We were recently instructed by our client, the owner of the Freehold interest in a mixed-use property in Cornwall, to provide advice on the premium payable in respect of the statutory Sale following our valuation.
The Leasehold Reform Act 1967 gives tenants of houses the right to acquire the freehold interest. The right to buy the freehold, and any intermediate leasehold interest, without the landlord’s agreement is called enfranchisement.
The freehold interest is subject to a 99 year lease from the 1920’s and while the property is mixed-use, comprising retail and residential accommodation, is reasonably considered a house for the purpose of the Act.
Having instructed a solicitor, who confirmed the correct valuation basis, we provided our client with valuation advice under Sections 9 (1A) and 9 (1C) of the Leasehold Reform Act 1967. This valuation basis assumes the landlord will gain possession of the property at lease expiry and, as there are less than 80 years left to run on the lease, recognises the leaseholder’s special interest in the purchase, which is applied as marriage value. Several calculations make up the premium payable under this valuation basis, which is subject to deferment and capitalisation rates. For this reason, it is important to employ a surveyor with experience in this area of valuation, as these rates have been discussed and some agreed in courts.
Following our initial advice and the case having escalated, we were subsequently instructed to represent at Tribunal. Following the Directions of the Tribunal, we exchanged valuations with the Tenant’s representatives, prepared and issued our Expert report and attempted to narrow the issues in dispute, to reach agreement on the premium payable.
Our experienced team is ready to assist with unparalleled regional advice.
