Mr R Waterhouse BSc (Hons) LLMIn Person for the ApplicantMissing Landlord Sections 26 and 27 of the Leasehold for the RespondentDate 6 April 2022Property: CR0 2UFType of application: Reform, Housing and Urban Development Act 1993 Mr R Waterhouse BSc (Hons) LLM
DECISION
This has been a remote paper determination, which has been consented to by the parties. A face-to-face hearing was not held because it was not practicable and no one requested same. The documents the Tribunal were referred to were in a bundle of some 174 pages. Summary of the tribunal’s decision (1) The appropriate premium payable for the collective enfranchisement is £55,200. (Fifty-five thousand and two hundred pounds) Background[1]This is an application made by the applicant qualifying tenants pursuant to section 26 and 27 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the premium to be paid for the collective enfranchisement of 5 Kidderminister Road, Croydon, Surrey, CR0 2UF (the “property”) where the Landlord cannot be found. The issues[2]In the absence of the Landlord there are no matters agreed. The applicants have submitted a valuation report prepared by Andrew Pridell Associates(a) The subject property is a semidetached Victorian building over two floors, subsequently converted into two self-contained flats. Construction is traditional brick elevation and butterfly roof. The accommodation comprises ground floor entrance hall, servicing both flats. For Flat 1, 67.1 m 2, there is an entrance hall, lounge, two double bedrooms, a kitchen, bathroom with WC. Outside a section of rear garden and communal parking area. For flat 2, 71.24 m2, again two double bedrooms, lounge, kitchen and bathroom with WC. Outside a section of rear garden and communal parking.(b) The valuation date is 31st January 2022.(c) Details of the tenants’ leasehold interests: Flat 1 and Flat 2 comprise separate leases with identical terms. These are, 99 years from 29th September 1988, ground rent from 1988 to 2021 £75 pa, from 2021-2054 £150 pa, from 2054-2087 £250 pa. The tribunal regards these matters as uncontroversial and they are supported by documents in the bundle. The tribunal will consider the evidence on the following matters:(d) Capitalisation of ground rent:(e) Deferment rate:(f) Freehold value(g) Development hope value. Nil(h) The premium payable. The hearing[5]The case was dealt with on the papers on 6th April 2022 with the necessary documents provided in a bundle by the Applicant’s representative.[6]The tribunal was not asked to inspect the property and the tribunal did not consider it necessary to carry out a physical inspection to make its determination.[7]The applicant relied upon the expert report and valuation of Paul Martin of Andrew Pridell Associates dated 9th March 2022. Capitalisation rate[8]Paul Martin considers that capitalisation rates 6.5% are normal. The rent is modest and reviews are at 33 years apart. The tribunal’s determination[9]The tribunal determines that the rate to be used is 6.5%. Reasons for the tribunal’s determination[10]The tribunal notes that a rate of 6.5% has been used in Paul Martin’s experience and in the absence of any specific evidence to show that this should be varied in this case the tribunal will adopt this rate. Deferment rate[11]Paul Martin applies the Sportelli rate of 5% The tribunal’s determination[12]The tribunal determines that 5% is appropriate as the deferment rate. Reasons for the tribunal’s determination[13]The tribunal sees no reason to depart from the Sportelli rate. Freehold value[14]Paul Martin values the freehold interest in the ground floor flat, flat no 1 as £ 277,750, the first-floor flat no 2 at £267,500. The tribunal’s determination[15]The tribunal determines that the reversionary value of the freehold interest in the ground floor flat no 1 as £277,750, and for the first-floor flat no 2 as £277,750. Reasons for the tribunal’s determination[16]The comparable evidence represented in the report supports these figures. Development hope value[17]The tribunal determines that there is no development hope value to be included in the calculation. Reasons for the tribunal’s decision[18]The property is fully utilised by the subject flat and there is no development potential. Appurtenant land[19]A nominal figure of £50.00 was added for appurtenant land. Reasons for the tribunal’s decision[21]The nominal figure is accepted by the tribunal. The premium[20]The tribunal determines the appropriate premium to be £55,200.00[21]A copy of the valuation is annexed to this decision. Richard Waterhouse Name: Mr R Waterhouse Valuer Chair 6th April 2022 ANNEX – 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 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 to 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