LVT/0081/03/14: 41 Furzeland Drive, Neath

Y TRIBIWNLYS EIDDO PRESWYL RESIDENTIAL PROPERTY TRIBUNAL LEASEHOLD VALUATION TRIBUNAL Reference: LVT/0081/03/14 In the Matter of 41 Furzeland Drive, Bryncoch, Neath, SA10 7UG In the matter of an Application under the Leasehold Reform Act 1967 TRIBUNAL Timothy Walsh (Chairman) Ruth Thomas (Surveyor) Peter Tompkinson (Surveyor) APPLICANT Mr. Gary Frazer Aitchison RESPONDENT Unknown Owner of the Freehold REASONS FOR THE DECISION OF THE LEASEHOLD VALUATION TRIBUNAL Introduction 1. The Applicant, Mr. Gary Frazer Aitchison, is one of two registered proprietors of the leasehold interest in the property known as, and located at, 41 Furzeland Drive in Bryncoch Neath (“the Property”). The leasehold interest is registered at HM Land Registry under title number WA115929. The second registered proprietor is Mrs. Pamela Aitchison. 2. The Lease was dated 23 December 1970 and was for a term of 99 years from 25 March 1969 the original parties were Melville Gwyn Morgan (as landlord) and Glynne Jones (as tenant). It is apparent that this was what is generally known as a building lease under which, by clause 4(b), the original tenant covenanted to build a dwelling-house upon what was then plot number 7 on the Bryncoch Estate. By Clause 3 the rent under the Lease was a yearly rent of £20.00 payable by equal half-yearly instalments. There is no provision in the Lease for rent review. Page 1 of 19 3.Section 1 of the Leasehold Reform Act 1967 (“the Act”) confers on a tenant of a leasehold house a right to acquire on fair terms the freehold of the house and premises where certain conditions are met.Section 27 of the Act addresses the problem of enfranchisement where the landlord cannot be found. Specifically section 27(1) of the 1967 Act provides that: 27(1) Where a tenant of a house having a right under this Part of this Act to acquire the freehold is prevented from giving notice of his desire to have the freehold because the person to be served with the notice cannot be found, or his identity cannot be ascertained, then on an application made by the tenant the court may, subject to and in accordance with the provisions of this section, make such order as the court thinks fit with a view to the house and premises being vested in him, his executors, administrators or assigns for the like estate and on the like terms (so far as the circumstances permit) as if he had at the date of his application to the court given notice of his desire to have the freehold. 4. Both registered proprietors issued proceedings in the Swansea County Court on 7 February 2013. It is unnecessary to recount the detail of that claim save that we note that it refers to a valuation of the freehold reversion by Astleys Chartered Surveyors in the sum of £4,850, We were not presented with a copy of any such valuation however. 5. By order of District Judge J Garland Thomas the County Court determined that it was satisfied that all proper steps by way of advertisement and otherwise had been taken for the purpose of tracing the landlord and it was ordered that: 5.1 The Applicants were entitled pursuant to the provisions of section 1 and section 27(1) of the 1967 Act to have invested in them the freehold of the Property. 5.2 The terms upon which the Applicants were entitled to have freehold vested in them were to be determined by the Leasehold Valuation Tribunal as if the applicants had, as at 7 February 2013, given notice under section 1 of the 1967 Act including, in particular, the assessment of the appropriate sum pursuant to section 9 of the Act and the form of conveyance which is to contain such matters as it may be appropriate to include pursuant to section 27(3) of the 1967 Act. 6. By an application dated 14 February 2014, but received by the Tribunal on 11 March 2014, an application was made pursuant to section 21(1)(a) of the 1967 Act. By that section the Leasehold Valuation Tribunal is the tribunal with jurisdiction to determine the price payable under section 9(1) of the 1967 Act for a house and premises. Page 2 of 19 7. The application under section 21(1) was made in the name of Mr. Aitchison alone but that was evidently simply an oversight. Mr. and Mrs. Aitchison appeared at the hearing before us and their solicitor, Mr. Murphy, confirmed that this was a joint application. We indicated that we would accordingly proceed on that basis and as though Mrs. Aitchison’s name had also appeared in the application dated 4 February 2014. The character of the Property and the Valuation Evidence 8. We have had the benefit of a site visit and from our observations the Property can be described as follows. 9. It is a detached four bedroomed house of cavity wall construction built in the 1970s. The Property has a series of pitched concrete tiled roofs, rendered elevations and double glazed timber windows. 