Managing Agent/ Freeholder making unreasonable charges to allow extension to property

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    Managing Agent/ Freeholder making unreasonable charges to allow extension to property

    Hi all. This is my first time on this forum and hope somebody can assist me with an issue I have recently encountered.

    My partner and I are at the early stages of planning for an extension to our leasehold property. We have recently been in contact with the managing agent for the freeholder to make them aware of this intention and to share the drawings. However the managing agent has responded to confirm that if this were to be agreed by the freeholder then this would mean they would have to draft a deed of variation to alter the terms in manner which allow for such alterations to take place. They also confirmed that historically, the freeholder has accepted fees in the region of £5,000 plus reasonable legal and surveyors fees for the drafting of the Deed of Variation.

    The relevant para within the lease is: “that the Purchaser will not erect or permit to be erected or placed upon the demised land at any time any other buildings or structure unless the same shall as to the materials situation elevation and general plan thereof be built or rebuilt according to plans and elevations first approved by the Vendor or its Surveyor”.

    I am a little confused around this as I cannot see any reference to any costs associated with this in the lease and it feels like this figure may have been plucked out of the air. The lease doesn't appear to contain anything specific in relation to the current layout of the property and I would have thought that as per the para above their options would simply be to agree or not agree with our request (and from what I have seen from looking this up 'the freeholder has to have a good reason for not giving consent to alteration'). We still have 930+ years left on the lease so that doesn't appear to be an issue.

    I did think the best way to bypass this issue was to go down the route of asking to buy the freehold. However the response I received was that the freeholder is not currently looking to dispose of their interest within the estate and so is not actively taking offers.

    My questions therefore are:
    What are my options for challenging this (without having to meet expensive legal costs)?
    Do you think I need to agree to have a 'Deed of Variation' produced?
    Would I be with my rights to challenge the figure they are asking (in relation to reasonable costs) and what is a reasonable cost for this work.

    I have spoken to a number of neighbours and friends who have had recent leasehold extensions and none of them have very heard of this practice before.

    Many thanks in advance for your help with this one, its much appreciated.

    #2
    If this is a house, you should buy the freehold, and then you can do what the planning dept allow.
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    Comment


      #3
      The charges are unreasonable, I cannot see how the freeholder can justify charges of £5,000 plus legal fees and plus surveyor's fees.I suggest that you ask the managing agent why a Deed of Variation is necessary. Are the service charges allocated according to the size of the apartments which will mean that any extension will result in a change to the proportion of costs charged to each leaseholder?

      Comment


        #4
        I actually live in a 3 bedroom house, and don't pay a service charge. I pay £8 annually for ground rent and cannot understand why an increase in the size of the property would mean that we have to have a amendment made to the Deed of Variation. Thanks I just needed for somebody to get back to confirm I hadn't missed anything here.

        Comment


          #5
          It seems to be another example of unreasonable charges being levied upon a leaseholder, the problem is that you are unlikely to receive approval without paying the unreasonable demands, I suggest that you contact your MP. You could also try contacting the LKP which may be willing to take up your case,

          Comment


            #6
            Hall22,

            Just buy out the freehold as post #2 formal route, probably cost you less.

            Comment


              #7
              I did think the best way to bypass this issue was to go down the route of asking to buy the freehold. However the response I received was that the freeholder is not currently looking to dispose of their interest within the estate and so is not actively taking offers.

              Comment


                #8
                It doesn't matter if he wants to sell or not you have the right to enfranchise if certain criteria are met. Best speak to a specialist in the field.

                Comment


                  #9
                  Hall22 by law u r entitled to purchase ur freehold, irrespective if the freeholder wants or not to sell is freehold interest.

                  get a solicitor to initiate this for u. U will need a surveyor to do a valuation. With £8 annual GR + 930 yrs left on the lease, I do not think that the premium will be high. The LEASE website contains a calculator that will give u a rough estimate as to what the premium might be. Use this as a guide, then a RICS surveyor should confirm what premium to offer in the notice.

                  Comment


                    #10
                    I cant tell you the exact cost but it will be less than £5,000 to acquire the freehold. As regards these rapacious terms, all I can say is that some cheeky bar stewards have bought freeholds and they are so unreasonable that they have given reasonable freeholders a bad name. Buy them out by the statutory route (your solicitor will prepare a section 13, on behalf of a qualifying majority of lessees) and hopefully you'll get matters settled. Probably allowing for all the costs to be borne it will cost about £3500 to 4000 to acquire the freehold

                    Comment


                      #11
                      The purchase of freehold title for house with 930 years lease and £8 p.a ground rent can be decided by FTT ( First Tier Tribunal)..

                      In recent years, the price on 999 years lease has been set at 18 years x Ground Rent = 18 x £8 = £ 144 . But there are some extra legal charges to pay but FTT can limit the charges if your application includes fixing the legal charges payable.

                      Comment


                        #12
                        The website at www.lease-advice.org keeps records of past cases determined by LVT /First Tier Tribunal ( Property Chamber ).

                        Look for eastern region , 1967 Housing Act + CAM/33UG/OAF/2016/0001

                        The lease was 999 years and GR £5 p.a and FTT priced at 16.6 times £5 = £83.

                        Comment


                          #13
                          Hi all and thanks for all the feedback I have received to date.

                          I am however still a little confused though. I spoke to the managing agent about purchasing the freehold and they confirmed they did not see this as an option unless I were to offer a significant offer well in excess of £5,000. I therefore decided to start down the route of enfranchisement.

                          I have spoken to a surveyor about this and did receive the following which I believe reads that I may be able to get my freehold through this route but the current freeholder could still be in a position to approve any amendments to the property (with associated costs attached). This does appear a little strange and would be grateful if somebody could provide extra information in relation to this. Not sure why I would go down the route of enfranchisement if I would then also have to pay costs to approve my extension?

                          Response from Surveyor:
                          Assuming you qualify, you are legally entitled to enfranchise your leasehold interest and obtain the freehold; however this would not in some circumstances release you from requiring the freeholder’s consent with consequent costs.

                          The surveyor has also suggested the best route would be to go back to the managing agent to try and negotiate a reduced premium to include all fees and not to go down the enfranchisement route. I do feel like I am going in circles with this one.

                          Thanks and hope you can help?

                          Comment

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