Court Case Thread! June 2018 (6 Viewers)

[skybluetony176]

The formula for the cost of leasehold extension

Can anyone make sense of this and whether it’s relevant to commercial leases as well as residential?

 

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[chiefdave]

By law CCC would have to extend the lease. And there is a formula to work out the cost of it. Wasps paid the top amount.

Highs wouldn't sell to SISU? They tried enough times. But SISU went back on the agreement made each time.

Even the council wouldn't be stupid enough to lease a stadium out without excluding the right to renewal.

How have you worked out Wasps have paid top amount? The lease extension works out to £5K a year.

 

[chiefdave]

The formula for the cost of leasehold extension

Can anyone make sense of this and whether it’s relevant to commercial leases as well as residential?

It will be for housing. It has been applied in the past to offices that were formally houses but I don't think there's any examples of it applying to football stadiums.

There is a right to extension on a commercial lease but its common practice to exclude it in the lease. Hence you see so may tenants being thrown out so their premises can be redeveloped.

 

[tisza]

By law CCC would have to extend the lease. And there is a formula to work out the cost of it. Wasps paid the top amount.

Highs wouldn't sell to SISU? They tried enough times. But SISU went back on the agreement made each time.

what? Wasps bought the lease-holding company (ACL). Whatever they did with the lease which law obliges the owner to extend or re-negotiate the lease? Can go back and ask the owner to re-negotiate but is there a legal obligation for the owner to do so?

 

[Astute]

Even the council wouldn't be stupid enough to lease a stadium out without excluding the right to renewal.

How have you worked out Wasps have paid top amount? The lease extension works out to £5K a year.

As I keep saying there is a formula to work out the cost of it. They paid the top end of the extension. It wasn't my idea. It is the law.

 

[Astute]

what? Wasps bought the lease-holding company (ACL). Whatever they did with the lease which law obliges the owner to extend or re-negotiate the lease? Can go back and ask the owner to re-negotiate but is there a legal obligation for the owner to do so?

Any lease with less than 50 years IIRC can be renewed. There was 36 years left. Freeholders used to rip everyone off. So the law changed.

 

[skybluetony176]

It will be for housing. It has been applied in the past to offices that were formally houses but I don't think there's any examples of it applying to football stadiums.

There is a right to extension on a commercial lease but its common practice to exclude it in the lease. Hence you see so may tenants being thrown out so their premises can be redeveloped.

But ACL has always had that option from day one. What I’d like to know is if there is a formula in law for commercial property, if so you can only assume that any valuation on ACL at any point has to be based on the possibility of the option for a lease extension being taken up at a formula set in law. That being the case it would be hard to see how SISU has a case. By the opposite token if there is a formula in law and this wasn’t considered in any valuation of ACL at any point then you’ve got to say that valuation was flawed in which case SISU has a case.

 

[Astute]

what? Wasps bought the lease-holding company (ACL). Whatever they did with the lease which law obliges the owner to extend or re-negotiate the lease? Can go back and ask the owner to re-negotiate but is there a legal obligation for the owner to do so?

Renegotiate against what the law says?

 

[Astute]

But ACL has always had that option from day one. What I’d like to know is if there is a formula in law for commercial property, if so you can only assume that any valuation on ACL at any point has to be based on the possibility of the option for a lease extension being taken up at a formula set in law. That being the case it would be hard to see how SISU has a case. By the opposite token if there is a formula in law and this wasn’t considered in any valuation of ACL at any point then you’ve got to say that valuation was flawed in which case SISU has a case.

The price was set on an unused stadium. The stadium was unused to reduce what it was worth. Even SISU said it was hardly worth anything.

 

[chiefdave]

As I keep saying there is a formula to work out the cost of it. They paid the top end of the extension. It wasn't my idea. It is the law.

Can you provide a link as google isn't showing any such formula for commercial properties.

Any lease with less than 50 years IIRC can be renewed. There was 36 years left. Freeholders used to rip everyone off. So the law changed.

Are you referring to the Leasehold Reform Act which gives the tenants of houses, in certain situations, the right to a 50 year extension?

 

[chiefdave]

But ACL has always had that option from day one.

Exactly so its a nonsense for CCC to say there was no way it was possible for them to sell ACL with a 250 year lease.

 

[tisza]

Any lease with less than 50 years IIRC can be renewed. There was 36 years left. Freeholders used to rip everyone off. So the law changed.

FAQs - Commercial leases

 

[chiefdave]

The price was set on an unused stadium. The stadium was unused to reduce what it was worth. Even SISU said it was hardly worth anything.

The stadium was not unused when it was sold.

 

[skybluetony176]

Exactly so its a nonsense for CCC to say there was no way it was possible for them to sell ACL with a 250 year lease.

Both partners in ACL at the time would have wanted to purchase an extension and there’s no evidence to suggest either the council or Higgs had the appetite to purchase an extension. Unless both partners were in agreement how would it have been possible?

 

[skybluetony176]

FAQs - Commercial leases

Voluntary regulations then. Doesn’t exactly strengthen SISU’s case.

 

[Nick]

Both partners in ACL at the time would have wanted to purchase an extension and there’s no evidence to suggest either the council or Higgs had the appetite to purchase an extension. Unless both partners were in agreement how would it have been possible?

Surely if it would add 30m to the value it would be worthwhile? Also easier to get finance and would be easier for their finances.

