Schedule 4 - Determining and sharing the market value Part 6: Entitlement Of Eligible Persons to Shares of the Market Value
Part 6 is concerned with the apportionment of the price which has been determined under Parts 1 to 5 of Schedule 4. It provides that the price should be paid on a pro rata basis to all persons whose interests have been devalued or lost as a result of the enfranchisement claim.
	Paragraph 30 provides that where there are two or more eligible persons, each is entitled to be paid a share of the price. The share that each person is entitled to is determined using the formula provided, which involves taking the market value (calculated under Parts 1 to 5 of Schedule 4) and multiplying it by the total of that person’s loss divided by the total losses suffered by all the eligible persons.
	Paragraph 31 defines an eligible person for freehold acquisition claims (or houses or blocks of flats) as a person who has had the whole (or part) of their interest acquired in the claim. The paragraph also sets out that the eligible person’s qualifying transaction is the acquisition (in whole or in part) of their interest.
	Paragraph 32 defines an eligible person for the purposes of lease extension claims, as a person: (1) who has granted the extended lease out of (the whole or part of) their interest; (2) who has had their interest deemed surrendered and regranted as a result of the claim; or (3) who is the landlord under an intermediate lease which is varied as a result of the lease extension under paragraph 12A of Schedule 3 to the LRA 1967 or paragraph 12 of Schedule 11 to the LRHUDA 1993. The paragraph also sets out that the eligible person’s "qualifying transaction" is the grant of the extended lease or, where applicable, the variation of the intermediate lease.
	Paragraph 33 sets out how to determine what loss is suffered by an eligible person. Subparagraph (1) provides that their loss is the combination of any loss they suffer as a result of their qualifying transaction, and any other loss they suffer resulting from the reduction in value of any of the interests they own as a result of the enfranchisement claim. For example:
A qualifying tenant of a flat extends their lease by 990 years. Their immediate landlord (the "intermediate leaseholder") has 150 years remaining on their lease. The extended lease is granted by the freeholder, and the intermediate leaseholder’s lease is deemed surrendered and granted (and is subject to the extended lease).
The intermediate leaseholder is an eligible person, as their interest has been deemed surrendered and regranted. The qualifying transaction is the deemed surrender and regrant of their intermediate lease.
The loss they have suffered as a result of the deemed surrender and regrant is: (1) the qualifying tenant will no longer pay any ground rent to them (as the extended lease is granted for a peppercorn); and (2) they will not recover possession of the property at the end of the qualifying tenant's lease (as the extended lease is now longer than their intermediate lease).
The freeholder is also an eligible person as the extended lease has been granted out of their interest. The qualifying transaction is the grant of the extended lease out of their interest. The loss they have suffered is that they will not recover possession of the property following the expiry of the intermediate lease in 150 years, but only have a right to possession when the extended lease expires (in 990 years or more).
	Subparagraph (2) provides that no marriage value or hope value is taken into account when each eligible person's loss is calculated, by requiring assumption 2 to be made in that calculation. Assumption 2 is set out at paragraph 17 of Schedule 4. Marriage value is the additional value that may arise when the landlord’s and the leaseholder’s separate interests are joined into single ownership. Hope value is the additional value that may arise from the potential for marriage value to be realised in the future.
	Subparagraph (3) sets out that an eligible person cannot increase the value of their interest (and so increase the amount of loss they suffer) by entering into any transaction after the qualifying tenant's claim is made which involves the creation or transfer of interests (or any alteration of the terms of interests) superior to the qualifying tenant's interest.
	Paragraph 34 defines specified terms used in Part 6 of Schedule 2.