Jonathan Wilson and Ingrid ChellembronApplicantNoel Clarke (Missing)Respondent
Before
Judge ShepherdKevin Ridgeway MRICSTolhurst Fisher LLP for the ApplicantNA Section 50 and 51 of the Leasehold for the RespondentVenue the papersDate 12 January 2022Property: Tottenham, N15 3PS Jonathan Wilson and IngridType of application: Reform, Housing and Urban Development Act 1993 Judge Shepherd
DECISION
Summary of the tribunal’s decision The appropriate premium payable for the new lease is £38060. Background[1]This is an application made by the applicant leaseholders pursuant to section 50 and 51 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the premium to be paid for the grant of a new lease of Ground floor flat 60 Stanmore Road, Tottenham, N153PS (the “premises”).[2]On 1st November 2021 DDJ Lucarotti at Edmonton County Court made an order pursuant to s. 50 of the Act to the effect that the Applicant was entitled to a new lease. The freeholder landlord is missing. The case was transferred to the Tribunal to determine the value and terms of the new lease. The property[3]The property comprises a one bedroom ground floor flat.[4]The Tribunal are familiar with the location which is increasingly a sought after part of London. It lies to the East of Green Lanes near Downhills Park. Green Lanes like many parts of London is being gradually gentrified as a younger more affluent population moves in. The tribunal’s determination[5]The tribunal determines that the value of the new leasehold at the date of the application was £38060. Reasons for the tribunal’s determination[6]The right to a new lease is conferred by Ch 2 of Pt 1 of the 1993 Act. By exercising the right the tenant acquires a new lease of the flat in substitution for his or her existing lease for a term expiring 90 years after the term date at a peppercorn rent ( s.56(1)). The tenant pays a premium which compensates the landlord for the loss of the remainder of the term. In the present case the landlord is missing and the procedure pursuant to ss50 and 51 of the Act has been followed.[7]The premium for the new lease is calculated in accordance with Sch 13, para 2 of the Act and is the aggregate of the following figures :(a) The diminution in value of the landlord’s interest in the flat;(b) The landlord’s share of the marriage value;(c) Any amount of compensation payable.[8]The calculation by Mike Stapleton FRICS is broadly acceptable but The Tribunal has reflected a one percent increase in value of the freehold vacant possession value over the long leasehold value, which is in line with common practice.[9]A calculation carried out by the Tribunal is attached as a schedule to this determination. The premium[10]The tribunal determines the appropriate premium to be £38060 A copy of its valuation calculation is annexed to this decision. Name: Judge Shepherd Date: 12th January 2022 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). CASE REFERENCE LON/00AC/OLR/2014/0106 First-tier Tribunal Property Chamber (Residential Property) Valuation under Schedule 13 of the Leasehold Reform Housing and Urban Development Act 1993 Premium payable for an extended leasehold Interest in [Property] Valuation date: [Date] Appendix: Valuation setting out the tribunal’s calculations Valuation for lease extension 60 Stanmore Road Valuation Date 26/05/2021 Lease Commencement 25/03/1989 Lease Term 99.00 years Expiry Date 24/03/2088 Unexpired Term 66.83 years Long Lease value £338,000 Freehold VP value £341,380 +1% long lease value Term 1 Term 2 Term 3 Ground rent £100.00£150.00£200.00 Reversion years 0.83 33.00 34.00 Capitalisation rate 6% Deferment rate 5% Compensation £0.00 Relativity 82.41% Diminution of Landlord's interest Ground rent £100 YP 0.83 yrs @ 6.00% 0.786872038 £79 Rent Review 1 £150 YP 33.00 yrs @ 6.00% 14.23022961 PV of £1 0.83 yrs @ 6.00% 0.952787678 £2,034 Rent Review2 £200 YP 34.00 yrs @ 6.00% 14.36814114 PV of £1 33.83 yrs @ 6.00% 0.139284432 £400 Reversion to VP value £341,380 PV 66.83 yrs @ 5.00% 0.03836358 £13,097 Value existing freehold £15,609 L/lord's interest on reversion of new lease FH VP £341,380 PV 156.83 yrs @ 5.00% 0.00047521 -£162£15,447 Landlord's share of Marriage Value Val. Tenant's interest new long lease £338,000 Val. l/lord's interest after reversion of new lease £162£338,162 Less Val. tenant's interest existing lease Relativity 82.41% £281,331 Val. l/lord's interest existing lease £15,609£296,941£41,222 Marriage Value at 50% £20,611 Compensation £0 PREMIUM £36,058 Say £36,060