Alberti v Cadogan Holdings Ltd [2021] UKUT 85 (LC) (09 April 2021)
Alberti concerned a dispute in the Upper Tribunal over the premium payable in an enfranchisement claim for the freehold of a house under the Leasehold Reform Act 1967. In such claims, the valuation method requires tenant's improvements to be disregarded as to their affect on the value of the property. In this case, the property had previously been five flats and had been converted to a single house in the 1970s by the original tenant. A conversion of this nature would not now be permitted under planning law and policy, although it was permissible at the time of the works.
The tenant argued those improvements to create a house should be disregarded and further that due to it now being unlawful to do those works, the assessment should be as five flats with no redevelopment potential, resulting in a value of £2.6m. The landlord argued for the value as a house, being £11m.
The Tribunal agreed with the tenant's argument, the planning status should follow the disregarded tenants improvements, the consequence being that five flats would not be capable of being developed into a house on the valuation date – being the date of the tenants notice of claim for the freehold.
If you would like further information or advice on enfranchisement please contact enfranchisement specialist, William Bethune.