Tenant Granted Statutory Lease Extension for London Flat

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AE/OLR/2021/0859 HMCTS Code : P: PAPER REMOTE Property : [ADDRESS] [POSTCODE] Applicants : [redacted] Mr [COUNSEL] [NAME] (2) Representative : [RESPONDENT] Respondent : [redacted] : Not applicable (missing landlord) Type of application : Application under Section 50 and Section 51 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal members : Judge D Brandler Mr K Ridgeway MRICS Date of determination and venue : 15th December 2021 at 10 [ADDRESS] [POSTCODE] Date of decision : 15th December 2021

DECISION

Covid-19 pandemic: description of hearing This has been a remote hearing on the papers which has not been objected to by the parties. The form of remote hearing was P:PAPERREMOTE. A face-to- face hearing was not held because it was not practicable and no-one requested the same. The documents that we were referred to are in the Applicants’

2 bundle of 116 pages. The Respondent has played no part in these proceedings, being a missing landlord. The order made is described at the end of these reasons. Summary of the tribunal’s decision (1) The tribunal determines that the premium payable by the applicants for the enfranchisement of the subject property situated at [ADDRESS] [POSTCODE] is £48,000. (2) The terms of the lease extension are approved. Background 1. This is an application further to the order dated 07/07/2021 of Deputy District Judge Paul sitting at the County Court at Willesden, in the following terms: “IT IS ORDERED THAT a) The Claimants are qualifying tenants for the purposes of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) and accordingly are entitled to a statutory lease extension of their leasehold interest in the property known as [ADDRESS] [POSTCODE] (‘the Flat’). b) That the Claimants are not precluded by any provision of Chapter II of the Act from giving a valid notice under s42 with respect to the Flat. c) The whereabouts of the Defendant remain unknown and the Court is satisfied that no further steps are required for the purpose of tracing the Defendant d) the Claimants are prevented from giving notice to the [NAME] (or superior title holder), pursuant to the provisions of s42 Leasehold Reform, Housing and Urban Development Act 1993, because the whereabouts of the Defendant are not known/the [NAME] cannot be found. IT IS DECLARED THAT 1. The need to serve a notice pursuant to s42 of the Act upon the Defendant is hereby dispensed with.

2. The Claimants be granted a new lease of the Flat for a term of 90 years plus the unexpired term, for a peppercorn ground rent and

3 for a premium and upon such terms to be determined and approved by the Leasehold Valuation Tribunal.

3. The claim is hereby transferred to the Leasehold Valuation Tribunal who shall determine a. The price/premium payable for a statutory lease extension in accordance with the provisions of the Act; and b. The form of lease giving effect to the statutory lease extension…” Evidence 2. We have been provided with a detailed valuation report by Mr [NAME] (Surv) FRSA, dated 04/02/2021. We are advised by a letter from the Applicants’ representatives, [COMPANY] dated 23/11/2021, that that date is wrong and ask the Tribunal to accept that the date of the valuation is 29/03/2021. It is clear from the report that Mr [NAME] instructions are dated 04/02/2021 and the Tribunal therefore accepts on balance that the date of the valuation put forward by [COMPANY] Is correct. Mr [NAME] computes the premium to be £44,800. Lease details 3. The Respondent missing landlord is the lessor of the [ADDRESS], NW2 which comprises a two-storey mid-terrace house which has been converted into two flats. The First Floor flat is accessed from the front of the property via a tiled pathway toa porch with a wooden and glazed panned door. The boundary is a continuation of the ground floor property with a brick wall forming the next door boundary.

4. The front door leads to a short hallway which has a cupboard storage to the right. A single flight of carpeted stairs leads to the first floor flat which is all on one floor. The first floor flat comprises of two double bedrooms, and open plan kitchen/diner and a family bathroom.

5. The first floor flat is subject to a lease dated 2nd April 1982 for a term of 99 years from 1/1/1982. The ground rent is £50 pa.

6. The particulars of the first floor flat is as follows: (i) This is subject to a lease dated 2nd April 1982, for a term of 99 years from 1st January 1982, with some 59 years unexpired.

4 (ii) It is located in an end of terrace Victorian property which was constructed in the early 1900s. [ADDRESS] is in Cricklewood in the London Borough of Camden. There are good transport links. [ADDRESS] is a predominantly residential road that runs North East to South West off the A5 running into [ADDRESS]. The building lies at the junction of [ADDRESS] on the northside of the road. Valuation date 7. The valuation date is 29/03/2021, namely the date of the application to the Court.

8. The three comparable sales evidence considered by Mr [NAME] were all sold for £450,000 with varying lengths of lease. Reasons for the tribunal’s determination 9. The tribunal do not accept the valuation report of Mr [NAME] for three reasons. (i) He has used the wrong date for the beginning of the 99-year lease. The correct date being 1/1/1982. (ii) He has rounded up the [NAME] to 85. The Tribunal consider 83.8 to be more accurate. This difference is in part due to the difference in valuation dates provided. (iii) The correct valuation date is 29/03/2021 being the date of issue of the applicants’ claim in the County Court.

10. The Tribunal substitute its own calculations as set out at Appendix 1 to this decision.

11. The tribunal now remits the application back to the County Court at Willesden for any final orders that may be required.

The premium 12. The tribunal determines the appropriate premium to be £48,000. A copy of its valuation calculation is annexed to this decision.

5 Name: Judge D Brandler Date: 15th December 2021

Appendix 1: Valuation setting out the tribunal’s calculations

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) 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 (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. 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. 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. The application 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 making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

6 APPENDIX 1: CASE REFERENCE: LON/00AE/OLR/2021/0859

First-tier Tribunal Property Chamber (Residential Property)

Valuation under the Leasehold Reform Housing and Urban Development Act 1993

Premium payable for the lease extension for the [ADDRESS] [POSTCODE]

Valuation date: 29/03/2021

Valuation of lease extension

First Floor Flat

Valuation for lease extension

48B [ADDRESS], [POSTCODE]

Valuation Date 29/03/2021

Lease Commencement 01/01/1982

Lease Term 99.00 years Expiry Date 1/12/2080 Unexpired Term

59.76 years

Long Lease value

£450,000

Freehold VP value £454,500 +1% long lease value

Term 1 Term 2 Term 3

Ground rent £50.00 £0.00 £0.00

Reversion years

59.76 0.00 0.00

Capitalisation rate 6%

Deferment rate 5%

Compensation

£0.00

[NAME] 83.40%

Diminution of Landlord's interest

Ground rent £50

[NAME] 59.76 yrs @ 6.00% 16.15431254

£808

Rent Review 1 £0

[NAME] 0.00 yrs @ 6.00% 0

PV of £1 59.76 yrs @ 6.00% 0.[PHONE]

£0

Rent Review2 £0

[NAME] 0.00 yrs @ 6.00% 0

7

PV of £1 59.76 yrs @ 6.00% 0.[PHONE]

£0

Reversion to VP value £454,500

PV 59.76 yrs @ 5.00% 0.05416609

£24,618

Value existing freehold

£25,426

L/lord's interest on reversion of new lease

FH VP

£454,500

PV 149.76 yrs @ 5.00% 0.00067095

-£305

£25,121

Landlord's share of Marriage Value

Val. Tenant's interest new long lease £450,000

Val. l/lord's interest after reversion of new lease

£305

£450,305

Less

Val. tenant's interest existing lease [NAME] 83.40% £379,053

Val. l/lord's interest existing lease £25,426

£404,479

£45,826

Marriage Value at 50%

£22,913

Compensation £0

PREMIUM £48,034