Automated Summary
Key Facts
The tribunal determined the premium for a new 147.54-year lease at £49,601 for Mr A Dmitreiv's property at 7B The Market Place, Falloden Way, London NW11 6LB. The decision, made on 19 May 2021, resolved disputes on relativity (74.3%) and the premium, based on an existing lease value of £228,367 and an extended lease value of £304,315. Key agreed facts included a 54.604-year unexpired term, a peppercorn ground rent, and the property's size of 605 sq ft with no outside space.
Issues
- The Tribunal was asked to determine the relativity reflecting the existing leasehold and vacant possession value, which is a key factor in calculating the premium for the lease extension.
- The main issue was assessing the premium to be paid by the Applicant for the extended lease, considering the diminution in the landlord's interest and the marriage value.
Holdings
The Tribunal determined that the premium to be paid by the Applicant for an extended lease of the property is £49,601. This decision was based on accepting the Respondent's valuation approach, which included a relativity rate of 74.3%, adjustments for the property's condition, and comparables analysis. The Tribunal rejected the Applicant's valuation methods as untested and overly generous in allowances for improvements.
Remedies
The Tribunal determines that the premium to be paid by the Applicant for an extended lease of the property is £49,601 as shown on the attached valuation.
Legal Principles
The Tribunal applied Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 to determine the premium for a lease extension. This schedule outlines the valuation methodology for lease extensions, including calculation of diminution in the landlord's interest, marriage value (50% attributable to the landlord), and compensation for other losses. The legal framework required valuing the landlord's interest before and after the lease extension, with marriage value considered nil when the unexpired term exceeds 80 years.
Precedent Name
- Sloane Stanley v Mundy
- Mallory v Orchidbase Ltd
Cited Statute
- Leasehold Reform, Housing and Urban Development Act 1993
- Housing Act 1996
- Commonhold and Leasehold Reform Act 2002
Judge Name
F J Silverman
Passage Text
- The Tribunal considers that it would not be proportionate to inspect the subject property and was not asked by the parties to do so.
- The Tribunal determines that the premium to be paid by the Applicant for an extended lease of the property is £49,601 as shown on the attached valuation.
- The Tribunal accepts Mr Sharp's assessment of 74.3% as the correct relativity figure to be applied in this case.