Jocasta Greeley-Fineness Flat Valuation and Law - Coursework Example

 Valuation and Law coursework Introduction Due to uncertainties synonymous with the whole valuation processes concerning the Housing and Rent Act, projecting the actual value and cost of the freehold in question presents an inconclusive scrutiny. To that effect, it is worth taking note of the estimated cost in the entire enfranchisement valuation processes. However, this report focuses on the mechanics of the legislation process and the recommendations for assessing the value of the Jocasta Grimeley-Ffiennes flat. Likewise, the report seeks to base all its findings and the officially ascertained value preferred on the methodology and universal ideology followed in estimating the current value of the property; in this case, the Jocasta Grimeley-Ffiennes flats. Additionally the article will entail vivid descriptions of whichever assumptions made and detailed explanations of calculations achieved in determining the value of the units (Haynes 2004, p. 433). Accordingly, this account will provide sufficient information on the conclusions reached even like how the outcomes were achieved. The legislative perspective in determining the amount payable for a freehold in accordance with the Housing and Rent Act shall encompass a wide range of terms, firstly the legislation process seeks to highlight the closing income receivable from ground rents. To this effect, however; the ground rent for the flat of Jocasta Grimeley-Ffiennes is £300. Another legislation process to be followed is considering the reversionary value projected on termination of the lease. The legislation process offers another significant approach in enfranchisement valuation, the marriage value (Kaal, 2012, p. 65). In essence, this comes to play when the Act and the conjoining of freehold and leasehold interests demand that the expected gains be divided equally between the freeholder and the owner in the event of existing increase in value. On the other hand, in relation to legislative process, another aspect worth considering is Injurious affection; this is technically rewarding the leaseholder in view of hindered future development plans for the property. In like manner, a leaseholder stands to be redeemed if development in the adjacent properties is obscured and if the adjacent premises decrease in value because of obligatory vending. Legislative process does not provide for the need to undertake a valuation, however; it is relatively important to carry out valuation in order to establish the compensation entitled to the freeholder as it is not bound to any legal parameters (Kariyawasam, Takakura, and Ottomo 2015, p. 51). Apparently, the legislation provides the basis for assessing the value accrued concerning existing market conditions on assumption of willing buyer and willing seller concept. In the event that the freeholder decides to reconsider the offer thereby presenting his proffer, and proceed to the negotiation process with the property owner and fail to agree on the figures then a legal conquest ensues. At this point, any of the two contending teams could consider filing a case with the Property Chamber of the First-tier Tribunal. Therefore, the tribunal will review the value of the leaseholder’s interest, the sum of the marriage value and the cost of reaching an agreement such that the scales are balanced. The tribunals resolve should denote non-affiliation to either party. Another critically significant aspect in enfranchisement valuation and determining the cost amounting to the freeholder’s interest is the principles and methodology involved in the consideration of the latter stated fact. Valuation is an inexact science hence bases its approach on assumptions and recognized facts in relation to the methodology involved in working out enfranchisement valuation (La Porta, et al. 2007, p. 52). In the likelihood of an expected change, an increase or otherwise then it would be appealing to base the terms of the lease and ground rent receivable to the leaseholder on the existing market value of the flats in order to achieve reasonable figures. Annotated franchise of the leasehold property In view of the enfranchisement practice, the unresolved term of the lease and the ground rent receivable to the freeholder remains an essential and recognized fact. Such practices provide the source for existing values of the flat and the outward projections of values at the same time as determining a yield rate relevant to impending evaluations. Long leases concerning freehold premises are calculated based on investment and thus present no inherent value; this is, in essence, the reversionary value and the ground rent. Technically, the amount of income bound to be generated in the future is determined by estimates for present values. It is critical to calculate the term for enfranchisement valuation for the plaintiff (Voit, et al. 2015, p. 58). Therefore, the ground rent of 300 is multiplied by the duration of lease, which is 27 years as at 2015 and then multiplied by the assumed yield rate of 5% to give a summative €405. While in the First-Tier Chamber, the constitution asserts that the proprietor or the property owner should embrace the issues addressed under the enfranchising approaches. The main clause emphasizes the need for the proprietor to qualify for the implemented right with the other terms of the lease remaining constant. It is evident that the process of leasing the units available