Tenant Granted Right to Buy Freehold Interest Under Leasehold Reform Act

OUTCOME: Allowed

© CROWN COPYRIGHT 2014

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/00CR/OAF/2024/0007 Property : 66 [ADDRESS] [POSTCODE] Applicants : [redacted] :

[COUNSEL] Solicitors (Ref: DF/J10225-0001)

Respondent: [redacted] : Not applicable (missing landlord) Type of application : Application under sections 21(1) and 27(5) of the Leasehold Reform Act 1967 (“the 1967 Act”) Tribunal members : [NAME] [NAME] : Remote Date of paper determination :

26 July 2024

DECISION

Decision of the Tribunal (1) The tribunal determines that the price to be paid by the applicant for the purchase of the freehold on statutory terms is £2,086.

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The Background 1. This is an application under section 21 (1) (a) of the 1967 Act pursuant to an order made by His Honour Judge Rawlings sitting at the County Court at Birmingham on 1 March 2024 (“the order”).

2. Sections 21(1) and 27(5) of the 1967 Act concerns claims for the purchase of the reversionary freehold interest where the relevant landlord cannot be found. It enables the court to make a vesting order in respect of any interests of the landlord which are liable to acquisition.

3. Under section 27(5)(a) of the 1967 Act, the role of the tribunal is to determine the appropriate sum to be paid into court in respect of the landlord’s interests. This to be done in accordance with section 9 of the 1967 Act.

4. The applicants in this matter are [NAME] and [NAME]. They are the qualifying tenants of 66 [ADDRESS] [POSTCODE] (“the Property”) with a long tenancy within the meaning of section 3(1) of the 1967 Act. The respondent freehold owners are the successors in title to Mr [NAME] and Mrs [NAME].

5. On 22 November 2023 following an Application to Court on 3 November 2023, a Part 8 Claim was issued at Dudley County Court for an order pursuant to section 21(1) of the 1967 Act seeking the freehold of the Property. The Application was transferred to Birmingham Business and Property Courts by order of District Judge Rouine dated 9 January 2024. The case number was changed at the Court transfer from K00DD677 to the current allocated case number L30BM004.

6. The applicant has been unable to ascertain the whereabouts of the respondents. The applicant subsequently applied for a vesting order under section 27(1) of the 1967 Act. The vesting order was granted subject to the determination of this tribunal.

7. The applicant has provided the tribunal with a valuation report prepared by Mr [NAME] [NAME], a Consultant Chartered Surveyor acting on behalf of Adcocks Solicitors dated 11 March 2024.

8. Mr [NAME] is of the view that the premium to be paid for the freehold is £1,800 as at the valuation date adopted of 3 November 2023.

3 The Determination 9. After scrutiny of the valuation report dated 11 March 2024 the tribunal accepts the opinions expressed by Mr [NAME] save that the Expert has allocated 30% of the Entirety Value to the site value. The tribunal has reviewed the site size, shape and location of the property. It has had regard for the size of the plot the property occupies which is larger than the neighbouring properties and the plot sizes of the comparable property transactions submitted by the expert. The dwelling is situated adjacent to a car parking area with a garage at the rear. There are gardens to front and rear of the dwelling. The Upper Tribunal decision, [NAME], [NAME] [NAME] v Liverpool City Council (LRA/78/2015) provides guidance on the matters to consider in determination of the appropriate percentage of the entirety value attributable to the site. In accordance with this guidance and previous Upper Tribunal decisions this tribunal has deemed 37.5% of the Entirety Value should be adopted as the apportioned site value in the premium valuation.

10. An adjusted calculation that adopts the revised Entirety Value parameter as described at paragraph 9 results in a freehold purchase premium of £2,086. A copy of the tribunal’s valuation is attached to this decision.

11.

Accordingly, the tribunal determines that the premium to be paid in respect of the purchase of the freehold of the property is £2,086.

12. This matter should now be returned to the County Court sitting at Birmingham under Claim Number L30BM004 in order for the final procedures to take place.

[NAME]

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Appendix A : Premium Valuation

Annex A Property: 66 [ADDRESS] [POSTCODE] Lease Data Lease commencement date: 28/04/1712 Lease Expiry date: 27/04/2092 Length of Term: 380 Years Valuation date 03/11/2023 Unexpired term as at valuation date: 68.50 Years Rent receivable by landlord : Payable from valuation date for 68.5 years - £ Rates: Capitalisaton rate (%) 7.00 Deferment rate (%) 5.25 Decapitalisation rate (%) 5.25 Values Entirety Value 164,000 £ Standing House Value 164,000 £ Term 1 Ground rent payable - £ YP @ 68.5 years @ 7% 14.14700 - £ Total term value - £ First Reversion Section 15 Ground Rent Entirety value 164,000 £ Site apportionment at 37.5% of Entirety value 37.5% 61,500 £ Decapitalisation rate at 5.25% 5.25% 3,229 £ YP @ 50 years @ 5.25% 17.57281 Deferred @ 68.5 years @ 5.25% 0.03005 Years Purchase 0.5280 First Reversion value 1,705 £ Standing House Value in current condition 164,000 £ Deferred @ 118.5 years @ 5.25% 0.0023 Second reversion value 382 £ 382 £ Freehold Purchase Premium 2,086 £

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RIGHTS OF APPEAL 1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional Office which has been dealing with the case.

2. The application for permission to appeal must arrive at the Regional Office within 28-days after the Tribunal sends written reasons for the Decision to the person making the application.

3. If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed despite not being within the time limit.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates (ie, give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking.