Freehold purchase in Clerkenwell, London EC1V
Newman Webb acted on behalf of a group of leaseholders wanting to buy the freehold of their building. We provided the leaseholders with valuation advice on a reasonable purchase price for the freehold.
Based on our valuation, the leaseholder’s solicitor served notice on the freeholder to exercise the leaseholder’s rights to buy the freehold. The freeholder then served counter notice at a much higher purchase price than was in the leaseholders notice. The leaseholders retained our services to negotiate and agree a reasonable purchase price for the freehold with the freeholder’s surveyor.
Despite our best efforts, we were unable to reach an agreed settlement with the freeholder’s surveyor, therefore the matter was referred to the Government’s First Tier Tribunal (Property Chamber), which would determine a purchase price for the freehold.
Prior to the Tribunal hearing, we were able to agree all matters in dispute except for a development value of the basement of the property. The freeholder’s surveyor argued that a development value was attributable to the basement, which would result in a higher bid and purchase price for the freehold. We argued that any development in the basement was not economically viable and would therefore not result in a higher bid from a potential purchaser.
Newman Webb prepared a statement of agreed facts and an expert witness valuation report for the Tribunal hearing, which we attended. We also gave oral evidence which included being cross examined by opposing Counsel.
The result for our client
The Tribunal agreed with our valuation and confirmed that development value was not payable for the basement, saving our clients a additional sum of money.
Freehold purchase in Holloway, London N7
Newman Webb was instructed by a freeholder to provide a valuation for the freehold of a property which consisted of two leasehold flats, both with leases of around 70 years remaining.
The leaseholders wanted to buy the freehold under the provisions of the Landlord and Tenant Act 1987 which allows leaseholders to purchase the freehold if landlords were in breach of their management obligations.
Marriage Value is the difference in value between the long lease value and short lease value. The sum is normally split equally between the freeholder and the leaseholder to form the bulk of the premium payable for freehold purchases.
However, under the provisions of this Act, a Marriage Value cannot be added to the purchase price.
We carried out a valuation and our services were retained by the client to negotiate the purchase price payable for the freehold of the building with the leaseholder’s surveyor.
Both parties agreed from the outset that Marriage Value was to be disregarded, but we argued that the Act did not exclude Hope Value and that this should form part of the premium payable. Hope Value is the additional value which may be paid by a purchaser where the property may have a more valuable use or development potential in the future.
The result for our client
Our argument that Hope Value was payable in this case was successful. As a result, our client obtained a much higher purchase price for the freehold.