge Harris sitting at Edmonton County Court on 19 March 2018 made an order under claim No. E02ED005 transferring the [NAME] to the Tribunal for determination of the terms of the conveyance and the appropriate sum to be paid into court for the interest to be vested in accordance with Schedule 13 of the Act.

4. The Tribunal issued Directions on 26 April 2019 providing for the case to be determined on the basis of documents alone and without an oral hearing.

5. The flat is held under a lease for 125 years from 24 June 1987 at a rent of £50 pa for the first 25 years, rising to £100 pa for 25 years, rising to £150 for 50 years and £200 pa for the remaining 25 years. The unexpired term at the valuation date is 94.16 years.

Expert Evidence

6. The Tribunal considered a report dated 12 June 2019 of [NAME]. [ADDRESS] is a one-way street to the east of the High Road.

7. The property comprises a converted first floor flat within a terraced two storey house with a two-storey bay to the front and shallow front garden. The house dates from c1920. The flat consists of two rooms, kitchen/diner and bathroom/wc. The tenant’s improvements include double glazing, new kitchen and bathroom.

8. Details of comparable evidence referred to sales from July 2018 to March 2019. No details of any adjustments for time were provided in the report

9. [ADDRESS] [POSTCODE], a one-bedroom ground floor flat with shared garden was sold on 8 February 2019 at £325,000 with a lease for 189 years from 25 December 1987. It is slightly smaller than the subject property but in a better location.

3 10. 82b [ADDRESS] [POSTCODE], a ground and first floor maisonette, sold 19 March 2019 for £308,000 with a lease for 999 years from 25 March 1976. The Property is in fair condition but in a better location.

11. 125 [ADDRESS] [POSTCODE], a ground floor flat with garden, sold 2 July 2018 for £310,000 with an unexpired term of 98 years. This is a better location.

12. 31a [ADDRESS] [POSTCODE], a ground floor flat with garden, sold on 19 October 2018 for £312,000 with a long lease. A slightly poorer location.

13. 70a [ADDRESS] [POSTCODE], a first floor flat completed 9 October 2018 at £305,000.

14. Using the comparable evidence Mr [NAME] valued the extended lease at £290,000 based on £300,000 less £10,000 for tenant’s improvements.

15. The capitalisation rate used was 7%. No evidence of any settlements was produced. The deferment rate adopted was 5%.

16. A valuation was attached to the report indicating a premium of £4,497.

Decision

14. Valuation date. The valuation date is 29 August 2018, being the date of the [NAME] to the County Court.

15. Capitalisation and Deferment Rate. The Tribunal agrees that 7% is the appropriate capitalisation rate for the ground rent and that there is no reason to depart from the generic deferment rate for flats of 5%.

16. Enfranchisement Price. Doing the best it can on the limited information provided by Mr [NAME] the Tribunal determines the premium at £4,497 in accordance with his report. The Act does not provide for set off of costs against the premium.

17. Terms of the Transfer. The draft lease at 2.1 should provide that the landlord lets with limited title guarantee.

[NAME]

24 June 2019

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ANNEX 1 - 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 Tribunal 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 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.

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.

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