Initially created by the
Housing Act 1980 which transferred jurisdiction from the
Lands Tribunal (a superior tribunal of
England and
Wales), functions were expanded by the
Leasehold Reform, Housing and Urban Development Act 1993 and the
Commonhold and Leasehold Reform Act 2002.
Lease extension One of the earliest functions of the LVT was to determine disputes concerning the extension of leases. One of the drawbacks of owning a flat on a long lease is that it reduces in value over time. The less time is left on the lease, the less valuable the property becomes. Because of this, the law (the Leasehold Reform Housing and Urban Development Act 1993) gives the leaseholder the right to extend their lease once they have owned it for two years. Historically, when a
lease ran out the property held thereunder would revert to the possession of the landlord/freeholder. In this case, the job of the leasehold valuation tribunal was to hear evidence from both sides as to what the long leasehold value of such a property would be and to determine what proportions of the value of the said property should rightfully be ascribed to leaseholder and the freeholder under the legislation. Generally, such evidence was given by an
expert witness for each side who will argue that a particular value is more applicable based on an analysis of recent sales of comparable properties around the date that the Leasehold Notice was served. In many parts of the UK there are substantial freeholders who historically have owned and continue to own large land holdings, and this ownership has been and continues to be passed under leased ownership to sub-landlords and leaseholders; this system was particularly suitable when areas of
London were initially built on greenfield land, and later in the period immediately after the Second World War, when considerable renovation and rebuilding was urgently required, the estates were able to effectively subcontract redevelopment to sub-landlords, known as head-lessors. The most notable
London estates are those of the
Crown Estate, the
Duke of Westminster,
Earl Cadogan, and
Lord Howard de Walden; with the changes in legislation these freeholders are now obliged to sell lease extensions under the various
Acts of Parliament which have been passed at prices agreed by negotiation or determined by a leasehold valuation tribunal. Appeals against decisions of a leasehold valuation tribunal are made to the
Lands Tribunal. ==Composition==