cost to interpret lease terms

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    cost to interpret lease terms

    Hi,

    I live on the first floor of a block of flats, i want to build on top of the ground floor flat. I am told by our managing agents that the roof of the ground floor belongs to the freeholders. The ground flat has a leasehold only.

    There are 10 flats in total of which 7 have a share of the freehold, of which my flat has a 12% share. All the flats pay an equal share of the service charge.

    So what i want to know is would i have to pay for the additional area that will be added to my flat although i am not technically building on additional land if that makes since, i am building onto of an existing ground floor flat.

    Any help and advice would be much appreciated.

    thanks

    Mo

    [/LEFT]

    #2
    The freeholder owns the site and the area. You as a leaseholder, are an entirely separate legal entity to the freeholder even though you might be a joint owner shareholder or member.

    Should you wish to acquire the area then the freeholder could sell it to you, the figure being based on the increase in value to your home, less construction costs.

    The freeholder would then disburse the proceeds by whatever means they have agreed and you in turn would receive your share.

    The service charge figures would also be adjusted to reflect your greater floor area and proportion to expenses to maintain and insure the building, and your lease amended to show the changes in layout and responsibility.
    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


      #3
      Hi,
      Thanks for your reply. Clearly there will be legal work involved for my flat to take account of the new layout, would there be any changes made to the overall freeholders or management company. I guess what i want to know is will i have to pay any legal costs for the freeholder or management company as well.

      What is the best way to approach this are what type of solicitor should i be looking for to carry out this work in terms of their experience etc. I there anything i can do to keep the costs down both in legal terms and from the freeholders point of view.

      Is there a set formula used to calculate the cost of the area?

      cheers

      Mo

      Comment


        #4
        The freeholder has no compulsion to sell you the area you need
        to extend your flat. So don't complain if freeholder says no, you
        cannot change the layout of the building.

        You want to build on someone elses roof, so you need their
        permission to rip off their roof, as roof beams may need replacing
        as they only need to be strong enough to support a roof, and
        not a building with furniture in it.
        So roof beams may need replacing with thicker beams.

        The freeholder is entitled, and realy must get a freeholders
        surveyor to look over your plans, for which you will be charged
        for, to ensure everything is above board.
        Freeholder can still say no after you have paid him for his
        surveyor.

        You will be responsible, of couse, for all the brick work etc, and
        new roof, and your cost to repair and maintain, and the lease will
        have to be changed, or a deed writen to show the freeholder is
        not responsible for your maintainence costs.

        Yes, any costs incured on the freeholder to process your application,
        would normally be your cost to pay.

        I assume you do not have authorisation from the freeholder yet ?
        and it would be wrong of him to give authorisation without
        professional assistance.

        R.a.M.

        Comment


          #5
          It is customary to pay for the FM/Man CO's costs, and I suspect in this case it might be cheaper to do a surrender and grant of a new lease, rather than a deed of variation to the plan the demise and service charge proportions.

          Ram has made good points, principally in gaining the support of the GFF who are living under a building site and will want assurances on noise. The upside is that an older roof may be being substituted with a new one on the extension.

          Most importantly you will need to do investigations to look at the load bearing and tying in of structure.

          There is no formal as it is as posted a negotiation between the increasable in value to your home less construction costs. Alternatively some may agree that you take on the costs of a project instead, external decoration a new roof or a refurbishment of common parts, avoiding CT or CGT.
          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


            #6
            Hi,
            So let me understand this better, the formula used is:
            current property value £100,000
            property value with extension £120,000
            cost of build £20,000
            payment to freeholder for the additional space = £0

            is this correct or can the freeholder ask for any price they want. Would this be a deed of variation to my lease only to account for the new layout and also register with the land registry.

            What sort of cost am i looking for to have the legal work carried out and the registration with the land registery.

            thanks

            Mo

            Comment


              #7
              Originally posted by gomo View Post
              Hi,
              So let me understand this better, the formula used is:
              current property value £100,000
              property value with extension £120,000
              cost of build £20,000
              payment to freeholder for the additional space = £0

              is this correct or can the freeholder ask for any price they want. Would this be a deed of variation to my lease only to account for the new layout and also register with the land registry.

