Gary Edward Hanson & Anor v Desmond Theorore Harding & Ors
Decision date: 7 March 2025
Neutral citation: [2025] UKUT 78 (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 concerns the premium payable for a lease extension where the registered freeholders cannot be found and the FTT had added a £20,000 sum as immediately payable development compensation for loft-conversion potential. The Upper Tribunal held that the £20,000 represented an attribute of the property to be taken into account under Schedule 13 paragraph 3 (and not separate paragraph 5 compensation) and should be deferred to the reversion, set aside the FTT’s approach and determined the premium at £10,884. The decision was allowed with no remittal to the FTT.
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: high
The tribunal’s ratio is that future improvement potential which is an attribute of the property must be included in the landlord’s freehold value under Schedule 13 paragraph 3 and, where that value is not immediately realisable by the landlord, reflected by deferment to the reversionary date when calculating diminution in value; it is not automatically to be treated as separate, immediately payable development compensation under paragraph 5.
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 contains observations that a tribunal should not advance fresh reasons when refusing permission to appeal that were not part of its original decision, and that the rule excluding tenant’s improvements aims to avoid making leaseholders pay twice for value they already provided (a Law Commission policy point).