10. As originally constructed it is evident that the property built in accordance with the Lease terms was a three-bedroomed property. The first floor was extended during the 1980s shortly after the Applicants purchased the Property on 8 December 1978 (the title was first registered at HM Land Registry on 2 February 1979). A new conservatory has been erected to the rear elevation by the Applicants in more recent years. The extension and modifications to the Property carried out at that time and the conservatory have enhanced the appearance and quality of the accommodation. The Property occupies a relatively large “L” shaped plot. It is well presented both internally and externally. Space heating is provided by a gas fired boiler. 11. Finally, the Property is located in a quiet highly sought after residential area of Neath. Neath itself provides comprehensive facilities and is within easy reach both of Swansea and the M4 motorway. The Statutory Approach to Valuation 12. Where a tenant of a house has a right under Part I of the 1967 Act to acquire the freehold the price payable for the house is determined under section 9 of the Act. There are different Page 3 of 19 bases of calculation depending on the qualifying conditions under which the tenant has claimed the right to buy the freehold. 13. In the case of a house and premises with a rateable value which was not above £500 on 31 March 1990 the appropriate basis of valuation is generally under section 9(1) of the Act although, as Hague: Leasehold Enfranchisement (6th Ed.) explains at paragraph 9-02, that is not invariably the case. We proceed here on the basis that section 9(1) applies. At the hearing Mrs. Aitchison gave evidence that she had spoken with Welsh Water both the day before the hearing and again on the day that we heard the application. It was her evidence that she had been informed that the rateable value of the property was £218. 14. At the conclusion of the hearing we indicated that we would delay our decision in order to allow the Applicants to file confirmatory evidence of the rateable value and on 21 July 2014 Mr. Murphy forwarded to the tribunal an email from one T Parry at Dwr Cymru Welsh Water Customer Services, also dated 21 July 2014. That email relates that a rateable value of £218 was set by the District Valuation Office prior to 1990. 15. No evidence in relation to the historic rateable values was available. It seems probable that the rateable value that we were given was based on the 1 April 1973 rating lists. As this lease was dated 23 December 1970 we do not know whether “the appropriate day” for the purposes of the Act pre-dated 1 April 1973 nor, if so, what the rateable value would have been at that time although, given the fact that the premises were constructed in the 1970s, it seems to us reasonable to suppose that 1 April 1973 was the first date upon which a rateable value other than nil appeared in the rating valuation list so that 1 April 1973 may well be the “appropriate day”. Moreover, if there was an antecedent valuation that was probably less than £200. In our view, therefore, by virtue of subsections 1(1)(a)(i) or 1(5)(b) the section 9(1) valuation basis applies rather that section 9(1A) (which applies if rateable values exceed £500) or section 9(1)(C) (which applies where section 1A applies because the financial rateable value limits are exceeded in section 1). If the “appropriate day” was on or after 1 April 1973 the rateable value was less than the £500 qualifying limit. If the “appropriate day” was before 1 April 1973 we infer that the rateable value would have been less than £200 since, as Hague relates at paragraph 7-07, on 1 April 1973 there was an average increase in rateable values of 150 percent. Page 4 of 19 16. Mr. Edwards, the surveyor and valuer who also gave evidence, confirmed that in his experience properties of this type and in this area would have rateable values bringing them within section 9(1) of the Act and we proceed accordingly. 17. In its present form section 9(1) provides as follows: “9(1) Subject to subsection (2) below, the price payable for a house and premises on a conveyance under section 8 above shall be the amount which at the relevant time the house and premises, if sold on the open market by a willing seller (with the tenant and members of his family not buying to seeking to buy), might be expected to realise on the following assumptions(a) on the assumption that the vendor was selling for an estate in fee simple, subject to the tenancy but on the assumption that this Part of this Act conferred no right to acquire the freehold; and if the tenancy has not yet been extended under this Part of this Act, on the assumption that (subject to the landlord’s rights under section 17 below) it was to be so extended; (b) on the assumption that (subject to paragraph (a) above) the vendor was selling subject, in respect of rent charges to which section 11(2) below applies, to the same annual charge as the conveyance to the tenant is to be subject to, but the purchaser would otherwise be effectively exonerated until the termination of the tenancy from any...