In some cases the leaseholders’ immediate landlord will not be the competent landlord for the enfranchisement process. Instead it will be an intermediate landlord who may have a lease that is only a few days superior to that of other leaseholders so it will shortly be ending. In this situation there is either no reversionary value or the amount is so small that it can be disregarded. If it is regarded however then the value of the reversion will represent the reduction in the competent freeholder’s interest.

Applying this to the original example and disregarding any ground rent paid by the intermediate landlord to the freeholder, the diminution in the two interests would be (figures rounded down):

  1. The intermediate landlord (the loss of the rent) = £620
  2. The freeholder (the delayed reversion) = £880

The overall reduction in the value of the landlord’s interests would be the same from the leaseholder’s point of view but the £1,500 total would be divided between the two landlords.

Marriage value (if applicable) must also be split between the two landlords. This must be in proportion to the amounts by which their individual interests are diminished, in this case apportioned to a ratio of 620 to 880: Using the example, where the landlords’ share of the marriage value was calculated at £6,750 the distribution would be:

  1. The intermediate landlord – £6,750 x 620 divided by 1500 = £2,790
  2. The freeholder£6,750 x 880 divided by 1500 = £3,960

This makes the leaseholders ‘premium’ between the landlords of:

  1. Intermediate Landlord – diminution in interest of £620
  2. Share of marriage value of £2,790 + £620 = £3,410
  3. Freeholder – diminution in interest of £880
  4. Share of marriage value of £3,960 +£880 = £4,840
  5. Total Premium = £8,250


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