Tenant Granted Right to Buy Freehold Interest for £40

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/24UP/OAF/2019/0014

Property

:

[ADDRESS] [POSTCODE]

Applicant: [redacted]

[NAME] [COUNSEL] &Ruth Mary Craven

Representative

:

[RESPONDENT]

Respondent: [redacted]

:

Type of Application

:

Leasehold Reform Act 1967 ([RESPONDENT] Landlord)

Tribunal Member

:

[NAME] [NAME] of Decision

:

12 April 2020

2

DECISION

The Tribunal determines that the price payable for the freehold interest is £40 and the amount of unpaid pecuniary rent is nil.

Background

1. By an Order of District Judge Stewart sitting at the County Court at Winchester and dated 20th November 2019, the Claimant was declared to be entitled to have vested in them the freehold to the premises known as [ADDRESS] [POSTCODE], pursuant to Section 27 of the Leasehold Reform Act 1967 (the “Act”) and by virtue of Section 8(1) of that Act.

2. It was further ordered that the appropriate sum to be paid into Court by the Claimant pursuant to Section 27 (5) of the Act shall be determined by the First Tier Tribunal and shall be so determined as if the Claimant had on 29 October 2019 (the date of the issue of the proceedings) duly given notice of their desire to purchase the freehold pursuant to Section 8 of the Act.

3. A valuation report prepared by Mr [NAME] dated 24 February 2020 has subsequently been provided assessing the purchase price at £40.

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

The Lease

5. The long leasehold title to the property is registered with title number HP404515 and it is held by way of a lease for a term of 1000 years from 15 January 1885.No copy of the registered lease is held by the Land Registry but a copy of the registered lease has been obtained from the deeds file relating to the next-door property,[ADDRESS]. On assignment in 1952 the rent was informally apportioned at £2.10 shillings (£2.50).

The Law

6. 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:

3 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.

7. 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.

8. 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.

9. The Tribunal takes account of the following decisions: Arbib v Cadogan (2005), [COMPANY] v Sportelli (2006) and [COMPANY] (2012).

The Premises

10. The property comprises a mid-terraced three storey house built in the early part of the 20th Century.

Evidence

11. In his expert report Mr [NAME] states that the accommodation comprises a sitting room, dining room and kitchen on the ground floor with 2 bedrooms and a bathroom room on the first. There is a third bedroom at second floor level. The property has undergone general modernization and refurbishment since it was purchased by the claimants in 2017 and is presented in excellent condition.

12. The property has the benefit of replacement PVCu sealed unit double glazed windows and a new front door.

13. There is no on-site parking although there is on road permit parking for residents.

14. Mr [NAME] based his determination on an open market value of the unimproved property at £490,000, a site value proportion of 30.00% (£147000) a capitalisation rate of 6% for the unexpired term and 5% on the reversion. He takes the valuation date at 29 October 2019.

15. In support of his open market value of £490,000 Mr [NAME] refers to the sale of 3 properties of similar sizes and with sale prices between £541,000 and £570,000 with sale dates between July 2019 and the current date.

4 Decision

16. The valuation date by order of the County Court is at 29 October 2019 that being the date of issuing proceedings in the County Court.

17. Whilst I do not accept all of the constituent parts of Mr [NAME] valuation I am able to confirm his valuation of £40.

18. I also determine that the amount of unpaid pecuniary rent payable for the property up to the date of the proposed conveyance is nil.

19. The Tribunal therefore determines that the price payable for the freehold interest is £40 and the amount of unpaid pecuniary rent is nil.

[NAME] H [NAME] [NAME] 12 April 2020

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 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.