Cost to Serve a Section 42 Notice?

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    Cost to Serve a Section 42 Notice?

    Hello there,

    I am the owner of a leasehold maisonette (with 77 years remaining on the lease) that I am in the process of selling.

    I have found a buyer and she is aware of the lease term and the approximate cost of a voluntary extension with the freeholder a group of leaseholders are trying to negotiate (£3500 + legal costs).

    Abbey National/ Santander who are providing her mortgage are asking questions about the lease (how much it will cost to extend/ are there any restrictions to that and who the freeholder is etc.). I have triedd to answer to the best of my knowledge, but I am now worried they could possibly pull out of the sale as if it was forced to go the statutory route it would take them 2 years before they could extend which would make it even more costly for them than the higher premium of the voluntary route.

    I am looking ahead and trying to think of possible solutions to this scenario (it is very important I move, but I cannot take a lower price than I have already accepted - it came down £15k from the original asking price).

    If I served a Section 42 Notice on the freeholder which I then transferred the rights to on completion so that my purchaser could then extend straight away, does anyone have an idea how much this will cost? I was quoted £2k (including the notice and my and the freeholders legal fees) by a solicitor which I couldn't afford. Does it have to cost this much, or is there a more low cost way of still effectively serving one?

    This is the 1st time I've sold so I'm very new to all the processes!

    Thanks very much in advance,
    Julia

    #2
    Anyone one please??? My buyer (3 months down the line) is now requesting I serve this notice and assign the right on completion to her.

    How much is this likely to cost & how long would it take?

    Kind regards,

    Comment


      #3
      Originally posted by TheCatsWhiskers View Post
      Anyone one please??? My buyer (3 months down the line) is now requesting I serve this notice and assign the right on completion to her.

      How much is this likely to cost & how long would it take?

      Kind regards,
      Service of the notice should take a week or so to prepare and serve and cost around £300 to £500, more if you have a formal valuation.

      Can you not speak to the board and say that

      we have agreed £3500, I have given my undertaking for costs, can you not write to your solicitor asking them to prepare a Deed of Variation changing the lease length, Monday am?

      If they do not have a solicitor and you have a mortgagee this may take a little longer than the buyer is prepared to wait, so you may have to resort to the Notice. Again this should take no more than a week but if you have amortgage then getting their consent can take a while.
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        Thank you for that. I don't have a mortgage, so that sounds like one bonus. My proposed purchaser is seeking a mortgage, however.

        Do you mean apply to the board of the Management Company (us the residents)? We aren't share of Freehold, my immediate underlease is held by the management company (management company has no funds other than our service charges). The Management Company, then have a 'head lease' owned by an outside freeholder. It's a complex set-up, but it's he who has to grant any extension of our leases.

        Have I misunderstood anything? I have no further funds to spend on serving any notice unfortunately, I would have to ask my purchaser to fund that. They already, 3 months in suddenly dropped their offer by £5.5k because of the lease even though they'd been told 3 times in the 1st week, before and after their offer how much it would cost to extend (have a formal offer in writing from the freeholder which I quoted, and later gave proof off. They then 'accepted' an offer of £2k less (the most I can possibly afford to drop) .... And a further month on, this request.

        The voluntary route is already far along being implemented by the interested leaseholders, the initial valuations etc have been done and the interested leaseholders have appointed a lawyer to advise and oversee. They are all doing our own separate lease extension, but have collated our efforts to reduce our legal fees, so have approached the freeholder etc en masse.

        If it wasn't for my cat I'd just see the process of extending it out, then sell.

        Comment

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