Lease Extension in St Albans - Leasehold Valuation Decision 2000

The lease which was the subject of the lease extension related to a property known as 296 The Ridgeway. The lease was for a term of 99 years running from 25th December 1959 at a ground rent of £15 per annum payable for the whole of the term.

The leasehold owners and the freeholder were in agreement relating to a) The ground rent to be capitalised at 12%. b) The value of the present leasehold interest is £80, 000. c) Marriage value to be split 50%.

The matters in dispute between the freeholder and the leasehold owners were the lease extension Valuation date and the price to be paid for the lease extension and in particular the value of the extended leasehold interest. Finally, there was in issues as to costs.

The Leasehold Valuation Tribunal determined that the valuation date was 6thApril 2000, being the date on which the Landlord's Counter Notice was served under Section 45 of the Leasehold Reform, Housing and Urban Development Act 1993.

The leasehold owners believed that the effective date of Mr Slater's valuation was 27th  January 2000 and he did not consider that it was necessary for his figures to be altered following the Leasehold Valuation Tribunal's determination of the valuation date as 6th April 2000, the difference being some 10 weeks.

In valuing the reversion parties agreed that the capital value to be adopted was the value of the extended lease and not the value of the present lease which he had used in his valuation.

In valuing the present lease the leasehold owners representative used the evidence provided by the sale of 338 The Ridgeway, held on a similar lease and with similar accommodation to 296 The Ridgeway. The sale of 338 The Ridgeway was completed on 14th December 1999 and the price was £79, 950. This sale had been negotiated on 3 August 1999 and although the then lessee had served a notice to extend the lease on the lessor this notice was found to be invalid. Mr Slater concluded that the value of the present lease was £80, 000. d) In support of his valuation of the extended lease in the sum of £87, 500 the leasehold owners cited the sale of 337 The Ridgeway completed on 3rd December 1999 for 182, 000. This property was held on a lease with a term of 963 years unexpired and was in below average condition.

The cost of renovation was put at £5, 000 to give an adjusted value of £87, 000. Although a sale of 292 The Ridgeway had been agreed in December 1999 for £87, 250 the vendor had withdrawn. This maisonette was in similar condition to the subject property and there was 86 years unexpired in the lease term.

127 Hughenden Road being a maisonette with garage was sold for £87, 500 in January 2000 with 78 years unexpired in the lease term.

In arriving at his valuation of £87, 500 the leasehold owners representative confirmed that he had made allowance for Tenant's improvements.

The Leasehold Valuation Tribunal accepted the agreed capitalisation rate of 12% for the ground rent and the agreed value of £80, 000 for the present lease also the 50% split in the marriage value.

With regard to the value of the extended lease the Tribunal placed more reliance on the evidence of sales at 337 The Ridgeway and 127 Hughenden Road, rather than on 336 The Ridgeway and 129 Hughenden Road where the sales had taken place some time after the valuation date.

However the Leasehold Valuation Tribunal accepted that prices of maisonettes in this part of St Albans had been rising during 2000. The Leasehold owners valuation was based on a valuation date of 27th January 2000 as opposed to the Leasehold Valuation Tribunal's decision of 6th April i.e. a difference of some 10 weeks. No exact evidence of the extent of the rise in house prices during this 10 week period was forthcoming but taking into account the various points put forward by the parties the Leasehold Valuation Tribunal determined that the value of the extended lease as at 6th April 2000 was £90, 000. In reaching this decision the Tribunal noted that the Leasehold owners said that he had allowed for their improvements whereas the freeholder said that he had not so allowed.

The Tribunal determined that the sum payable for the Lease extension is £5, 122

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