148A Herga Road, Harrow HA3 5AT LON/00AQ/OLR/2022/0558
DECISION
Summary of the tribunal’s decision The Tribunal has made the following determinations pursuant to section 51 of the Leasehold Reform Housing and Urban Development Act 1993 (“the Act”) and pursuant to paragraph 4 of the order dated 20 June 2022 of Deputy District Judge Evans:(a) The appropriate terms of acquisition are those which are set out in paragraphs (b) and (c) of this order.(b) The Tribunal approves the form of lease attached to this order (with the changes indicated thereon and highlighted in yellow) for the purpose of giving effect to the relevant terms of acquisition(c) The Tribunal determines that: (i) The premium payable in accordance with Schedule 13 of the Act is the sum of £35,550.00. (ii) The amount of £55 is due to the grantor from the Applicant by way of outstanding ground rent.REASONS
[1]The Property is a two bedroom self-contained upper maisonette in a two storey mid-terraced converted house.[2]The Respondent is the registered freehold proprietor of the said house under title number NGL1987.[3]By a lease dated 12 July 1982, the Property was let by the Respondent to himself and Deborah Alexander for a term of 99 years commencing on 25 March 1982. The said lease was registered on 16 August 1982 at HM Land Registry under title number NGL430650.[4]The lease was assigned to the Applicant on 29 July 2011 and she was registered as leasehold proprietor on 7 September 2011.[5]On 24 February 2021, the Applicant served a notice under section 42 of the Act on the Respondent by sending it to the Property address, which is the address given by the Respondent as his address on the register at HM Land Registry.[6]Pursuant to the provisions of the Act, the notice requested a new lease of 189 years from 25 March 1982 at a peppercorn rent and otherwise on the same terms as the existing lease, for a proposed premium of £25,600 subject to section 57 of the Act.[7]The deadline for a counter-notice was 30 April 2021.[8]The Respondent did not serve a counter-notice on time or at all.[9]The Applicant commenced proceedings in the county court on 2 November 2021 under section 48 of the Act seeking a determination and vesting order for a new lease.[10]The Respondent has not responded to or participated in the county court proceedings.[11]By order of Deputy District Judge Evans dated 20 June 2022, the county court ordered that the existing lease should be surrendered and a new lease granted and made a vesting order to take effect after the terms of acquisition have been determined by this Tribunal.[12]The said county court order referred the matter to this Tribunal for the purpose of carrying out the following:a. Determine the appropriate terms of acquisitionb. Approve a form of new lease which contains such provisions as may be approved for the purpose of giving effect to the relevant terms of acquisition; andc. Determine the following amounts: i. The premium payable in accordance with Schedule 13 to the Act; and ii. Any amounts or estimated amounts as being, at the time of execution of the lease, due to the grantor from the Applicant (whether due under or in respect of the Claimant’s lease or in respect of any agreement collateral thereto)[13]In response to the directions made by the Tribunal on 21 July 2022, the Applicant has obtained an updated valuation report, has provided a draft new lease and has answered questions posed by the Tribunal. The Applicant has also compiled all of the above into a bundle which I have used for the purposes of making this decision. Terms of acquisition[14]The terms of acquisition shall be on the basis of the draft lease which I have approved and attached to this order. Draft lease[15]I have reviewed the draft lease which has been supplied by the Applicant. I have approved its terms save for the following: i. I have crossed through the premium proposed by the Applicant (£25,600) in its section 42 notice and replaced it with the premium which I have determined (£35,550) ii. I have crossed through the part of the recital which states that the landlord has agreed to the grant of the new lease, because that does not reflect the true position.[16]I have made those changes on the attached draft lease and I have highlighted the changes in yellow for convenience of reading. The crossed-through sections and yellow highlighting should be removed before the lease is prepared for its final engrossment and execution. Premium[17]I have reviewed the valuation report of Ian Andrew Rennie BSc FRICS which is dated 25 August 2022 and is based on inspections which took place on 25 January 2021 and 24 August 2022. I have not inspected the Property nor have I inspected any of the comparable properties listed by Mr Rennie.[18]Mr Rennie has applied a 6% rate for capitalising ground rent and a 5% deferment rate having regard to the Sportelli decision. He has valued the vacant possession value of the Property with an extended lease in the sum of £264,928.[19]In order to calculate marriage value, he determined the unenfranchiseable relativity at 77.9% to produce a short lease value of £208,464. The resulting marriage value is calculated at £41,830.[20]He has made a further deduction for the value of the benefit of the Act in the sum of £12,500.[21]As a result of all of the above, the valuer has valued the premium in the sum of £35,549.[22]I agree with the opinion of the valuer and I therefore determine the premium in the sum of £35,550 (rounding up slightly). Additional sums payable[23]In response to questions from the Tribunal about whether there are any outstanding ground rent or service charges arrears, the Applicant has made a statement which is included in the bundle and which states as follows: i. No ground rent has been demanded or paid to the landlord ii. No other amounts (eg service charges) have been demanded or paid to the landlord.[24]I accept the evidence of the Applicant. In relation to service charges, clause 2(9) of the existing lease requires the Applicant to pay a designated share of the cost of certain specified works. There is no provision for any fixed or estimated service charges on account. There is no evidence that any expenses have been incurred or demanded. There is therefore no evidence that there are any service charges outstanding.[25]In relation to ground rent, clause 1 the existing lease reserves an annual ground rent of £5 “…to be paid by equal yearly instalments in advance on the Twentyfourth day of June in every year without deduction…” and clause 2(1) contains a tenant’s covenant to make those payments. There is no requirement in the lease for ground rent to be demanded. The Applicant’s evidence is that she has never paid ground rent. That means that the ground rent which was due on 24 June 2011 (after the Applicant purchased the leasehold title) up to the ground rent which was due on 24 June 2022 are all still due to the Respondent. I anticipate that the Applicant might say that since the landlord is missing, she has had nowhere to pay that sum. My finding however is not a criticism of the Applicant; it is simply a strict assessment of what is owing for the purposes of making the determination which has been referred to this Tribunal by the court.[26]I therefore find that the sum of £55 (being 11 yearly payments of £5 ground rent) represents the sum which is due to the Respondent for the purposes of the county court order. Name: Judge Timothy Cowen Date: 12 September 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).