This site uses web cookies · Read our Policy here
International: (+34) 952 198 657
Open navigation menu

Judgement Clarifies Collective Enfranchisement for Landlords

First name: 

 

Last name: 

 

Tel. Number: 

IPIN Disclaimer.

  We never share your data with any third parties.

*Note: IPIN investment opportunities are available subject
to location and certain knowledge / experience criteria.

News by Category

Archives



Vowden Investments Limited  Walker Morris  Cravecrest Limited  Timothy Dutton  Simon Clark  Residential Landlords  enfranchisement 

Judgement Clarifies Collective Enfranchisement for Landlords

By - Tuesday 20 August 2013

A judgement from the Court of Appeal has offered clarification on collective enfranchisement rules for landlords and lenders in the UK. Previously the valuation of real estate subject to the claim of collective enfranchisement was unclear, but law firm Walker Morris has successfully defended a plea on behalf of Vowden Investments Limited that has defined the issue.

The case involved the administration of Vowden Investments Limited, which owned a number of prime residential properties in central London. When the company was placed in administration, it was faced with a claim for collective enfranchisement on a four-storey townhouse in the capital that had been divided into three self-contained flats.

The top floor flat was held in a 125-year lease by Vowden but the tenants of the other two flats, via a nominee company Cravecrest Limited, acquired the freehold interest of the building, including any intermediary leases. The structure of the leases meant Vowden's lease was an overriding interest capable of being acquired. However, dispute arose over the valuation of these intermediary leases.

Walker Morris asked the Court of Appeal to determine whether the potential increase in value - agreed to be GBP 2 million - and the potential to develop the roof space as a fourth floor should be reflected in the price paid to Vowden. Cravecrest believed it shouldn't but Vowden was adamant it should.

Timothy Dutton, instructed by Walker Morris, managed to convince the Court of Appeal that the relevant statute does allow Vowden to benefit from the development value of the property, resulting in a final valuation of GBP 6.85 million. From this sum, GBP 3.15 million will be paid to the administrators of Vowden.

Simon Clark from Walker Morris said: "The particular circumstances of this case are unusual in that it involved an overriding leasehold interest, owned by an insolvent entity, that was capable of being acquired, and secondly, that considerable development value existed which had a significant impact on the overall price to be paid. The judgement is of interest to residential landlords, and their lenders, whose properties may be affected by a claim of collective enfranchisement."

Subscribe to IPIN Live by Email - Get our News & Blog updates delivered directly to your inbox - click here


Comments

 

*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.


«« Back to IPIN Live

Follow IPIN Global


Latest Content

Recent Comments

Powered by Disqus