Negotiating a lease extension

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    #46
    Originally posted by lampshade View Post

    well using the BOE inflation calculator the original GR in 1989 of £90 would now be £228, so at £135 it is much lower than the rate of inflation in that period, and it still has 22 years to run at £135 !! So I would have thought that Lenders would have no problem at a GR of £300 in 2060, as it is only then that it will reach that amount.
    Yes maybe your right, but as of today. Any ground rent over 250 a year and lenders aren't willing to lend as it means the freeholder can take the property if the ground rent isn't paid.

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      #47
      We eventually settled on zero GR and £16.5K premium. Not ideal but the worse thing is, the LH solicitor fees - which I have to pay as we all know - are £2.7K! I really feel I have been totally stitched up. With all costs included, we are talking 22-23K. Will start another thread about fees.

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        #48
        Originally posted by LizLease View Post
        which I have to pay as we all know - are £2.7K!
        Using the informal route you do not "have to" pay the freeholders legal fees.

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          #49
          really? I believe we used the statutory route. This whole process has been a nightmare - I had been warned i am not one to always moan and complain about procedures, society etc. In fact I am a very quiet and docile citizen but I think this whole lease system in the UK is outrageous. It is outdated, a legacy of the feudal system, totally unregulated and open to abuse (no legal frame to set premium and fees, open to “negotiations”). It benefits a handful and racketeers little people like me who save their hard earned cash to pay for the luxury of those leases.

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            #50
            Agreed the system is broken but just be glad you got a resolution.
            Whilst the fees are a bit high , it will only cause you more months of stress if you fight it at a tribunal.
            In these cases it's always best to use a specialist and not a solicitor who has no interest in getting a good deal for the leaseholder.
            Best put it behind you now you've got a decent deal.

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              #51
              If you were to challenge the costs afterwards, almost certainly it would be dealt with as a paper review and is not as daunting as it might seem . The Tribunal generally think that around £350 plus VAT for dealing with the Section 42 Notice of claim and circa £1000 plus vat for the deed of surrender and re-grant is reasonable PROVIDED there are no complications in the title or if there are overriding leases/ head leases in place

              There are numerous Tribunal decisions on Section 60 costs which can be viewed online so you can get a feel as to what is reasonable. Without knowing if there are any particular issues with the ownership of your leasehold interest the fee of £2,700 does seem excessive

              Please do let us know how you get on

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                #52
                Thank you both

                sgclacy, if you are talking about the "deed of surrender and regrant of lease", that is a 10 page document and as far as I am ware, there are no specific issues or complications with it. It's a flat in a 30 year-old small block of flats and there are no odd clauses or anything.

                When I asked for a "breakdown" from the FH solicitor, all I got was 3 lines on an email with "section 60 a/b/c" and 3 different amounts. Which added up to 2700.

                How much does it cost to go to FTT though? I wouldn't do it now as I can't delay the process any further, would need to be addressed after if I have the energy.

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                  #53
                  Does that include the surveyor fee ?

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                    #54
                    No, the surveyor fee was in addition, £1020!

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                      #55
                      That would probably be deemed acceptable by the Tribunal, but that is at the very top end of the acceptable range - as you lease was below 70 years there would be some time spent on calculating and arriving at the marriage value

                      There is a lot to be said for having prescribed rates and the issue of marriage value will I am sure be abolished as it does create an opportunity for those valuing to spend time seeking comparisons and thinking about what happens in a no act world - all done of course at your expense

                      However, it seems very likely that the deferment rate would be lowered from say 5% to 4% which would make the premium about the same, BUT the valuation would be so much easier.

                      I say this as a freeholder, I do think the freeholder should bear their own costs on a lease extension particularly if the interest was acquired post 1993 when enfranchisement and compulsory lease extensions was known at the time of purchase - a landlord should not need counselling to get over the trauma of receiving a Section 13/42 notice - it most cases it provides a good profit

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