in the property should match the addressed issues under the “... statutory bases ...” according to constitution. It is apparent that the inclusion of valuation practices emerges when a case of supervening inconsistency arises in the lease agreement. The proprietor and the tenant should ensure constitutionalism in their lease agreement (Law 2006, p. 14). Arguably, the two parties should consent with the pricing issues as such would regulate their future relationship, and the contract could be void in the advent of conflicting illegalities. Consequently, in calculating the reversionary value, the current value of the two-bedroom apartment valued at 975000 in relation to the prevailing market values for such modernized buildings. To acquire the complainants’ flat current value, however you divide €975,000 by the total number of 2 bedroom flats in the premises, in this case, 5 flats to get €195,000 which is, in essence, the interest receivable to the freeholder at present. Long leaseholders have been known to switch to (ASTs) Assured Short hold Tenancies upon termination of the lease period. In such cases, the owners propagate a deducted percentage on the leasehold interests during valuation. The move is relevant in ensuring owners do not suffer losses because of vacant flats while the leaseholders are entitled to pay rent weekly. The purpose intended by the two parties should include the valuation surveyor in the process of leasing. It is salient to ensure the implementation of the formal legislative guidelines. Essentially, the property owner must attend to the freeholder in his capacity as the offeror. According to the calculations, the freeholder remains honourable to run the property for the agreed term of years unless the parties would consent to an additional subject or clause in their contractual capacities. In light of this, a projected 8% increment assumption is made concerning the enfranchisement of the leasehold. To that effect, the improved value would be derived by multiplying the current market value of the flat that is €1,950,00 by the projected increase in market value estimated at 8% to achieve €1,560,000. To achieve an investment value for the future by using a present multiplier assumed to be one by the previous 8% yield rate. This will include a present value of 1overdue 27 years at 8% to give 0.00345, which is in turn multiplied by €1,560,000 to produce €5,382. The investment value of the leasehold is given by adding up the reversionary values and the values achieved from the term. Therefore, it would be €5,382 added to €405 to give €5,787 as the interest projected in an open market range. Consequently, the legislative process provides for the assumption of any marriage value for a lease in excess of 80 years regardless of the outstanding period to the effect of expiration. Using the above figures, deriving marriage values would require a subtraction of combined present leaseholders’ interest-€975000 together with the freeholders’ interest-5787 from the improved value of the flat that is €1,560,000 to give €579,213. From these workings, it is notable that marriage values exceed by far the freeholder’s interest. Calculating such issues is largely dependent on the projected increase in value of flats, however; the marriage value is largely dependent on the existing conditions of the value of the flats. In the event that the current lease is considerably longer, the underlying marriage value may be equally low. Conclusion When closing the valuation with reference to the above illustration, the projected value of the flat concerning the expected surplus costs involved owing to the additional freeholders interests and injurious affection would totally amount to a sum of the freeholder’s interest. However, the process of valuation meets uncertainties in evaluating and calculating the legality of any lease following the newly implemented clause, “Leasehold Reform (Amendment) Act 2014”. It is evident that the legality could control the ruling and any other issues of jurisdiction in the present as the current clause remains binding to the previous measures. The reversion processes for the first and second processes realize the logical protocol of valuating the asset in the present. The second reversion undertaken in valuation of the house recommends the essence for the jurisdiction to rule in favour of the plaintiff citing the fact that the freeholder’s management practices in relation to the property contrasted with the clauses agreed on in the contract. Bibliography Haynes, M. 2004, Partners Owe to One Another a Duty of the Finest Loyalty... Or Do They-An Analysis of the Extent to Which Partners May Limit Their Duty of Loyalty to One Another, Tex. Tech L. Rev., 37, 433. Kaal, W. A. 2012, Contingent Capital in Executive Compensation, Washington and Lee Law Review, 64. Kariyawasam, K., Takakura, S., and Ottomo, N. 2015, Legal implications and patentability of human stem cells, Australia and Japan compared, Journal of Intellectual Property Law and Practice, jpu256. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., and Vishny, R. W. 2007, Legal determinants of external finance, Journal of finance, 1131-1150. Law, D. 2006, Delivering open access, From promise to practice, Ariadne, 46), 4. Steinitz, M. 2015, Incorporating Legal Claims. Notre Dame Law Review, 14-15. Voit, E. O., Martens, H. A., and Omholt, S. W. 2015, 150 Years of the Mass Action Law, PLoS computational biology, 111), e1004012. Read More