It has taken over a year to get over ‘the line’ but settlement has at last been reached with Grosvenor in a complicated enfranchisement claim.
5 tenants participated out of 9 flats in all – the 4 non-participating units held on short leases of less than 6 years remaining.
The leasing structure was complicated in that 2 of the participating long leases were held on approx.111 year unexpired overriding leases whereas the other 3 participating flats were held on s56 extended leases of around 96 years.
In order to “cleanse” the leasing structure, the 2 overriding lessees had to first serve notice (in effect) on themselves to seek 90 year lease extensions on the back of their approx. 6 year remaining ‘old’ short leases in order to buy out their existing ground rent liability to the intermediate landlord.
A satisfactory overall premium was secured not only with regards to the overall freehold vacant possession values but also based on the old Gerald Eve 1996 graph of relativity in respect of the sub 6 year non-participating leases as the May 2016 valuation date preceded the Mundy decision and as a result, the replaced Gerald Eve 2016 graph could not be relied upon at all.
There had also been a change in policy at the Grosvenor end in that Gerald Eve will only recommend formal agreement to the overall premium reached in negotiation once all terms have been agreed in respect of the freehold transfer and plan. This had the very frustrating effect of delaying formal agreement until the lawyers had agreed everything and it was only the threat of the FtT hearing finally catching everyone up, was the ‘finish line’ passed the day before the hearing was scheduled to be heard.
Phew!