Olu Adefisan

Registered with Property118.com
Saturday 12th April 2014


Latest Comments

Total Number of Property118 Comments: 4

Olu Adefisan

18:15 PM, 21st April 2020
About 4 months ago

Auction Sale - Who's the Daddy?

Reply to the comment left by MalcolmH at 21/04/2020 - 17:01Yes. That is correct. But the obligation to serve the notice to the tenants lies with the new landlord and not you, and the penalty for not serving the notice lies with the new landlord and not you. All you need to do is provide a schedule of tenancies/ list of tenants, to be served with the notice, to new owner who would serve the notice to each of the tenants whose details you would have provided to him. Either you or your solicitor should then ask the new owner/buyer to provide proof or confirmation that the notice has been served. Until this is done, you will continue to act and be liable as the landlord, as if the property has not been sold by you. If after you have given reasonable period of time of say 6 weeks, and you feel that the buyer has not been able to serve the notice to the tenants, you can elect to serve the notice to the tenants by yourself, it will have the same effect.... Read More

Olu Adefisan

12:32 PM, 21st April 2020
About 4 months ago

Auction Sale - Who's the Daddy?

I do not have specific details of your matter and so cannot speak to your situation as a result of which I will caveat my comments by asking that you should seek further advise from your lawyer and not rely on my general opinion. As a general rule, under the provision of the Section 3 (3A) of the Landlord and Tenant Act 1985, you or the new owner will be required to write to all existing tenants in the property informing them of the change of ownership, including providing them with the name and the address of the new owner. You are required to do this within 2 months of completion date, there is a penalty if you failed to do so. Until you do so, you will continue to be responsible, liable and act as the landlord even though you have sold the property, this in effect means that only you, will be able to collect the rents or enforce the tenancy conditions, but both yourself as well as the new owner shall be jointly and severally liable for repairing obligations. Please go through the details of exactly how to write the notice to be sent to your tenants with your conveyancing solicitor following your sales.... Read More

Olu Adefisan

12:14 PM, 4th September 2017
About 3 years ago

Options to release a restrictive covenant (Housing Act 1985 section 610?)

If you are going through the negotiation route, and not litigation (not advisable), you need to get a valuer to obtain the residual value for you. The residual value is what remains after deducting the net increased in value resulting from the conversion, of the property "Net Open Market Value, NOMV" deducted from the Total costs "TC" (i.e. the total costs consists of construction works costs, short term borrowing costs and professional fees all dded together). The difference between these two figures gives the residual value "rv". Therefore NOMV-TC= rv. From the rv make further deduction of say 20% of TC representing developer's profit, to give you the net profit "np" to be shared with the covenant owner. The covenant can be viewed as a ransom on your property, the rule of thumb for valuation of the releasing of a ransom can be found in Stokes v. Cambridge Corporation (1961) 13 P & CR 77 and it is usually based on "one-third of the increase in value of the adjacent land provided by the ransom strip". Therefore in your own case, after netting out all your costs and taken a profit for your risk, by going through the residual valuation process, you are left with a net profit, what ever figure you obtain thereafter, one-third of that is what you should pay to the Covenant owner as premium. You then need to have another look at your overall calculations to see if after paying the premium the venture would still proof profitable for you. The decision as to whether the venture is profitable should be determined after you have gone through the valuation process and before commencement of the negotiation process. Once you are comfortable with the figure obtained through the process as above described, you could then put through a without prejudice offer. Basically you should start with an offer that is lower than what you are willingly to pay with a view that the other party would make a counter offer that is higher; so that by the time both parties agreed, the compromise would be as close as possible to your target figure. You should aim to strike a compromise around the one-third value figure. The next stage would then be to draft the agreement for the covenant to be discharged which would be discharged upon payment of agreed premium to the covenant-owner as above described. Sometimes, the other party may ask you to pay (or as a negotiation sweetener you may offer to pay) their legals fees, legal perfection or variation of title deed costs, you should factor these costs into the value equation process.... Read More

Olu Adefisan

4:42 AM, 10th July 2016
About 4 years ago

Valuation of storage space taken?

