Lease Extension in London - Leasehold Valuation Decision - London

The leasehold owners hold the premises pursuant to a lease dated 26h July 1991, which granted them a term of 99 years from 1st January 1990. By a lease extension notice dated 19th October 2005 the leasehold owners served on the landlord a notice seeking a lease extension pursuant to Part II of the Leasehold Reform, Housing and Urban Development Act 1993. The price for the lease extension premium was stated to be £1, 000.

In a counter notice dated 3rd January 2006 the landlord accepted the leasehold owners' entitlement to a lease extension. It disputed the premium payable and made a counter proposal that the premium be £2, 680. The landlord also sought to include a term in the new lease that a notice fee be payable of not less than £75 plus VAT on each change of leasehold owner.

By an application received by the Leasehold Valuation Tribunal on 16th March 2006 the leaseholders applied for a lease extension. The Leasehold Valuation Tribunal gave directions on 6th June 2006.

On 15th September 2006 the Lands Tribunal delivered its decision in Earl Cadogan v Sportelli. LRA/50/2005.

At the lease extension hearing the leasehold owners representative accepted the figure in the landlord's counter notice of £2, 680. Mr Evans, after taking instructions, agreed the premium at that figure.

The general rule in the Leasehold Valuation Tribunal is that no orders for costs are made. Paragraph 10(1) and (2)(b) of Schedule 12 to the Commonhold and
Leasehold Reform Act 2002, however, provides that the Leasehold Valuation Tribunal may make an order for costs against a party, limited to £500, in circumstances
where the party "has, in the opinion of the leasehold valuation tribunal, acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the proceedings. The landlord submitted that the leasehold owners here had acted unreasonably, so that the Leasehold Valuation Tribunal had the power to award costs. The Leasehold Valuation Tribunal Agreed.