leasehold extension costs

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    leasehold extension costs

    I have been quoted below to extend the lease on my flat, I have no idea whether these costs are good/bad/indifferent, any advice/opinion much appreciated...

    Fees required to commence:



    £250.00 lease extension fee

    £660.00 Lease extension valuation



    Total £910.00 inc.



    Once the valuation has been received we will make an offer of a 90 year lease extension to you, legal fees of £500.00 plus VAT plus disbursements is then payable, plus the lease extension premium, prior to completion.

    #2
    Please remove the names of the two businesses from you posting.

    Comment


      #3
      With the exception of the £250 'lease extension fee' (which is money that your freeholder, or the managing agent, will be receiving for doing basically nothing), I would say that these costs are fairly typical.

      You might find surveyors/solicitors that will act for you for slightly lower amounts, but the freeholder is under no obligation to seek the cheapest quotes for these services.

      The £250 fee may be mentioned in your lease, or in the standard charges of the managing agent. If not you might be able to argue that they are unreasonable (although it would probably cost more in tribunal fees and time to challenge them, so it's not likely to be worthwhile unless you also wish to challenge the premium they ask for the extension).

      Most typically fees like these would be payable on completion of the extension, or if you withdraw from the process.

      Comment


        #4
        tell us about your property, we can give you an idea of what the lease extension should cost, you can then turn things the other way and make an offer to your freeholder. Q1 how many years left unexpired on the lease. Q2 what is your ground rent, is it at a fixed amount or does it increase over time and if so on what basis Q3 If you had a very long lease what would your flat be worth, free of disrepair

        Comment


          #5
          the trouble with what your landlord's managing agent has said is that if you do not like their offer and decide to serve a s42 claim for a new lease under the act, you will then be liable for more costs by statute under the claim...

          Comment


            #6
            You can get a free guide to the procedure for statutory 90 years lease extension by download from LEASE website ( www.lease-advice.org )

            Are you above or below 80 years unexpired remaining on the lease ?

            Some local estate agents have a surveyor working in their office who may offer their services for lease extension.

            You can visit one or two surveyors and ask for a quote for their service ( whilst you are talking , you can ask if it is normal to pay £910 at the start ? ).

            Comment


              #7
              Lease's estimated premia are too low, they have failed to adjust them following various key decisions which have increased what previously was perceived to be the value of lease extensions, particularly at the shorter maturities. They need to be increased by about a third to a half to get to the correct figure. Lease has used FTT decisions in its database but rather ridiculously doesnt alter them when the premia goes up on an appeal decision. Appeal decisions typically do push premia north, not south.

              I think reading between the lines, by the sound of it your landlord( c/o of the managing agents) concerned is not going to offer you any great bargain and hence you may as well serve a formal s42 notice so that there is no risk of you having to pay these costs quoted for an informal lease extension, and then again uder the formal mechanism if no deal is agreed. Sometimes landlords are very pragmatic but in other cases, the landlord's agents have a different agenda. ie to maximise its fees! Even if you commence by serving notice you may well settle informally outside the formal mechanisms of the Act, this actually happens in at least 95 per cent of cases.
              . It is quite normal to serve a notice of claim at around a half of the real value of the lease extension. In theory your claim is meant to be at a realistic figure but in real life unless a completely ridiculous amount is offered such as £1000 it will not invalidate your claim to start fairly low.

              I would suggest if you go to a halfway decent local solicitor who is expert or at least familiar with enfranchisement he may well direct you to a surveyor who can assist. In my experience local landlords get used to dealing with local surveyors who work in this specialism and a deal ends up getting done. Less than 5% of cases go to Tribunal, To do so is expensive and time consuming.

              Comment


                #8
                Originally posted by Gordon999 View Post
                You can visit one or two surveyors and ask for a quote for their service ( whilst you are talking , you can ask if it is normal to pay £910 at the start ? ).
                If a lease extension is pursued using the statutory process for a 90 year extension at a peppercorn ground rent, the leaseholder makes an offer of a price and the freeholder can then require 10% of the amount offered in advance.
                It would be normal for the surveyors/solicitors fees to be paid on completion but the leaseholder has little control over what the freeholders surveyor/solicitor charges as long as it is considered 'reasonable' (expect to pay at the higher end of a 'normal' range of fees).

                If an informal lease extension is sought, I would see no reason at all why the freeholder couldn't say that they will require fees paid in advance.

                As flyingfreehold has suggested, it is probably safer to follow the official route to avoid the possibility of being charged more in fees if an agreement isn't reached via informal negotiations.


                Comment


                  #9
                  get your lawyer to serve your claim in order to unilaterally create the contract, then negotiate informally...............

                  Comment


                    #10
                    tell us about your property, we can give you an idea of what the lease extension should cost, you can then turn things the other way and make an offer to your freeholder. Q1 how many years left unexpired on the lease. Q2 what is your ground rent, is it at a fixed amount or does it increase over time and if so on what basis Q3 If you had a very long lease what would your flat be worth, free of disrepair

                    Q1. the lease is/was 99 years from 1 January 2001
                    Q2. It is a peppercorn rent?
                    Q3. roughly around £80000

                    Comment


                      #11
                      If you use the calculator posted on LEASE's website : https://www.lease-advice.org/calculator/

                      With 80 years still remaining on the lease , the estimated cost to pay comes to around £ 2000 plus costs.

                      But if you allow the lease to fall below 80 years, the estimated cost will be increased by 50% of the marriage value

                      Comment


                        #12
                        I spoke to a solicitor last week and he suggested going down the informal route, said that the extra legal costs for going the formal route would be too high does this sound right?

                        Comment


                          #13
                          Here is some cost information posted on the moneysupermarket website based on property valued at £200,000 :

                          https://www.moneysavingexpert.com/mo...nd-your-lease/

                          Also on the LEASE website , see item 9.3 for statutory extension at 95 years ( no marriage value ) the cost comes to about 1.5% of the market value:

                          https://www.lease-advice.org/advice-...ion-valuation/

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