Extension of lease- process query and costs

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    Extension of lease- process query and costs

    Hi all,

    New member here so be gentle!

    I am a Leaseholder in a purpose built block of flats on an estate. My flat was built in 1994 and my lease is currently 81 years.

    Last week our estate was contacted by a company who specialises in lease extensions and they initally wrote to us advising that our leases were low at 81 years and that it would be adviseable to extend the lease before it goes below 80 years.

    They were very proffessional, as you would expect, and they stated that should our leases go below 80 years, then the value of our flat would diminish and that it would be very difficult to sell the property.

    They confirmed that they could liase with the freeholder and serve notices to extend the lease. They also stated that if enough of us were to agree we could opt to buy our freehold.

    Lots of us turned up to the meeting and it was a general concencus that we would not be interested in the freehold purchase.

    The specialist lease company stated that our freeholder was a well known multi national asset management company who knew the law and if the process was not done to the letter then it could fall through and the application to extend again would be defered for one year.

    I did some research and my freeholder is indeed one of the largest assest management companies.

    Following this meeting the specialist lease company wrote to me and advised that there would be three stages to this process:

    Stage 1 - Valuation - Cost £245.00 ( or a reduced rate of £195.00) if I reply by next week.

    Stage 2 - Serving initial notices - Cost £245.00 for the specialist company fees, and approximately £450 legal fees and 10% of the proposed lease extension price.

    They advised that the freeholder can serve a counter notice and that there will be a process of negotiation to agree the lease costs. They stated that this may go to an LVT but they stated that they have always sucessfully reach an agreement before this stage.

    Stage 3 - Tranaction - Total fees for this stage would be between £2,500 - £3,000 including their fees of £695 for managing to completion. This excludes the unknown cost of extending the lease.

    This brings the total fees to £3,900 plus 10% of the likely lease cost.

    Please can someone tell me if these fees are reasonable? I also want to know if anyone knows a solicitor who I can contact and can do the job just as sucessfully but cheaper?

    I also approached my Freeholder direct who quoted me £360.00 for an administration fee and a further £834.00 for the freholders costs to obtain a valuation, however they stated that they would be willing to enter into negotiations regarding extending the term of the lease.

    Is it better to liase with the freholder direct? bearing in mind that they are such a large company, who probably knows the in's and out's of the law, or would it be best to go with the specialist company?

    Any help would be very much appreciated.

    Thanks,

    Mark

    #2
    This fee seems rather excessive to me!

    Which company provided you with the quote, where is the flat located and who is your landlord (if you don't mind me asking)?

    If your flat is located in London and you were approached by a well known London based firm like Pemberton Greenish, this fee probably wouldn't surprise me, but I would still advise that you shop around!

    To give you an idea: my firm is based in the West Midlands (although we act for tenants and landlords across the country) and we are what you might call a "specialist" firm, for want of a better term. We deal with both voluntary and statutory lease extensions on a regular basis. Our standard fee for a '93 Act extension is approximately £1300 plus VAT and disbursements. This includes the valuation fee, as we employ our own chartered surveyor, with over 30 years experience in the field.

    There are plenty of other solicitors on this forum who specialise in the field and would, I am sure, be delighted to provide you with a much more competitive quote.

    ... it has just occurred to me that there may be rules against posting fees and the like on this site. If so, I will edit the post accordingly.

    Comment


      #3
      Is this 'specialist' company a firm of solicitors? If not, don't take its legal advice.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

      Comment


        #4
        As a freeholder I have dealt with Leasehold Solutions and have found them very reasonable people to deal with and I am sure their charges are nothing like what is being proposed here

        Comment


          #5
          Thank you all for your input into my situation.

          I have since found a solicitor who can do the whole process for £500.00 and a valuation surveyor to provide a valuation and negotiate on my behalf for £375 plus vat

          Regards,

          Mark

          Comment


            #6
            Originally posted by Mark Pratten View Post
            Thank you all for your input into my situation.

            I have since found a solicitor who can do the whole process for £500.00 and a valuation surveyor to provide a valuation and negotiate on my behalf for £375 plus vat

            Regards,

            Mark
            These are very reasonable charges and I would go along with them. Get the fee being charged in writing.
            Kikuyu

            Comment


              #7
              Originally posted by Mark Pratten View Post
              I have since found a solicitor who can do the whole process for £500.00 and a valuation surveyor to provide a valuation and negotiate on my behalf for £375 plus vat
              That's more like it (but don't forget L's fees too- you have to pay them as well).
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Originally posted by kikuyu View Post
                These are very reasonable charges and I would go along with them. Get the fee being charged in writing.
                I concur with this.
                My costs are higher but I have a specialist surveyor and lawyer.
                Natural selection is a wonderful thing
                You shall know them by their fruit
                Saying "Never say never", says it

                Comment


                  #9
                  Have you thought of asking freeholder for a price 'outside the act'?
                  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


                    #10
                    Its better to organise the leaseholders in the block to make a collective purchase of the freehold title as the "lease" is only a long term rental contract.

                    Comment


                      #11
                      Originally posted by Gordon999 View Post
                      Its better to organise the leaseholders in the block to make a collective purchase of the freehold title as the "lease" is only a long term rental contract.
                      Yes- but, even if they do enfranchise collectively, they'll then still need to extend their leases.
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment

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