Summary

The provision of a new house could not constitute an "improvement" for the purposes of s.9(1A)(d) Leasehold Reform Act 1967. The beneficiary of a building agreement in whose favour a lease would be granted upon completion of the house was not then a tenant, either in law or in equity, notwithstanding that the term subsequently granted to him extended backward to a time before construction started. * Leave to appeal to the House of Lords refused.

Facts

Appeal by Mr Rosen ('R') by way of case stated from the decision of the Lands Tribunal ('the LT') on appeal from the London Leasehold Valuation Tribunal, that had determined the price payable by R for the transfer to him of the freehold of 25 Kensington Gate ('No.25'). Before 1850 the then Trustees of the Camden Charities ('the trustees') were the owners of a workhouse. In that year the trustees entered into a building agreement with a builder ('B'), by which he agreed to build 29 houses on the site, on completion of which to carcase and roof stage he was to be granted a 99 year lease of the site from 25 December 1849. In October 1852 the trustees granted B a 99-year lease of the site. It was common ground that by that date No.25 was complete, and not merely built to carcase and roof stage. The issues on the present appeal were, for the purpose of determining the price payable by R for the freehold of No.25 pursuant to s.9(1A)(d) Leasehold Reform Act 1967 whether: (i) the price was to be diminished by reason of the fact that the completed building represented an improvement; and (ii) at the time of construction B was the tenant of the long lease of No.25. The LT decided both issues against R.

Held

(1) Although the construction of a house on land was capable of constituting an improvement of that land that was not the kind of improvement to which the section was directed. It was clear that subs.(d) was directed an improvement of "the house and premises" in respect of which the price payable was being determined. (2) Moreover, subs.(d) could not be taken as applying where a tenant under a long lease, such as B, had expended money on the relevant property but had received equivalent value from the landlord in exchange, ie a valuable lease. (3) At the time that construction of No.25 was completed, B was merely the beneficiary of a building agreement and was not a tenant, either in law or in equity, of the house notwithstanding that the term subsequently granted to him extended backward to a time before construction started.

Appeal dismissed.