In the end…an excellent result was reached for my client.

Although it took over 40 hours to negotiate, my client ended up exactly within less than 1% of where I initially advised prior to serving notice for an extended 90 year lease and prior to the Upper Tribunal’s decision in Mundy which made the whole negotiation more complex.

Although a lot of time was spent initially in persuading the landlord’s valuer to put aside his prejudice that the subject building was simply the best in the area and that any other flat in a nearby building was not relevant. His view was one should not look to similar sized small studio / 1 bedroom flats but other (albeit far larger – at least 3x size) 3 bedroom family flats (even including under ground parking – an amenity which the subject flat did not enjoy) in the same building sold on extended leases as comparable evidence.

Finally common sense prevailed with the landlord’s valuer accepting that evidence of similar sized studio / small one bedroom long lease sales should be adopted to reach the (lower) future extended lease value although he would not accept evidence of similar sized existing lease sales (where there were at least 7 sales both before and after the valuation date) providing a reasonable deduction for the right to the long lease was allowed for – should be adopted to reach the existing lease value in preference to adopting the Gerald Eve 1996 graph of relativity per Mundy.

Mundy of course directed that the preferred default position is not to use graphs of relativity if there is actual evidence of similar lease length sales.

The result ended up with the landlord’s valuer accepting a premium over 13.5% lower than the minimum premium he advised his client to accept prior to serving the s45 counter-notice (& prior to Mundy being handed down.)

The paradox is that Gerald Eve released their updated 2016 [but in effect 2017 –  as the updated graph was released at 18:18 on 23rd December in effect the last working day for many before returning to work after the Christmas / New Year holiday] graph of relativity which if adopted would have given a result about 1.43% lower than the landlord’s valuers original settlement premium…but then this would have led to a huge further argument best left for another day as this was not the flat to be ‘test pilot’ on this thorny issue!