First Tier Tribunal (property chamber) - confusion over acceptance of premium

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    First Tier Tribunal (property chamber) - confusion over acceptance of premium

    Hi all,

    I am one of 4 leaseholders in a property. 3 of us own a share of the freehold, via shares in a company that I run (in effect alone, and entirely inexperienced). The remaining leaseholder (who is not a freeholder) is selling his property, and has applied to the first tier tribunal for a lease extension after initial offers were well apart.

    According to the directions issued by, I was required to produce a draft lease for the applicant (or rather his solicitors) to review. I did this, and in the lease I stated that a premium of £21k would be payable.

    The next step in the directions was for the applicant to propose changes to the lease and return to me. They made a number of minor changes, but their proposed version of the lease left the premium at £21k.

    I agreed to all the applicant's changes, and remained happy with the premium. Therefore, I wrote back to both the tribunal and the applicant advising that we were in agreement on all matters, and requested from the Tribunal new directions on the next steps, as it seemed there was no judgement required on their part.

    The tribunal wrote back, advising that they would need to see a letter from the applicant confirming that all terms are agreed.

    I have since received a couple of emails from the applicant's solicitors suggesting that we exchange surveyors valuations. (As an side, I don't know why they're doing this as I have previously advised that we have not appointed any surveyors. In any event, they have shown themselves not to be trustworthy as they recently informed us that the purchaser of the property had agreed to pay a large outstanding maintenance charge for some major external works - this was of course news to the purchaser when I asked them to confirm).

    Question: Should the applicant's solicitors be bound by the details in the amended lease they sent to me (in particular the £21k figure)?

    I propose to respond to their messages only to question again whether they are happy with the contents of the lease they sent us.
    - If the response is in the affirmative, then the premium is surely agreed?
    - If the response is negative then can I ask the tribunal to find in my favour by default (they should in theory then send me another revised lease, but the deadline for this has long expired)?

    I think I've given all relevant information, but if not, please let me know. Any advice much appreciated.


    #2
    Hi, I fear you may have misthunk the statutory process based on what you say.

    Did you handle this lease extension application alone? If yes, why?

    The freeholder can charge legal costs and valuation cost back to the applicant under section 60. Not that I promote the ability to overcharge etc, but prudence is prudence.

    The process is well documented as to how to serve a landlord counter notice. You can Google it.

    You are now in the hands of the court (tribunal). They will decide the premium unless both sides concur that they have agreed. It would appear not.

    I would suggest you ought to have gone to a solicitor and got a valuation. It is possibly time to do that now. As I say, section 60 is your friend. But only for legitimate costs.
    Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

    Comment


      #3
      What is the value of the flat on the basis that the flat has a long lease and is in good order and the ground rent terms

      Where approximately is the property

      Comment


        #4
        It sounds like you don't have agreement (outside the act), therefore you will be going to tribunal. To do that without a surveyor's valuation (which you can charge for) is silly isn't it?

        Comment


          #5
          Well, yes, kudos to you for being reasonable. I said it was silly not to have a valuation.

          However, the other side aren't being reasonable, are they? Therefore you don't go into battle and leave your sword at home, thinking the other side won't bother bringing theirs.

          Comment


            #6
            "The tribunal wrote back, advising that they would need to see a letter from the applicant confirming that all terms are agreed."

            This is surely your problem? Posting on a forum in the hope that others will agree that said letter is unreasonable is hardly going to move matters forward for you.


            "S60 and charging the applicant leasehold costs is one thing, but I think my question stands regardless."

            Your question stands with whom? The tribunal?

            "Will the tribunal find in my favour?"

            "So £350k as a ballpark. ... But I don't understand how any of this relevant to the issue in hand."

            "The question is - what will the tribunal do - will they insist on the applicant honouring the lease they proposed or allow them to re-submit a new lease with a premium that they actually agree with?"

            Nobody here has a crystal ball. I have studied many premium disputes at Upper Tribunal as a good measurement of case law and i wouldn't venture a guess. Did you have look here?...

            http://landschamber.decisions.tribun...x/Default.aspx

            In a recent case I read, a freeholder handled her own appeal. She prepared a rather extraordinary level of valuation detail - more than the customary theology - all as a layperson. Whereas the tribunal did not say so explicitly, I think you could read between the lines that they were not impressed by the absence of a professional valuer.

            Relying on a "ballpark" figure is absurd. The lease extension caper requires that a semblance of 'science' is used, albeit a more theological theory of relativity than Einstein's.

            Are you a practicing valuer with expertise in this caper?

            I would check if the tribunal would be happy for you to now engage a valuer (post-submission to FTT that is) and recharge under section 60, but you ought to see a solicitor anyway.
            Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

            Comment


              #7
              Is the application for for "statutory 90 years extension at peppercorn ground rent ".?

              I don't think you can set the price for extension if there is application made to FTT. The valuation must be done by a surveyor .

              Comment


                #8
                Originally posted by MrSoffit View Post

                I would check if the tribunal would be happy for you to now engage a valuer (post-submission to FTT that is) and recharge under section 60, but you ought to see a solicitor anyway.
                I came across a recent Upper Tribunal ruling where it was determined that a landlord can recover the statutory costs recoverable on a house enfranchisement claim including the cost of a valuation even though the valuation was carried out after the tenant had applied to the First Tier Tribunal. I suspect that the same would apply in the matter of a lease extension. A link to the case is here:



                Comment


                  #9
                  Thanks for the replies.

                  I tried to delete the thread as the world can be a small place (but it seems that did not work), and didn't realise there were more replies.

                  The tenant's solicitors have insisted on me appointing a surveyor and will not provide information from their valuers to me. Are they allowed to do this? Mr Soffit's example suggests not.

                  (Rest assured) I ask not because I still have not appointed a surveyor, but because I think confirmation that one could provide oneself at the tribunal would make it clear that the costs incurred are in pursuance of the notice to agree a premium, rather than in connection with the tribunal. This is of issue because the tenant's solicitors are denying that the costs are recoverable due to them occurring after section 45.

                  Lorimer - to that end, your example of a ruling is extremely helpful as it sets out the case very well that the reasoning above makes no sense. Thank you.

                  Comment

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