Tenant Granted Right to Buy Freehold Under Leasehold Reform Act

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : BIR/00CR/0AF/2024/0006

Property : 20 [ADDRESS] [POSTCODE] Applicant: [redacted] : [NAME] Respondent: [redacted] : Not applicable (missing landlord) Type of [NAME] : [NAME] 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 :

8 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 £2,485.

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The Background 1. This is an [NAME] 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 applicant in this matter is [APPELLANT]. She is a qualifying tenant of 20 [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 [NAME] 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 [NAME] was transferred to [NAME] by order of District Judge Rouine dated 2 January 2024.

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 [NAME] dated 7 March 2024.

8. Mr [NAME] is of the view that the premium to be paid for the freehold is £1,900 as at the valuation date adopted of 3 November 2023. The Determination 9. After scrutiny the tribunal accepts the opinions expressed by Mr [NAME] in his valuation report dated 7 March 2024 save that:

3 (i) [NAME] has allocated 32.5% 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 large corner plot the property occupies which is significantly larger than the neighbouring properties and the sites of the comparable property transactions submitted by [NAME]. The dwelling is situated adjacent to a car parking area. The Upper Tribunal decision, [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 the guidance and previous Upper Tribunal decisions this tribunal has deemed 42.5% of the Entirety Value should be adopted as the apportioned site value in this valuation.

(ii) The Standing House value given by [NAME] is £167,600. This is based upon the analysis of three comparable property sales, the details of which are submitted by [NAME] in his report. The tribunal note that all three properties are mid terraced dwellings, and the Standing House value is based upon the average price for these three sales corrected for date of sale. The tribunal, based upon their knowledge and experience has adjusted this average value offered by [NAME] with a 5% supplement to reflect the end of terrace location with adjacent parking. The 5% uplift applied by the tribunal to the proposed value produces a Standing House value of £176,000.

10. An adjusted calculation that adopts the revised parameter listed above at (i)–(ii) results in a freehold purchase premium of £2,485. 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 £2,485.

12. This matter should now be returned to the County Court sitting at Birmingham under Claim Number L30BM003 in order for the final procedures to take place. [NAME]

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Appendix A : Premium Valuation

Annex A Property: 20 [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 176,000 £ Standing House Value 176,000 £ Term 1 Ground rent payable - £ [NAME] @ 68.5 years @ 7% 14.14700 - £ Total term value - £ First Reversion Section 15 Ground Rent Entirety value 176,000 £ Site apportionment at 42.5% of Entirety value 42.5% 74,800 £ Decapitalisation rate at 5.25% 5.25% 3,927 £ [NAME] @ 50 years @ 5.25% 17.57281 Deferred @ 68.5 years @ 5.25% 0.03005 Years Purchase 0.5280 First Reversion value 2,073 £ Standing House Value in current condition 176,000 £ Deferred @ 118.5 years @ 5.25% 0.0023 Second reversion value 409 £ 409 £ Freehold Purchase Premium 2,483 £ Notes:

1. The price for freehold is calculated in accordance with the Leasehold Reform Act 1967 S9 as amended. Section 9(1) valuation basis in accordance with RV less than £1000 as at March 1990.

5 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 (ie, 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.