Loss of sale following unreasonable fees request from new freeholder

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    Loss of sale following unreasonable fees request from new freeholder

    My daughter's flat sale has fallen through after the new freeholder sent his fee requirements to the prospective buyer's solicitor. The lease requires notice fees of £10 plus vat for assignment and mortgage. The freeholder says he requires £250 for each plus another £250 for a deed of covenant which is not required in the lease. When challenged his answer is just that those are its requirements. He also wants £250 for consent for a lodger plus a deed of covenant and another £250 from the lodger. The buyer also asked about a fee for having a pet as there is a need for freeholder consent under the lease. £2000 was quoted and when questioned on the reasonableness of the amount he just said we won't consent if the fee is not paid. Consent for an extension was quoted at a minimum £5000 plus legal costs. Given the freeholder's attitude the buyer decided to withdraw. My daughter is obviously worried that any buyer will be put off by such demands. Equally she doesn't want a dispute with the freeholder as that would have to be disclosed to potential buyers.
    Any advice?

    #2
    Abuse by a freeholder (or a majority lessee) to prevent lease sales at market price is a key mode of fraud in the freehold sector. Often the freeholder will then buy price-depressed properties (where they themselves have caused that price depression). A lot of things that sould be completely illegal - are not.

    However I think if a freeholder provides frankly false information to prospective purchasers about the nature of the lease, that should be a matter for the FTT. The problem is a) Under what heading -- probably appointment of a freeholder and b) asking about correct procedure will further inhibit a sale in the manner you suggest.

    Corruption all round.

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      #3
      I would start with solicitor's letter to the freeholder to point out couple of lines in the lease and then you have incurred the cost of loosing a sale due to the uneasonably high fees.

      However I would leave it at that - as going to FTT would be a red flag for prospective buyers.
      However you could always rent.

      Please do write to your MP and bring this case and ask why do you pay n amount for something where you have no control what soever

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        #4
        I am very sorry to hear of this abuse of process and really you ought to be able obtain some satisfaction against these people who bring ignomy to those who run their freehold management professionally and fairly.. I think it would be worth an application to the FTT but be guided by others more familiar with Tribunal referrals. I tend to settle and haven't been to Tribunal more than three times in as many decades; and always in relation to valuation not conduct issues

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