Daejan Investments Limited v Nigel Collins & Anor
Decision date: 9 February 2024
Neutral citation: [2024] UKUT 26 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal to the Upper Tribunal reheard a First-tier Tribunal valuation of the premium payable to extend a lease at 207 Ashley Gardens under the Leasehold Reform, Housing and Urban Development Act 1993, concentrating on choice and adjustment of comparables, the value of parking and tenant-made alterations, and the appropriate discount for Act rights and relativity to derive the existing lease value. The Tribunal selected five specific comparables, used the UK HPI (Westminster flats) for time adjustment, treated the additional WC/kitchen as tenant alterations with no market-value deduction, allowed about £5,000 for a precarious parking possibility, adopted an Act-rights value of 5.85% and a relativity of 74.8%, and calculated the premium at £208,109.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal indicates that, in valuing comparables for freehold reversion/leasehold purposes where transactional data exists, transaction-based indices for the relevant area (here UK HPI for Westminster flats) should be preferred for time adjustments over valuation-based prime-market indices, and where there is a contemporaneous sale of the subject property the Act-rights deduction should be applied to the date-adjusted market value with relativity graphs used only as a cross-check.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment expresses reservations that cumulative sequential percentage deductions (applying percentage deductions successively to already-adjusted figures) are unreliable compared with applying all adjustments to a common starting point, and that older relativity graphs (e.g. 1996) may be too dated to serve as primary guidance in current valuation exercises.