You act on behalf of a residential freeholder. You have received a number of requests for lease
Question:
You act on behalf of a residential freeholder. You have received a number of requests for lease extensions. By making reference to relevant legislation, case law and valuation principles, calculate the premiums payable in connection with the proposed lease extensions for the following flats:
a) 2 bed flat with 61 years unexpired – the rent paid is £165.00 per annum. An equivalent
flat under a 125 year lease has just sold for £275,000.
b) 3 bed flat with 44 years unexpired – the rent paid is £200.00 per annum and there is a
fixed rent increase to £300.00 per annum in 4 years’ time. There are no three bedroom
comparables but a 2 bedroom flat in the same block enfranchised last year has just
sold for £220,000.
c) 2 bed flat under a 125 year lease granted on the 1st February 1995. The ground rent is
reported to be £250.00 per annum. A brand new flat across the road has just sold for
£360,000.
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts