Tenant Granted New Lease for Flat: £34,300 Premium Determined

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/OOAP/OLR/2021/0432 [ADDRESS] [POSTCODE] Applicant : [redacted] : [COUNSEL] [COMPANY] Respondent : [redacted] Representative : NA Type of [NAME] : Section 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members :

Judge Shepherd Kevin Ridgeway MRICS

Date of determination and venue : at 10 [ADDRESS] [POSTCODE] on the papers Date of decision : 13th July 2021

DECISION as amended under Rule34 (5) and (6) of the 2011 Regulations

Summary of the tribunal’s decision The appropriate premium payable for the new lease is £34300. The terms of the draft lease submitted to the Tribunal are approved.

2 Background 1. This is an [NAME] made by the applicant leaseholder pursuant to section 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the premium to be paid for the grant of a new lease of 97 [ADDRESS] [POSTCODE] (the “property”).

2. On 30th March 2021 [NAME] at Central London County Court made an order pursuant to s. 50 of the Act to the effect that the Applicant was entitled to a new lease. The freeholder landlord is missing. The case was transferred to the Tribunal to determine the value of the new lease. The property

3. The property comprises a two bedroom first floor flat.

4. The Tribunal did not inspect the property. Limited assistance was provided by some rather poor photographs in the report of the expert value employed by the Applicant, [APPELLANT]. The Tribunal are familiar with the location which is increasingly a sought after part of London. It lies to the West of Green Lanes on the “Haringey Ladder”. Green Lanes like many parts of London is being gradually gentrified as a younger more affluent population moves in. The tribunal’s determination

5. The tribunal determines that the value of the new leasehold at the date of the [NAME] was £34300. Reasons for the tribunal’s determination

3 6. The right to a new lease is conferred by Ch 2 of Pt 1 of the 1993 Act. By exercising the right the tenant acquires a new lease of the flat in substitution for his or her existing lease for a term expiring 90 years after the term date at a peppercorn rent ( s.56(1)). The tenant pays a premium which compensates the landlord for the loss of the remainder of the term. In the present case the landlord is missing and the procedure pursuant to ss50 and 51 of the Act has been followed.

7. The premium for the new lease is calculated in accordance with Sch 13, para 2 of the Act and is the aggregate of the following figures : (a) The diminution in value of the landlord’s interest in the flat; (b) The landlord’s share of the marriage value; (c) Any amount of compensation payable.

8. The calculation carried out by Mr [NAME] appears broadly sound. However, having considered his comparable evidence along with other comparables available, the Tribunal preferred a higher long leasehold valuation of £415,000. This results in a slightly higher Premium of £34,300. A calculation carried out by the Tribunal is attached as a schedule to this determination. The premium 9. The tribunal determines the appropriate premium to be £34300 A copy of its valuation calculation is annexed to this decision. The terms of the draft lease submitted to the Tribunal are approved.

Name: Judge Shepherd Date: 21st July July 2021

Appendix: Valuation setting out the tribunal’s calculations

Valuation for lease extension

[ADDRESS],[POSTCODE]

4

Valuation Date 23/12/2019

Lease Commencement 29/09/1984

Lease Term 99.00 years

Expiry Date

28/09/2083

Unexpired Term

63.77 years

Long Lease value

£400,000

Freehold VP value £404,000 +1% long lease value

Term 1 Term 2 Term 3

Ground rent £200.00 £300.00 £0.00

Reversion years

30.77 33.00 0.00

Capitalisation rate 7%

Deferment rate 5%

Compensation

£0.00

[NAME]

85.50%

Diminution of Landlord's interest

Ground rent £200

[NAME] 30.77 yrs @ 7.00% 12.50430742

£2,501

[NAME] £300

[NAME] 33.00 yrs @ 7.00% 12.75379002

PV of £1 30.77 yrs @ 7.00% 0.12469848

£477

[NAME] £0

[NAME] 0.00 yrs @ 7.00% 0

PV of £1 63.77 yrs @ 7.00% 0.[PHONE]

