Update 8th December 2014

Elba Ground Rent Dispute

Update – 8/12/14

As residents will be aware from our previous update on 28th November 2014, we recently received the Opinion of our barrister, Mr Douglas Readings, regarding the ongoing ground rent dispute.

Mr Readings Opinion is favourable to our case and consists of 2 limbs.

Firstly, he refers to recent case law involving similar disputes in Birmingham and Cardiff.  In both cases the Upper Tribunal of the Lands Chamber interpreted ‘open market value’ to mean the value which the open market would pay as ground rent for a given plot of land.  As no such market exists, expert valuation advice has to be considered.  In the case of the Elba estate our chartered surveyor expert takes the view that the market would not pay more than £200 - £250 by way of ground rent for the relevant plots.

Secondly, our barrister refers to paragraph 5 of the Fourth Schedule to our leases.  This contains a proviso which specifically prevents any increase in the ground rent at review, where such an increase would “prevent, preclude or fetter” the tenants’ right to purchase their freehold.  Mr Readings is of the view that increasing the ground rent above £250 would “prevent, preclude or fetter” tenants on the Elba from purchasing their freeholds and would therefore conflict with this paragraph.

Obviously the above is merely a summary and the full text of the Opinion is available for those who have contributed to the legal advice fund.  If you would like a copy please contact the Action Group through our existing channels.   

At a closed meeting for contributing residents last Thursday the 4th December, the Action Group recommended disclosure of the Opinion to the City & County of Swansea.  A vote was held at the meeting and an overwhelming majority voted in favour of that course of action.

Accordingly the Opinion was disclosed to the City & County of Swansea the following day, Friday 5th December.

We have invited the Council to meet with us again as soon as possible to agree on how best to progress negotiations.  We have also indicated that, based on our barrister’s Opinion, the revised proposals put forward by the Council during our last meeting with them in October, are unacceptable.

The Action Group