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Mirza v Elmdon Real Estates LLP

Mirza v Elmdon Real Estates LLP (Unreported, 28 June 2019, Newcastle County Court, HHJ Kramer)

Unclear reasoning is not a ground for setting aside an expert determination of a rent review.

Cecily Crampin appeared for the successful Defendant in this claim for a declaration that an expert rent review was invalid for failure of an expert to follow instructions. The expert was not required to give reasons for his decision, but he did give a brief determination in which he said, in particular, of the decapitalisation rate that he had used, that it seemed to be agreed between the parties. The Claimant said that the expert had used a methodology not permitted for this type of rent review, following the decision in Clarise Properties Ltd v Rees [2017] EWCA Viv 1135, and that in any event in choosing the decapitalisation rate he had had no regard to the term of the hypothetical lease or its terms, under the rent review and hence had failed to follow his instructions in the rent review clause. HHJ Kramer found that Clarise was not authority for the proposition that legally a s15(2) type valuation methodology under the Leasehold Reform Act 1967 could not be used more generally in rent review, and that he could not say from the determination and the material in front of him that the expert had not considered the decapitalisation rate independently of the suggested agreement; indeed his choice of valuation methodology suggested he had considered such things as the lease term remaining, and the user clause. He dismissed the claim.

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