Cadogan Estate, Chelsea
The Leasehold Reform team has been involved in a number of tribunal cases over the last few months, seeing an increase in demand for this type of service.
More recently, department head Jeremy Dharmasena, acted on behalf of the leaseholder of a two bedroom flat in a purpose built block on the Cadogan Estate, Chelsea to establish the premium payable for a 90 year lease extension. The flat had a lease of just under 3 years remaining and Jeremy disputed the freeholder’s valuation, giving evidence to support a lower premium. The matters in dispute were:
i) the freehold value
ii) the discount for the tenant ‘holding over’, where the lease had been purchased by a company
iii) whether ‘single rate’ or ‘dual rate’ valuation tables should apply in valuing the tenant’s existing lease in the marriage value calculation.
In respect of the first issue, the Tribunal did not favour aspect adjustments but did agree floor level adjustments. They chose only three out of five comparable transactions in the building put forward in evidence and determined a freehold value based on a rate of £1,570 psf, close to the figure contended by the freeholder.
On the second issue however, they agreed there was a small risk to the freeholder and awarded a 1.5% discount compared with the experts’ opinions at between 0.0% and 2.5%.
On the final issue, the Tribunal concluded the single rate should apply, which increased the value of the leaseholder’s interest and so reduced the overall premium.
Ultimately, the Tribunal concluded for a premium payable of £1,015,271 which compared with the freeholder’s figure of £1,041,800 and their initial counter-notice figure of £1,285,900.