United Kingdom Upper Tribunal (Lands Chamber)

UPPER TRIBUNAL (LANDS CHAMBER)

  UT Neutral citation number: [2012] UKUT 296 (LC)

UTLC Case Number: LRA/80/2012

 

 

 

 

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

 

LEASEHOLD ENFRANCHISEMENT – maisonette – premium – relativity – LVT granting permission to appeal on grounds that it failed to take proper account of LEASE graph of relativities – appeal allowed

 

 

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF A LEASEHOLD VALUTION TRIBUNAL FOR THE

MIDLAND RENT ASSESSMENT PANEL

BY

MIDLAND FREEHOLDS LIMITED

 

 

 

Re: 28 Mallaby Close

Shirley

Solihull

West Midlands

B90 2PW

 

 

 

Determination on written representations

 

By N J Rose FRICS

 

 

 

 

© CROWN COPYRIGHT 2012

The following case is referred to in this decision:

Re Coolrace Ltd and others’ Appeals [2012] 24 EG34

DECISION

Introduction

1.          This is an appeal by the freeholder, Midland Freeholds Ltd, against a decision by a Leasehold Valuation Tribunal of the Midland Rent Assessment Panel, determining the premium payable for the grant of an extended lease of a maisonette known as 28 Mallaby Close, Shirley, Solihull, West Midlands, B90 2PW pursuant to section 48 of the Leasehold Reform, Housing and Urban Development Act 1993 at £8,054.

2.          On 10 April 2012 the LVT granted permission to appeal against its decision for the following reasons:

“10. Since making the determination the Tribunal has received the benefit of guidance from the Upper Tribunal (Lands Chamber) in the decision of Coolrace Ltd.  (LRA/39/2011) and others dated 29 February 2012.

11. The Upper Tribunal found no evidence to support the argument that there were particular regional variations in relativity percentages (other than PCL) and that in the absence of more reliable evidence a composite graph of relativity compiled by the Leasehold Advisory Service (commonly referred to as “the Lease Graph”) is more representative of appropriate relativities.

12. It follows that in the present case the Tribunal failed to take proper account of the “Lease Graph” and the application to appeal is therefore allowed.”

3.          Re Coolrace Ltd and others’ appeals was reported on 16 June 2012 [2012] 24 EG 84. 

4.          The applicant leaseholder at the LVT hearing was Ms Diane J Thornton.  By letter dated 7 June 2012 Ms Thornton informed the Upper Tribunal that she did not wish to take part in the appeal.  On 17 July 2012 the President ordered that the appeal be allocated to me and determined on written representations.

5.          Mr Matthew Fell submitted brief representations in support of the appeal.  He produced a copy of the Lease Graph which showed that, for a lease with 62 years remaining, the appropriate relativity was 88%, and not 92% as determined by the LVT.  The effect on the LVT’s calculation of substituting the Lease Graph relativity was to increase the extended lease value from £135,000 to £140,909, with a resultant increase in the premium payable to £11,101.

6.          Mr Fell described himself at the LVT as an advocate, not an expert witness.  He has an interest in the outcome of the appeal, since he is a director of the appellant company.  Nevertheless, he has reduced his valuation below the figure which he put forward at the LVT, which was based on a relativity of 83%.  In view of the LVT’s reasons for granting permission to appeal, which I accept were correct, and in the absence of any other evidence on relativity, I accept Mr Fell’s valuation.  I determine that the premium payable for the extended lease of 28 Mallaby Close is £11,101 (Appendix 1).

Dated 21 August 2012

 

N J Rose FRICS

 

Appendix 1

 

28 Mallaby Close, Shirley, Solihull, West Midlands, B90 2PW

Determination by the Upper Tribunal of premium payable for lease extension

 

Term  -  agreed 892

Reversion

Extended lease value 140,909

PV £1 in 62 years @ 5.75% 0.0312332

Current freehold value 4,401 5,293

Marriage value

Current leasehold value (@ 88%) 124,000

Current freehold value 5293

(A) 129,293

Extended leasehold value 140,909

Future freehold value  0

(B) 140,909

Marriage value (B) – (A) 11,616 x 50%    5,808

Lease extension premium 11,101