Cadogan & Anor v Cadogan Square Ltd [2011] UKUT 154 (LC) (21 April 2011)

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• In Blendcrown Limited v Church Commissioners for England [2004] 1 EGLR 143 the Tribunal, P H Clarke FRICS, said at [77F]: “I cannot accept Mr Maunder Taylor’s view [the expert for the nominee purchaser] that, because he found no indication that non-participating tenants might wish to extend their leases and did not wish to participate in the collective enfranchisement, this shows the absence of hope value.  What we must consider is the subjective view of a hypothetical purchaser.  If Mr Maunder Taylor’s approach is correct, it is unlikely that hope value could ever be attributed to the flats of non-participating tenants.  The fact that a tenant does not wish to participate in acquiring the freehold or extend his lease at the time of collective enfranchisement does not mean that he (or his successor in title) will not be interested in paying for a lease extension at some time in the future.” Mr Buchanan essentially is making the same argument as Mr Maunder Taylor and we reject it for the same reasons as the Tribunal did in Blendcrown.  The evidence suggests that it is rare for a tenant to allow a lease to run to term.  No specific examples of such an event were given by Mr Buchanan, although he said he could “identify a number of cases in 1997 in Cadogan Place.”  In our opinion the hypothetical purchaser would consider it probable that the tenant of flat 3 would seek a lease extension before the expiry of the term in 2023 and would include hope value in his bid.