Lease Extensions and Enfranchisement: what for a first tier tribunal (FTT) might be unreasonable?

In my experience, there are freeholders and claimants alike who can and do adopt outrageous positions in claims and counter claims following formal claims made in accordance with the ’93 Act.

However, few can match the freeholder who, in answer to a Notice of Claim seeking a premium value of £37,811, responded in a counter notice seeking £132,424!    The freeholder’s valuer would not negotiate nor would he discuss the matter.  An offer to settle was made, albeit without prejudice, at £50,000.  This was rejected.

The claimants in this instance were frightened (terrified might be a better description) but with the assistance of their professional advisors they remained resolute.

The matter was heard and determined by a first tier tribunal (FTT) [formerly a leasehold valuation tribunal (LVT)].  At the hearing, the freeholder was seeking £83,022 only!

The FTT determined (Case Reference: LO/LON/00BA2013/0386) that the premium value to be paid should be £47,850 (subject to a minor appeal – about £500 – by the claimant for a very slight error in premium value calculation).

Now, new rules under which FTTs operate suggest that in the future such outrageous counter claims may possibly be penalised by an award of costs in substantial proportions against those adopting unreasonable positions.   New strategies are currently being developed by valuers and solicitors in an attempt to curb these excesses.

In the meantime the question of what is reasonable and what is unreasonable may occupy the minds of FTTs more than previously?

These matters were discussed last week at the ALEP Autumn Conference.

Ellodie Gibbons and Mark Loveday,who are eminent barristers from Tanfield Chambers and are specialists in enfranchisement and leasehold management, led a discussion on these new rules and their possible application in the future.   While the new rules are in place, they will now have to be tested by individual cases submitted to the FTT.  We will, of course, keep you informed.

Michael Tibbatts MRICS is a member of the Association of Leasehold Enfranchisement Practitioners (ALEP)

ALEP is a not-for-profit association that brings together barristers, solicitors, surveyors and enfranchisement intermediaries and managing agents working in the residential leasehold sector. ALEP promotes best practice by vetting members to ensure they have significant expertise in leasehold enfranchisement.  Membership of ALEP acts as a badge of assurance so that flat owners and freeholders can be confident that they are employing professionals with the right level of experience in handling potentially complex transactions.

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