Verdict clears way for lease buy-outs

WEST End firm Collyer-Bristow is predicting a boom in leasehold enfranchisements following a landmark tribunal verdict.

Senior assistant Jessica Taylor says nervous tenants will be encouraged to take the plunge after a leasehold valuation tribunal fixed the price of an 89-year lease at u2,700, u15,800 less than the landlord asked.

“The decision will encourage tenants unhappy with the way their properties are managed to get rid of their landlords by buying the freehold,” she says.

“We've had a great deal of interest, particularly from people in buildings of three or four flats where it is easier for tenants to organise themselves.”

The verdict, on two leasehold flats in London's Primrose Hill, is the first under the new Leasehold Reform Act involving flats with leases of under 100 years. The tribunal fixed the property's freehold value at u499,000, an increase of 1.8 per cent on the value for an 89-year lease of the property.

The landlords, Towngram Developments, were also defeated in their attempt to win compensation for a commission it obtained by arranging insurance for the property.

But partner Damian Greenish from Lee & Pembertons in London, which acts for a number of large estates, says: “People will still not be keen to enfranchise unless there is a really pressing reason, such as a deeply bad landlord.”

“What might produce more claims would be a decision on lease extensions under the new act.”