Automated Summary
Key Facts
The case involves Alvin Jacobs and Denise Solden (Applicants) seeking a lease extension for their 99-year underlease of 19 Oakdene Vale, Leeds, from the freeholder Wallace Partnership Reversionary Group Holdings Limited and intermediate landlord Shadwell Mead Management Company Limited. The Tribunal determined the premium payable as £250 to the First Respondent and £18,340 to the Second Respondent under Section 48(1) of the Leasehold Reform, Housing & Urban Development Act 1993. The decision was made on 23 March 2021 with determination dated 1 April 2021.
Issues
- The Tribunal had to resolve the total premium amount and how it should be divided between the First Respondent (freeholder) and Second Respondent (intermediate leaseholder), considering their respective interests and the 'no Act world' allowance.
- Experts disagreed on the relativity percentage for the Property's value. The Applicants' expert cited 90%, while the Respondent's expert argued for 69.3%, based on different comparable sales and market adjustments.
- The parties disputed whether the deferment rate should be 5.5% (as argued by the Applicants' expert) or 5% (the standard 'Sportelli deferment rate'), reflecting market differences between London and local areas.
Holdings
- 5 Oakdene Vale and 26 Oakdene Vale were excluded as safe comparables due to significant differences from the subject property.
- The total premium for both respondents' interests was set at £18,590, with £250 allocated to the First Respondent and £18,340 to the Second Respondent.
- The Tribunal determined the Property's extended lease value at £145,000 (excluding tenant's improvements) and short lease value at £120,000 using an 83% relativity figure.
- Flat 20 Oakdene Vale (one-bedroom) was excluded from consideration due to the availability of local two-bedroom flats as comparables.
- The Tribunal found no evidence to authorise a departure from the 5% deferment rate applied nationally in the Sportelli decision.
Remedies
- The Applicants are required to pay a premium of £250 to the First Respondent, Wallace Partnership Reversionary Group Holdings Limited, as part of the lease extension determination under section 48(1) of the Leasehold Reform, Housing & Urban Development Act 1993.
- The Applicants are required to pay a premium of £18,340 to the Second Respondent, Shadwell Mead Management Company Limited, for the lease extension of the Property under section 48(1) of the Leasehold Reform, Housing & Urban Development Act 1993.
Monetary Damages
18590.00
Legal Principles
The Tribunal applied the 5% deferment rate as per the Sportelli case, rejecting a departure from this national standard for flats. It also considered the valuation methodology under the Leasehold Reform, Housing & Urban Development Act 1993 (s 48(1)), including relativity adjustments for comparable properties and the freeholder's compensation. The decision emphasized adherence to statutory frameworks and precedent in determining lease extension premiums.
Precedent Name
Sportelli
Cited Statute
Leasehold Reform, Housing and Urban Development Act 1993
Judge Name
- I D Jefferson TD BA BSc FRICS
- A M Davies, LLB
Passage Text
- Neither 5 Oakdene Vale nor 26 Oakdene Vale are considered to be safe comparables, given their respective differences to the Property.
- There is no evidence to authorise the Tribunal to depart from the 5% deferment rate applied to flats nationally by the decision in Sportelli.
- The total premium for both Respondents' interests is £18,590.