It is so important to not only do one’s homework in fully researching market values and the legal titles and qualification rules before serving notice but also to keep a beady eye out for any error the other side may make in order to take advantage of the situation for your client’s benefit.
I was recently involved as valuer in a complicated enfranchisement in SW1 where the titles were not straightforward – a mix of already 90 year extended long leases on three flats and two garage spaces and two garage leases held in sub 5 year on AST’s.
With careful legal advice from Damian Greenish (Damian@greenishconsulting.com), my client was able to collectively enfranchise the entire building as she satisfied entirely the qualifying criteria alone without the need to involve any other qualifying leaseholder as co-participator.
My client’s s13 notice claimed the freehold for the ‘specified premises’ of the whole property – a building of 3 flats and six garages together with the garage forecourt – where two separate sums were offered apportioned between the freehold and intermediate leasehold interests.
The landlord’s s21 counter-notice, in accepting my client’s right to the freehold, reverted with a quoting offer split into 3 amounts being namely two amounts for the ‘specified premises’ (where two related to the building alone apportioned between freehold and intermediate leasehold interests) and a third amount for the ‘additional freehold as premium payable for freehold of Appurtenant Land (Courtyard).’
As the amounts relating to the building alone came to approx. £100,000 less than the amount offered on the s13 notice for the whole property – she accepted the Landlord’s counter offers for the ‘specified premises’ leaving just the value of the Courtyard to be argued over for which the landlord claimed £750,000. A piece of land where it is arguable that there is little value attributable as we are required to value it on the basis that the building to which it is attached (and incidentally over which there was a roof terrace of one of the participating flats) is not to be taken into account.
This argument needs to be looked at in two distinct ways – a) from that of the building where the freeholder (para 3 (1A)(ba) and the leasehold owner (para 3 (1A) (c) are excluded from the market and then similarly b) the courtyard under para 11 of part IV of schedule 6 – the owner of both the freehold and leasehold is added to the list of excluded parties in consequence of para 11(4). So how can you value this small piece of land if you cannot take into account either interest.What is its worth with no access to the building to which it related let alone an ability to develop before taking into account rights of way over the courtyard in respect of the garages and adjacent store rooms?
The price for the collective freehold was settled that equated to a discount over just under 59% off the landlord’s final quoting premium and one very happy client joyous with a result beyond expectations.
Finally full credit too to Damian Greenish for his expert legal advice together with Michael Roskell and Anna Favre of Cripps Pemberton Greenish for their help in seeing through the transaction to completion which without our client’s huge support every step of the way, made the whole process extremely enjoyable and rewarding for all involved on her behalf.