Mountview Estates plc v W8 Property Ltd [2026] UKUT 196 (LC) provides important guidance on how the condition of a flat should be treated when assessing the premium payable for a lease extension under the Leasehold Reform, Housing and Urban Development Act 1993 (“the 1993 Act”)
Background
The case concerned Flat 9, Kensington Court Gardens, a substantial but long-neglected flat described by both parties’ valuers as “uninhabitable”.
The dispute arose in the course of determining the premium for a statutory lease extension. The key issue was the freehold vacant possession value of the flat, and specifically how its physical condition should be reflected when adjusting comparable sales.
At first instance, the First-tier Tribunal preferred the tenant’s valuer’s approach, which applied deductions to comparables to reflect the flat’s condition. The landlord appealed.
The legal issue
The appeal raised a deceptively simple question:
How should a flat be valued where it is in poor condition but subject to a tenant’s covenant to keep it in “good tenantable repair”?
The parties agreed that, for valuation purposes, it must be assumed that the tenant has complied with that covenant. However, they disagreed as to what that assumed condition meant in practice.
The competing valuation approaches
The landlord’s valuer argued that “good tenantable repair” required a condition broadly comparable to modern, well-maintained flats in the area—effectively assuming a reasonably updated and readily occupiable property.
By contrast, the tenant’s valuer contended that the covenant to repair does not require modernisation, and that the flat should be valued in a relatively basic, unmodernised condition unless there is evidence of actual disrepair.
The First-tier Tribunal preferred the latter approach.
Decision of the Upper Tribunal
The Upper Tribunal dismissed the appeal and upheld the First-tier Tribunal’s valuation.
The Tribunal emphasised several key principles:
- Repair is distinct from modernisation
A covenant to keep a property in repair does not require it to be modern, efficient or in line with current market expectations.
Outdated fittings, inefficient systems, or lack of modern amenities do not in themselves constitute disrepair.
- No obligation absent physical deterioration
The obligation to repair arises only where there is actual damage or deterioration.
In this case, there was no evidence that anything in the flat was broken or non-functional, despite its neglected appearance.
- “Uninhabitable” does not necessarily mean out of repair
Significantly, the Tribunal accepted that a property can be described as “uninhabitable” yet still be in “good tenantable repair”, depending on the cause of that condition.
The absence of decoration, outdated fixtures, or general neglect does not necessarily breach a repairing covenant.
- Assumed condition for valuation purposes
Accordingly, when applying Schedule 13 of the 1993 Act, the correct assumption is that the tenant has complied with the repairing covenant—but only to the extent that repair (not improvement) is required.
The Tribunal rejected the landlord’s attempt to “uprate” the flat’s condition to something approaching modern standards.
Practical implications
This decision provides important clarity for enfranchisement valuations:
- Valuation assumptions should not import modernisation standards into “good tenantable repair”.
- A landlord cannot argue for a higher premium by assuming a condition better than that required by the lease covenants.
- Conversely, tenants cannot rely on their own disrepair—but only where actual disrepair is evidenced.
- The case reinforces the fundamental distinction between repair, improvement, and market expectation.
Mountview v W8 Property is a reminder that valuation under the 1993 Act is grounded in strict legal assumptions rather than market perceptions. For practitioners, it highlights the importance of carefully evidencing the existence (or absence) of disrepair and avoiding the temptation to equate “good condition” with “modern condition” when making assumptions about condition in valuations for lease extension premiums under the 1993 Act.
Chris Macartney is the Joint Head of the Bishop & Sewell expert Landlord & Tenant team.
If you have a query concerning leasehold property, then please contact the experts at Bishop & Sewell’s Landlord & Tenant team: email [email protected] or call 020 7631 4141.
