1) UNKNOWN 2) TIDMARSH ESTATE LIMITED 3) UNKNOWN v LONDON BOROUGH OF ISLINGTON ACQ/79/1999
[1]This is a reference to determine the amount of compensation payable for the compulsory acquisition, in 1978, of a house in poor repair. There are three legal estates to be considered in determining the claim.(1) The freehold.(2) The head–leasehold interest – vested in Tidmarsh Estate Limited, and(3) The sub-leasehold interest. The acquiring authority has been unable to trace the owner of interests (1) and (3). Tidmarsh Estate Limited has confirmed it seeks no compensation.[2]This reference (which is a consolidation of references ACQ/79,80 and 81/1999) has been determined without an oral hearing under rule 27 of the Lands Tribunal Rules 1996. I have received an expert report and, following an order of this Tribunal, a supplementary report prepared by Robert James Heryet ARICS, a senior surveyor within the Valuation Division of the Finance and Property Services Department of the London Borough of Islington (“the Council”), dealing with the factual background and valuations. I have also received extensive copy documentation from the Council’s Law and Public Services Department together with a chronology of the steps the Council has taken to trace the unknown owners.[3]From this information I find that 88 Kingsdown Road, London, N.19 (“the subject property”) is a two-storey mid-terrace brick and slated dwelling house with back addition dating from around 1880. The accommodation at the date of the compulsory acquisition comprised three rooms at ground floor and three at first, with no bathroom and only an outside w.c. The house is situated in a residential side-street off the Holloway Road in north London, and is conveniently situated for local facilities.[4]Following concerns regarding the condition of the property, the Council made a Closing Order under s.17(1) of the Housing Act 1957 on 11 August 1976. The requisite repairs (which are believed to have been estimated to cost £4,250) not being effected, the Council resolved to acquire it and made the London Borough of Islington (88 Kingsdown Road – Part V) Compulsory Purchase Order 1977 which was confirmed by the Secretary of State on 30 January 1978. Notice to Treat and Notice of Entry were served, and possession was taken on 21 April 1978 (the Valuation Date). The property was subsequently modernised by the Council, added to its housing stock and let to Council tenants.[5]The Council’s enquiries in connection with the proposed compulsory acquisition revealed the freehold interest to be subject to a head-lease dated 18 February 1851 for a term of 300 years from 25 December 1850 at a rental of £3.15 per annum with no provision for rent reviews. The lease was for a large number of properties, of which the subject formed one. All were subject to the same annual rent. There was also an under-lease, but a copy of this has not been traced. It is believed to have been granted on 29 September 1885 for 300 years from 25 March 1850. This latter date does not accord with the date of the head-lease (being earlier). Following an application to this Tribunal it was ordered that in the absence of further information, for assessing the value of the sublease, it should be assumed that the sublease mirrored the head-lease in terms, but expired 3 days prior. 3[6]In its attempts to trace the owners of the various interests, the Council undertook a search with the Harrow and District Land Registry. The freehold was not registered, but the leasehold interests were. The Council established contact with the head-lessee, Tidmarsh Estate Limited which offered assistance in respect of tracing both the freeholders and the sub-lessees, and confirmed that it would be making no claim for compensation itself. Despite extensive correspondence with solicitors who had previously acted for the believed freeholders, attempts to contact the parties met with no response. The Council also contacted the agents, Donaldson & Son of Hornsey Road N.19 who were believed to have acted for the sub-lessee, one Peter Edwards, but they were unable to assist in tracing his whereabouts, having ceased to act on 3 January 1977.[7]Notices pursuant to s16 of the Local Government (Miscellaneous Provisions) Act 1976 were served upon all the relevant parties in September 1977. Following permission being obtained from the Department of the Environment, the Council served notices in connection with the proposed Compulsory Purchase Order in the manner prescribed under para19(4) Schedule 1 of the Acquisition of Land Act 1946 in October 1977, it having been accepted that reasonable inquiry had been made to ascertain the names and whereabouts of any persons having a statutory interest in the subject property. Notices were also published in the local newspaper, and upon the property. Notice of confirmation of the CPO were served and advertised in January 1978 with Notice of Entry served on 4 April 1978, possession being taken on 21 April 1978.[8]Subsequent attempts were made to contact the parties, in connection with the matter of compensation but no response was received, hence this Notice of Reference.[9]Following an Order made by this Tribunal resulting from the lack of information regarding the sub-lease, the Council’s valuer has assumed the sub-leasehold to mirror the head-lease in terms, except that is deemed to expire 3 days before the expiry of the head-lease.[10]Mr. Heryet is a chartered surveyor, and is employed as a Senior Surveyor in the Valuation Division of the Finance and Property Services Department of the London Borough of Islington. Although not having dealt with the compulsory acquisition, he was active in the London residential market at the relevant time and, having inspected the subject property in December 1999 and considered the Council’s file of papers, is familiar with it and the background to this claim.[11]In preparing his valuations, Mr. Heryet took into account the Council’s officer’s report on making the Closing Order in 1976 estimating that a figure in the region of £4,250 would be required to be expended to bring the unit back into a satisfactory state of repair for use as a single family dwelling. Allowing for inflation to the Valuation Date of 21 April 1978, he assumed £5,000 to be the appropriate expenditure figure at that time. He also produced a list of 12 comparable freehold transactions, all connected with compulsory acquisition, on properties within the vicinity of the subject property. 4[12]Mr. Heryet’s valuation of the freehold, on a term and reversion basis (ground rent of £3.15 pa receivable for 170 years – YP in perpetuity at 14 per cent) gave a figure of £22.49 which he ‘rounded’ to £50. This accords with the unconditional offer that the Council made to the freeholders’ solicitors in April 1987.[13]The valuation of the head-leasehold interest based upon the rent believed to have been receivable from the sub-lessee of £5.25 pa less the rent paid to the freeholder of £3.15 pa (YP in perpetuity at 14.5 per cent) amounted to £14.47. This was again rounded to £50.[14]The valuation of the sub-leasehold interest, on the basis of the comparable evidence gave a figure, assuming the property to be in satisfactory repair, of £11,000 from which Mr. Heryet deducted the £5,000 estimated cost of repairs to leave a value of £6,000.[15]On the basis of the evidence and copy documentation submitted by the acquiring authority, I am satisfied that it has taken all reasonable steps to trace the owners of the freehold and sub- leasehold estates. I also note that the head-lessee, Tidmarsh Estate Limited seeks no compensation for its interest. However, I accept Mr. Heryet’s valuations of all three interests and therefore determine that the compensation payable for the compulsory acquisition of the freehold interest in 88 Kingsdown Road, London N19 shall be £50 in respect of the freehold, £50 in respect of the head-leasehold and £5,000 relating to the sub-leasehold interests. DATED 8 January 2001 (Signed) P R Francis FRICS