£0

Reversion to VP value £404,000

PV 63.77 yrs @ 5.00% 0.04454084

£17,994

Value existing freehold

£20,972

5

[NAME]'s interest on reversion of new lease

FH VP

£404,000

PV 153.77 yrs @ 5.00% 0.00055172

-£223

£20,750

Landlord's share of Marriage Value

Val. Tenant's interest new long lease £400,000

Val. [NAME]'s interest after reversion of new lease

£223

£400,223

Less

Val. [NAME]'s interest existing lease [NAME] 85.50% £345,420

Val. tenant's interest existing lease £20,972

£366,392

£33,830

Marriage Value at 50% £16,915

Compensation £0

PREMIUM £37,665

SAY

£37,660

6 Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) 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 ([NAME]), then a written [NAME] for permission must be made to the First- tier Tribunal at the [NAME] which has been dealing with the case. The [NAME] for permission to appeal must arrive at the [NAME] 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 ([NAME]).

7 CASE REFERENCE LON/00AC/OLR/2014/0106

First-tier Tribunal [NAME] (Residential Property)

Valuation under Schedule 13 of the Leasehold Reform Housing and Urban Development Act 1993

Premium payable for an extended leasehold Interest in [Property]

Valuation date: [Date]

FIRST-TIER TRIBUNAL

[NAME] (RESIDENTIAL PROPERTY)

Case reference : LON/OOAP/OLR/2021/0432 [ADDRESS] [POSTCODE]

Applicant : [redacted] : [APPELLANT] Respondent : [redacted] Representative : NA Type of [NAME] : Section 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members :

Judge Shepherd Kevin Ridgeway MRICS

Date of determination and : venue at 10 [ADDRESS] [POSTCODE] on the papers Date of decision : 13th July 2021

2 © CROWN COPYRIGHT Background 1. This is an [NAME] made by the applicant leaseholder pursuant to section 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the premium to be paid for the grant of a new lease of 97 [ADDRESS] [POSTCODE] (the “property”).

3. The property comprises a two bedroom first floor flat.

5. The tribunal determines that the value of the new leasehold at the date of the [NAME] was £34300.

3 Reasons for the tribunal’s determination 6. The right to a new lease is conferred by Ch 2 of Pt 1 of the 1993 Act. By exercising the right the tenant acquires a new lease of the flat in substitution for his or her existing lease for a term expiring 90 years after the term date at a peppercorn rent ( s.56(1)). The tenant pays a premium which compensates the landlord for the loss of the remainder of the term. In the present case the landlord is missing and the procedure pursuant to ss50 and 51 of the Act has been followed.

Name: Judge Shepherd Date: 21st July July 2021

Appendix: Valuation setting out the tribunal’s calculations

4

Appendix A Valuation for lease extension

97 [ADDRESS], [POSTCODE]

Valuation Date 05/06/2020

Lease Commencement 10/06/1993

Lease Term 99.00 years Expiry Date 09/06/2092 Unexpired Term

72.01 years

Long Lease value

£415,000

Freehold VP value £419,150 +1% long lease value

Term 1 Term 2 Term 3

Ground rent £75.00 £0.00 £0.00

Reversion years

72.01 0.00 0.00

Capitalisation rate 7%

Deferment rate 5%

Compensation

£0.00

[NAME] 85.84%

Diminution of Landlord's interest

Ground rent £75

[NAME] 72.01 yrs @ 7.00% 14.17632466

£1,063

Reversion to VP value £419,150

PV 72.01 yrs @ 5.00% 0.02979604

£12,489

Value existing freehold

£13,552

[NAME]'s interest on reversion of new lease

FH VP

£419,150

PV 162.01 yrs @ 5.00% 0.00036908

-£155

Landlord's share of Marriage Value

Val. [NAME]'s interest after reversion of new lease

£155

£415,155

Less

Val. tenant's interest existing lease [NAME] 85.84% £359,798

Val. [NAME]'s interest existing lease £13,552

£373,351

£41,804

Marriage Value at 50% £20,902

Compensation £0

Premium

£34,300

5

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) 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 ([NAME]), then a written [NAME] for permission must be made to the Firsttier Tribunal at the [NAME] which has been dealing with the case. The [NAME] for permission to appeal must arrive at the [NAME] 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 ([NAME]).