VALUATION AND LAW
It is not a good day at Floggitt and Fleessam Chartered Surveyors. The senior partner, Charles Protimeter is in a bad mood. His graduate assistant, Willie Floggitt BSc Est Man, grandson of the founder of the firm, is off sick with an attack of dry rot and their most valued clients, HOSPESTAN INVESTMENTS (H.I), have acquired a large Edwardian block of flats from the receivers of Blenkinsop Holdings (in voluntary liquidation). Cameron House is on five floors comprising the following;
Fifth floor; 10 x 1 bed flats, 5 x 2 bed flats.
Forth floor; 10 x 1 bed flats, 5 x 2 bed flats.
Third floor; 10 x 3 bed flats.
Second floor; 10 x 3 bed flats.
First floor; 10 x 3 bed flats.
Ground floor; 10 x 1 bed flats, 5 x 2 bed flats.
Basement; 600 square metres of storage; could be converted subject to normal approvals being obtained.
All of the 2 and 3 bedroom flats are let to rent controlled tenants who have the current fair rents agreed by the rent officer 4 years ago of;
3 bedrooms £350 per week inclusive,
2 bedrooms £250 per week inclusive.
Similar flats let under AST's are being agreed at £700 and £800 per week respectively.
All of the 1 bedroom flats are let on Assured Shorthold Tenancies at a current rent of £2500 per calendar month inclusive. The general level of rents in the area for similar properties on AST's is circa £ 3000 exclusive.
£1,200,000 has been recently spent on external repairs and £455,000 is to be spent on underpinning.
Mrs Cymbal the tenant of Flat 17 (3 bed) and Bert Smedley the tenant of Flat 15 (2 bed) are not happy as the landlords have applied to the Rent Assessment Committee (RAC) to have the fair rent increased by an average of 20 % as they (H.I.) have recently spent £ 2,750,000 on exterior/interior repairs and the installation of a new carpet to the common parts.
Jocasta Grimeley-Ffiennes is Chairwoman of the tenants association, a practising Barrister and a formidable opponent. She is of the opinion that the rents for all of the one bedroom flats is excessive and is referring the matter to the RAC for their determination of same. She has a 2 bedroom flat held on a 99 year lease from 24/3/1974 with a ground rent of £600 doubling every 33 years.
The prevailing market values for well-modernised flats in well-modernised blocks are as follows;
3 bedroom circa £ 1,750,000
2 bedroom circa £ 1,350, 000
1 bedroom circa £ 950,000
You must therefore produce:-
1 A enfranchisement valuation for the flat of Jocasta Grimeley-Ffiennes ie how much should she pay for a statutory enfranchisement?
2 The valuation of the freehold interest of the block as at the hand in date. NB This will involve a fully annotated first view