 

[italiahorse]

Keep it simple.
An empty glass is just an empty glass even if you extend its useful life.
It’s what goes in the glass that gives it value.
*door closes*

 

[Rusty Trombone]

This is what oldskyblue58 has said in the past about the £1m extension.

Say the value to CCC could be based on the net present value of the additional income streams it would receive from the extended lease. I don't think they would have been receiving much, just a ground rent perhaps. For example the net present value of say £50000 over 250 years at 5% interest is £1m. instead of getting £50k pa they got a one of £1m.

 

[skybluetony176]

Surely if it would add 30m to the value it would be worthwhile? Also easier to get finance and would be easier for their finances.

How would it add £30M on to what they sold ACL for? It’s clear that Higgs at least if not CCC as well wanted shot. Why would they borrow more money to extend the lease when it might not even add value to what they were selling?

 

[thekidfromstrettoncamp]

Can someone point out to me how much Sisu would put in for a 50/50 share of the stadium which they now seem to value at about £47 million ,or do they expect to be given half . Were they not the ones who would not even give a charity £5 million for their half

 

[Astute]

Voluntary regulations then. Doesn’t exactly strengthen SISU’s case.

Renewing your lease: know your rights and don't get caught out!

 

[ccfcway]

tomorrow its likely to get thrown out and then they will consider the further court cases via civil action...

how to make friends and influence people hey !

 

[Grendel]

Renewing your lease: know your rights and don't get caught out!

That’s odd

Property market braces for shockwaves from landmark leasehold case

 

[MatthewWallis]

Can someone point out to me how much Sisu would put in for a 50/50 share of the stadium which they now seem to value at about £47 million ,or do they expect to be given half . Were they not the ones who would not even give a charity £5 million for their half

It would probably be something like they go to the civil courts and try to make Wasps pay the £27m difference, then say they’ll drop the action if wasps give them half.

Of course the above would only ever happen if Wasps thought they were going to lose, which by SISUs track record they won’t be losing sleep over

 

[Astute]

That’s odd

Property market braces for shockwaves from landmark leasehold case

What is odd?

That commercial is different to non commercial? Or is it private freeholders can work differently to public freeholders and try and get more money out of the leaseholders? Which is why that case went to court. It wasn't that many years ago that astronomical amounts were asked for. And the end is coming for builders that sell new housing as leasehold and then sell off the freehold to others. Too much greed got involved like doubling ground rent every 10 years.

But yes. Apples and pears are different.

 

[clint van damme]

Keep it simple.
An empty glass is just an empty glass even if you extend its useful life.
It’s what goes in the glass that gives it value.
*door closes*

for good hopefully.

 

[Nick]

How would it add £30M on to what they sold ACL for? It’s clear that Higgs at least if not CCC as well wanted shot. Why would they borrow more money to extend the lease when it might not even add value to what they were selling?

It did add tens of millions to the value didn't it?

 

[Astute]

It would probably be something like they go to the civil courts and try to make Wasps pay the £27m difference, then say they’ll drop the action if wasps give them half.

Of course the above would only ever happen if Wasps thought they were going to lose, which by SISUs track record they won’t be losing sleep over

You have someone who would have checked every legality against someone who try and find something that looks like it might be wrong to tie the other side up with legal cases.

I know which side my money is on. And it isn't the side I want to come out on top.

 

[Astute]

It did add tens of millions to the value didn't it?

Having two sporting clubs playing in a sporting arena against no sporting clubs playing in a sporting arena made nearly all of the difference.

If you disagree would you like to explain why we moved to Northampton?

 

[Nick]

Having two sporting clubs playing in a sporting arena against no sporting clubs playing in a sporting arena made nearly all of the difference.

If you disagree would you like to explain why we moved to Northampton?

You keep saying no sporting clubs, we were playing there. It wasn't empty.

 

[Astute]

You keep saying no sporting clubs, we were playing there. It wasn't empty.

So why did we move back?

Oh yes the deal was already done. Otherwise we would still have been in Northampton.

 

[skybluetony176]

It did add tens of millions to the value didn't it?

Hasn’t OSB explained the valuations a gazillion times now and how they’re not to be confused with a sale price? It’s fast becoming another SISU are taking millions out of the club urban myth which he’s also explained a gazillion times why they’re not. Suits you to dismiss this one though obviously because the amount of times he’s explained it on the Wasps finances threads in the Wasps sub forum there’s no way you haven’t read it. So congratulations, you’ve joined the rank of the conspiracy theorist. Deliberately and not by accident either I would say.

 

[skybluetony176]

So why did we move back?

Oh yes the deal was already done. Otherwise we would still have been in Northampton.

People were dropping hints about this as early as Easter before it happened on here. I was told privately about it by one poster on here and his source was apparently someone high up at CCFC so there’s no way SISU didn’t know about it.

 

[Grendel]

What is odd?

That commercial is different to non commercial? Or is it private freeholders can work differently to public freeholders and try and get more money out of the leaseholders? Which is why that case went to court. It wasn't that many years ago that astronomical amounts were asked for. And the end is coming for builders that sell new housing as leasehold and then sell off the freehold to others. Too much greed got involved like doubling ground rent every 10 years.

But yes. Apples and pears are different.

So you are saying this solicitor is wrong then?

What To Do When Your Commercial Lease Runs Out- Bird & Co Solicitors

 

[Nick]

So why did we move back?

Oh yes the deal was already done. Otherwise we would still have been in Northampton.

The council meeting approving it was done a month after..