              What sort of cost am i looking for to have the legal work carried out and the registration with the land registery.

              thanks

              Mo
              Please re read my posts rather than cram it into your "terms"

              If the build cost matches the increase in vlaue than there is no financial incentive to give consent. This is where the negotiation, not a formula, become more complicated where the applicant offers more on the basis that they will accrue the compound benefits of increases in value over the years. While they can ask for any figure it had to make commercial sense if they are to benefit from it rather than have the project abandoned.

              I would budget at least £2000 to £2500 plus disbursements and VAT.
              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


                #8
                thanks for your prompt response.

                Comment


                  #9
                  Meaning of clauses in lease

                  Hi,

                  I am looking to build an extension at my block of flats where i have a share of freehold.

                  Can someone pls tell me what the following clauses refer to in my lease from a legal prospective. Does this prevent me from building an extension all together?

                  Clause 3(c)provides that the that the lessee covenants "not to make any structural alterations or structural additions to the premises or any part thereof nor to erect any new buildings thereon nor to remove any of the landlords fixtures without the previous approval in writing of the lessor"

                  Paragraph 2 of the Fourth Schedule stipulates that the lessee is "not to do or permit or suffer to be done in or upon the premises or any part of the Reserved Property anything which may be or become a nuisance or annoyance or cause damage or inconvenience to the Lessor or to any owner lessee or occupierof any other premises on the Estate or dwellinghouses in the neighbourhood and to pay all costs and expenses incurred by the Lessor in abating a nuisance in compliance with a notice served by any competent authority."

                  thanks for your help

                  Mo

                  Comment


                    #10
                    Th lease is irrelevant. It is not your land to build on. The lease is only relevant to the extent that you alter the flat for whatever purpose.

                    The freehold is owned by a company in which you have a share or are a member of , or it is owned jointly between several individuals. The company or group will have to decide to sell that land to you.

                    There is no such thing as share freehold.
                    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


                      #11
                      Hi,

                      Thanks for getting back to me. So basically i need permission from the freeholder which is our association. Also. does this normally have to be a majority vote?

                      Comment


                        #12
                        No you need to get them to agree to sell the land to you, not just permission

                        As it will increase the value of your flat, it follows that the freeholder is entitled to some of that to compensate for the loss of that land and its value to you. That is distributed between the freeholders.

                        It would be by majority vote, though the addition of some cash might sway the votes.

                        Dont forget that you will have to amend your lease and lease plan, % contributions to service charge and insurance and will need the lenders consent.
                        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


                          #13
                          Hi,
                          I would like to have a structural survey carried out to make sure the current foundations can support another floor above. In order to the carry this our there will have to be a 1 or 2 pits dug close to the existing wall.

                          My freeholder has asked that i pay for legal advice before i can dig any trial pits for the survey. I don't see what legal advice is required here. The builder will have their own liability insurance to carry out the work, i.e. trial pit. Surely i need permission from the directors, which i am 1 of 4 and thats it.

                          Also it has been pointed out that the leaseholder below may stop me from putting up an scaffolding to carry out the extension, as they only have a lease can they do this, or is it only the freeholder who can dictate this.

                          thanks for your help

                          m

                          Comment


                            #14
                            You want to dig holes / pits in land that you do not own.
                            You need the freeholders permission to do this.

                            So that the freeholder is not encumbered with taking legal advice and
                            telling you, you cant dig holes, and giving lega lreasons why not, he
                            has requested you get legal advice as to what you can and cannot do.

                            If all the Directors are the ones who make decisions regarding the freehold.
                            then if they are not qualified to understand the lease, then you will have
                            to get legal advice.

                            R.a.M.

                            Comment


                              #15
                              Hi RAM,

                              Thanks for your reply. I have asked the directors with regards to digging the inspection pits. However they have said that i must pay for them taking legal advice with regards to the dig. I don't understand what legal advice they hope to gain. The builder digging the pit will have liability insurance, as far as i am concerned this work is like any other work we have carried out on the building by other service providers.

                              I have said i am happy to pay for legal advice once i am certain the the foundations are found to be suitable to support another room above.

                              thanks

                              m

                              Comment

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