St Matthews Court (N10 1NW) Ltd v Greyclyde Investments Ltd

First Tier Tribunal

Collective enfranchisement claim concerning development value for an extra storey on the roof of four blocks of flats and an additional block in the gardens at St Matthews Court in Haringey.

Tom Jefferies acted for the landlord. After a four-day hearing involving expert evidence from planning consultants, engineers, quantity surveyors and valuers, the Tribunal allowed £699,000 for the rooftop development and £62,500 for the additional block.

The tenants’ valuer sought to adduce evidence from auction sales to show that little if anything was paid where planning permission had not been granted. As in most other similar cases, such evidence was rejected as unreliable, and the Tribunal adopted a residual valuation.

The issues included:

• What discount should be applied for the planning risks?
• What were the engineering risks and how should they be reflected in the valuation? The Tribunal allowed a proportion of the likely cost of underpinning to reflect the risk that it might be required.
• What were the likely costs of the development?
• Components of the residual including the level of profit and allowances for costs and the risks of compensation to tenants.

The decision is available here.