ALEP Spring Conference. Case Reviews. The Meaning Of ‘Development Value’.

An enlightening review of enfranchisement cases came from Mr Antony Radevesky of Falcon Chambers at the Association of Leasehold Enfranchisement Practitioners conference. The case of Hillmy vs HembridgeVillas[2010 1WLR2750] emphasises the importance of correct signatures on notice of claim to be served under Section 13, while the Court of Appeal confirmed in the case of Panagopoulos v Earl Cadogan [2011 02EG76] that a flat used to house a caretaker is classified as a common part of a building, where leases of one or more of the other flats in that building state that the ‘caretaker’s flat’ must be used for that purpose. A ruling on 41-60 Albert Palace Mansions [2010 1WLR2046] decided that part of a building can be the subject of collective enfranchisement, even if it is capable of being subdivided vertically into smaller parts, each of which could also be subject to its own collective enfranchisement claim.

The meaning of ‘development value’ was discussed in regard to enfranchisement claims under the ‘93 Act.  The fact that part of a building might be capable of further development is not necessarily an excuse for a freeholder to enhance his demand for a higher freehold value. In the case of McHail and Another v Earl Cadogan, interesting valuation issues were raised, the principal one being that there could be an assumption, when valuing the freehold interest, that no 1993 Act rights apply.  This condition would not apply when valuing the tenant’s interests.