Section 60 Costs

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    Section 60 Costs


    I hope someone can assist with my query. I have served a notice to extend my lease. The landlord had had his valuation carried out. They have now sent me a bill. My solicitor says usually these costs are paid on completion but the landlord is demanding it now. Is the landlord entitled to demand payment of the costs before completion.

    Thank you.

    Yes and no.

    In one of my duties as a Company secretary, working on behalf of the leaseholder directors of an in house management company, which has all of the leaseholders as directors and joint freeholders ( not recommended ), and no external agent ( we manage ourselves )

    The freeholder company has no money, never has, as the ground rent total is less than the cost of running the place.
    The freeholder - if it was us, has to borrow money from the directors to pay solicitors, valuers etc, should anyone wish to extend lease, make alterations etc,
    Their money is not unlimited, as some are pensioners not working, and others working don't have spare cash.
    Therefore, as it is not the freeholder that wants to extend the lease, but the leaseholder, I would be asking for payment at every stage as your landlord is doing.

    In our case, I would ask for payment at every stage, because the directors are in effect lending money to the company to facilitate a request of a leaseholder, and the leaseholder can withdraw his application at any time.
    Such requests cannot be financed from the service charge account, as that is for the maintenance and running the company property.

    In the same way I ask for money in advance when a flat gets sold ( transfer of lease / sale of lease, answering questions, forwarding last 3 years of accounts, fire risk assessments copies etc etc. )
    No money in advance, then I don't answer their questions or forward above documentation.
    The lease has already been sold by the freeholder to the first inhabitant, and if the leaseholder wants to transfer the lease, then that is at the leaseholders cost, to pay the freeholders cost in the transaction.

    Up to you how to proceed.


      You should follow the advice from your solicitor. Have you checked the valuation to see if it is correct ? You should not be required to pay for an "incorrect" or "overvalued" figure.


        Originally posted by Gordon999 View Post
        You should not be required to pay for an "incorrect" or "overvalued" figure.
        This isn't correct. A lessee asking for a lease extension is required to pay all reasonable surveyors and solicitors costs incurred by the freeholder.
        If the freeholders surveyors costs are reasonable, the fact that their valuation may disagree with the valuation provided on behalf of the leaseholder is irrelevant - it is up to the two surveyors to argue the reasons for their valuations and reach an agreement.

        As for when costs are paid, this is usually on completion but the freeholder is entitled to ask for 10% of the price you have proposed for the extension.
        You can, of course, agree to pay some, or all, of the costs when they are demanded if this is prior to completion and reasonable (and, especially if the freehold is controlled by a RTM or similar, it could help to show that you have been as reasonable as possible during the process if you eventually have to go to a tribunal to agree the extension price).


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