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Cadogan v 2 Herbert Crescent Freehold Limited

DATE: 15 May 2009

Lands Tribunal LRA/91/2007

This was an appeal from a decision of the LVT as to the price payable on a collective enfranchisement. It concerns the relatively common recent phenomenon of conversion of flats back into houses in prime areas. Cadogan claimed an additional premium of £600,000 to reflect what it claimed was the potential to convert the existing flats back into a house.

Thomas Jefferies acted for the tenants, who disputed the claim for development value on a number of grounds, including the inability of the freeholder to exercise the redevelopment break clause in an extended lease because of the existence of a headlease.

The case raised interesting questions as to the interpretation of section 61 of the 1993 Act, and how uncertainties as to legal issues should be reflected in the price a purchaser would pay.