Tenant Secures Statutory Lease Extension Despite Missing Landlord

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AH/OLR/2024/0651 P:PAPERREMOTE Property : [ADDRESS], [POSTCODE] Applicant : [redacted] : [COUNSEL] [NAME] Respondent : [redacted] : None Type of [NAME] : Missing landlord S50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 Tribunal Members : [NAME] and venue of Hearing : 7 January 2025 Remote hearing on the papers

Date of Decision : 7 January 2025

DECISION

This has been a remote hearing which has been consented 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 all issues could be determined

2 in a remote hearing. The documents that the Tribunal were referred to are in a bundle, the contents of which have been noted. The order made is described below.

Decision 1. The premium payable is £26,100 (twenty six thousand one hundred pounds). The proposed Deed of Surrender and grant of a New Lease is approved subject to the amendments at paragraph 16 below. The case is remitted to the County Court at Croydon under Claim Number K02CR826. Background

2. This case relates to an [NAME] made under section 50 of the Leasehold Reform, Housing and Urban Development Act 1993 (as amended) for a determination of the price to be paid for a statutory lease extension of a flat and garden held under a lease, where the landlord is missing. The [NAME] was made in the County Court at Croydon on 18 September 2023. The case was transferred to this Tribunal to determine the terms of the new lease and the price by District Judge Keating on 6 March 2024.

3. The Tribunal was provided with a report and valuation dated 24 January 2024 prepared by Mr [NAME] (Cantab) MRICS of [NAME]. The report included statements confirming that he had complied with the requirements of the rules, protocols and directions of the tribunal and his duty to the Tribunal as an expert witness; the report complied with Royal Institution of Chartered Surveyors Practice Statement: Surveyors Acting as Expert Witnesses.

Evidence

4. The Tribunal considered the valuation report of Mr [NAME] in which he described the property, provided brief details of five comparables, confirmed that there was no need to adjust the sales evidence for time as they were all within a few months of the valuation date and his reasons for adopting the capitalisation and deferment rates. The report did not include any explanation as to the basis on which he had valued the existing lease.

5. The property is a ground floor flat in a converted three storey semi detached house converted into four flats house located in a residential area comprising dwellings of a similar age and character close to local amenities.

6. The flat, when the lease was granted comprised two rooms, kitchen, bathroom/wc and a balcony. The windows are uPVC double glazed, the flat has gas fired boiler central heating via radiators. The balcony has been enclosed , the kitchen moved into the extension, the former

3 kitchen is now a second bedroom. Part of the rear garden was included in the demise, originally the garden was accessed via a path at the side of the property, since the alteration to the balcony a spiral staircase has been erected to provide access to the garden which is effectively at lower ground floor level due to the slope of the site. The small front garden is communal.

7. The flat is subject to a lease for a term of 99 years from 1 January 1989 at £50 pa for the first 33 years of the term, £75 for the next 33 years and £100 pa for the remainder of the term. There were 64.3 years unexpired at the valuation date (Mr [NAME] had used 66.3 years in his valuation).

8. Mr [NAME] adopted a capitalisation rate of 7.5% based on agreements reached with other chartered surveyors where the ground rent income was modest and a deferment rate of 5% based on the [NAME] decision.

9. He relied on sold prices for four comparables nearby to arrive at the value of the extended lease. On the basis of the comparables he was of the opinion that the value of the extended lease of the subject premises was £244,000. The existing lease value in the valuation was stated as £203,235. However, there was no explanation as to how he had arrived at that figure.

10. His valuation which was included in the report produced a premium of £25,802.

Decision

11. Valuation date. The valuation date is 18 September 2023, the date of service of the claim. The unexpired term at the valuation date is 64.3 years. Mr [NAME] had used an incorrect start date of the term.

12. Valuation of the extended lease. The tribunal accepts the value proposed of £244,000 based on the comparable evidence provided.

13. Valuation of existing lease. The tribunal accepts the proposed value of £203,235 since it is within normal relativity parameters for a lease of this length.

14. Capitalisation and Deferment Rate. The Tribunal accepts the capitalisation rate of 7.5% since the ground rents are modest. The deferment rate of 5% is also accepted.

15. Enfranchisement Price. The Tribunal determines the premium to be paid at £26,100 as per the attached valuation.

16. Terms of the Lease. The new lease is approved subject to the premium of £26,100 being inserted together with the correct expiry date: 31 December 2177.

4

[NAME]

7 January 2025

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 (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.

[ADDRESS] [POSTCODE] Valuation date 18 September 2023 Lease 99 years from 1 January 1989 rent passing £75 pa, increasing to £100 from 1 January 2055 for remainder of term Capitalisation rate 7.5% Deferment rate 5% Landlord's present interest Ground rent 75 YP 31.3 years at 7.5% 10.3685 £778 Ground rent 100 YP 33 years at 7.5% 10.5419 x PV for 31.3 years 0.101063 1.065396 £107 Reversion to freehold 246,465 Deferred 64.3 years at 5% 0.043415 £10,700 £11,584 less proposed interest 244,000 Deferred 154.3 years at 5% 0.00078 190 Diminution in Landlord's interest £11,394 Marriage Value Proposed interests landlord £190 Extended lease 244,000 £244,190 less Present Interests landlord £11,584 Exisitng lease £203,235 £214,819 Marriage Value £29,371 50% marriage value £14,685 £26,079 Premium payable £26,100