Firstly, I will like you to consider the process, whether you wish to go to court or you would rather use Alternative Dispute Resolution (ADR) method (which is cheaper and more flexible).

Concerning the process, it is cheaper if this matter is dealt with using an alternative dispute resolution (ADR) method. Since this person is your neighbour, it also helps to preserve your relationship longer term other than if you go to court. If ADR is to be used, you should agree with your neighbour that you wish to use this method in resolving the matter. In doing so, you both could jointly appoint a valuation surveyor (it is cheaper) or write to the RICS President to be your mediator, the RICS president upon receiving your notice himself would not be the mediator but his office would nominate a chartered valuation surveyor with adequate experience and competencies to handle the matter for you. If you fail to agree on a joint appointment of a single valuer, either side can appoint their own valuer (more expensive) and the two valuers would then come to an agreement on the two of you behalves. If they both fail to agree, a third valuer to be nominated by the RICS president will give a binding ruling. All this could be set out for you by your lawyer in the terms of the ADR resolution of the dispute.

Depending on whether it is allowed in the process of the ADR terms that you agreed upfront with your neighbour, I will advise that you instruct a valuation surveyor to prepare a valuation report for you and if you can afford, the brief should include retaining the same valuer as your expert mediator or expert witness (in the event the matter proceeds to court provided you wish to leave the option of going to court in the future open), in addition you are retaining the instructions of your lawyer through whom you should filter through your correspondence to the other party.

Next, I will like to add some pointers to the advise provided to you by Nick Pope above by asking you to ensure whether the extension by your neighbour would have been impossible without the strip of 1m2 encroachment into your property and the additional headroom taken from your boundary? If the answer is yes, then you should look at possibility of valuing as a 'ransom strip' in which the rule of thumb is that you are entitled to 1/3rd of the value increase resulting from access gained by your neighbour from your property. If you look at what figure that this scenario throws up (lets call it Value 2), you can them make a comparison with the value provided by the approach described by Nick Pope above (lets call this Value 1). The third approach is useful if the property types before and after are clearly identified in the local market (i.e. if there has been clear evidence of transactions in the local property market of the price of a 2 bed flat (having 1 double room and 1 single room) as clearly different from the price of another property type that is a straight 2 double bedroom flat, then a third approach which involves looking directly at prices of comparable properties of each type could be used to determine the difference between these two to come to your value figure.

You stated the value at which they bought the property but you did not state the current value. Assuming it is a 2 bedroom flat and the current value is £650k and imagining that the additional value resulting from the extension is in the region of £100k, the before value would then be set at £550k.

All these figures could be set out for you by your valuation surveyor who would then conclude in his/her professional opinion/judgement as to what the additional value has been generated to your neighbours property resulting directly from the encroachment on your property. Usually the valuer would pick the highest value of the approaches considered. The surveyor would explain the approaches taken and provide justification for their approach. Normally, you would split the difference in the value on a 50/50 split. However, because your land was taken without your authority you have a stronger hand, the split could be 60/40 in your favour.

In the analysis in the para above, i.e. that the additional value generated is £100k, based on if it is a ransom strip, then striking a compromise on a range of £33k (i.e. 1/3rd of the increment in the value) is sufficient to give you adequate compensation for your loss. If Value 2 above is adopted, playing devil's advocate, your neighbour valuer may argue that the assumed additional value of £100k is generated as a result of costs of refurbishment incurred and may seek to reduce the money to be split by a proportion of the overall refurbishment costs attributable to the 1m2 and headroom space taken from you; lets assume the apportioned costs is £20k. The net additional value to split will then be £80k (i.e. £100k -£20k). You can then strike your bargain at say 60% of £80k i.e £48k.

The figures I used are mere assumptions that are used to illustrate the process to you and to demonstrate the principles and approaches that you need to take. You should involve the advise of a valuation surveyor to pinpoint the exact figure for you.... Read More