Perhaps the biggest headline proposal to make it easier and simpler to extend a lease / acquire the freehold is that all intermediate leases are to be merged with the superior interest.
It will no longer be up to the claimant to apportion the premium in the offer notice between the relevant landlords; nor on acceptance of the notice, to negotiate the separate premiums payable between the individual landlords.
In normal circumstances, the apportionment may reduce the overall premium by a few percent. However in the case of any claim on the Grosvenor Estate in Belgravia, where the majority of the estate is held by Grosvenor Estate Belgravia [GEB] with a head lease expiring in March 2184, there will be a potential unintended consequence.
There is an accepted minimum discount of 30% to reflect the onerous nature of the escalator clause in GEB’s intermediate lease as determined by the Upper Tribunal in Klaasmeyer [2010] UKUT 69 (LC).
This discount will technically no longer apply as the apportionment will be left entirely between GEB and the Trustees of the 2nd Duke of Westminster Will Trust (that owns the freehold) to fight out between themselves.
It will remain to be seen whether valuers for a claiming tenant will still argue the discount should flow back to the claimant lessee.