Upfront agreement on freeholder costs for tenants improvement works

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  • flyingfreehold
    replied
    costs for a licence for alterations in forexample outer london are quite commonly surprisingly high. reckon on 500 plus vat for the solicitors and as much as the same for surveyors fees. it all depends on the complexity of the works and the co-operation of the lessee

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  • leaseholdanswers
    replied
    That actually wasn’t his first point but one of the landlord’s own costs as distinct to those that he incurs, which was moved on to the overall justification for the incurred costs of the MA.

    Well again the same answer applies. if the works are of complex nature which require a building surveyor to be employed, that can in turn alter the amount and nature of work that the MA does, from choosing and appointing the surveyor to revisions to the licence and the related consents that the complicated work requires, and ensuring adequate building insurance cover while the work is being done, as well as if the flat is Improved through additional facilities ensuring that the building insurance cover is revalued.

    I agree if they cannot justify and quantify what they do for £300 by all means drag them off tot he FTT.

    In our case I would simply send you the file ( omitting any grumpy notes or comments) as we are committed to transparency- sadly not all are !

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  • robfoster1980
    replied
    Hi leaseholdanswers,
    While agreeing with the above what the other poster has picked up on is that the additional £300 is not the BS fee but a further MA fee for consideration of any advice by the building surveyor, whose fees I would be laible for directly in addition to this extra admin charge.
    This charge will be something i will at least be questioning moving forward if it becomes payable.

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  • leaseholdanswers
    replied
    Originally posted by robfoster1980 View Post
    The £480 is obviously not reasonable but in the hope of getting agreement without too much hassle may be, in the big scheme of things, worth paying.!
    You can of course challenge it but as mentioned in the above post with due respect to you and Lawcruncher I doubt that you appreciate what does have to be done.

    Apart for a sense of £480 “is a lot” through your instinct to his comparison to conveyancing only makes the matter harder for you. It is important to look at what the agent and surveyor, if appointed, is doing, which we can as papers are exchanged to see if £180, £300 or £480. all in. is "worth it" with due regard to the necessity and cost.

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  • leaseholdanswers
    replied
    Originally posted by Lawcruncher View Post
    That is not how I read the original post. We need clarification. (Even if it is the MA who is replying, how can 480 pounds be justified?)
    With due respect to you, you have to remember that this is what my pracitce does. Licence for works can easily run into the £2000- £2500 range and even basic ones, where a simple letter outlines conditions, can easily run into the £180 range.

    The fee as explained is two areas

    1 the appointment of a building surveyor if as they say required, of £300 which will easily be absorbed by 3 inspections, one desktop at the point of the request and two site inspections before and after. If a building surveyor is "in house" the cost may be less in same cases, as they will be familiar with the premises, but appointing an external firm is unlikely to find someone being engaged for less than that amount. This cost is easily exceed of works lead to compilations or the builder is not meeting the terms of the contract.

    By all means given a set of works one might challenge that need and how much they do, and their rates, however it cannot be assumed that a landlord has the competence to assess works and their implications for the building.


    2 On the MA fee that in the same depends on what they are doing. The basis desktop evaluation of the works the lease and a site inspection if required can again ea reach £100 in the shires and in a heartbeat in London! Where they are dealing with the licence this cost can be added to, as well as inspection on completion (unless it is covered by 1).

    It is quite common that the submission is as above based on a quote and wish and a prayer that it’ll all go well. The purpose of reviewing this is to ensure that the owner and builder are aware of what they need to know, but that they must comply with it.

    Moreover there may be a certain amount of communication with others on the works being carried out, the conditions that apply, and dealing with the inevitable moans whines and in some cases real problems. There may also be interuptions to services which might require notification and arranging contractors to work on these eg shutting off water.

    What is often failed to be understood is that if the landlord gives consent then he has liability to adjoining owners from quiet enjoyment to the liability for structural alterations “gone bad”.

    It is unhelpful to compare conveyancing with this work as it is apples and pears for a lot of what is involved in some cases. As this project involves more than a simple upgrade, this is one of those instances.

    The days of doing all this for £50 to £100 are long long gone.

    I have predicated my reply on that the MA is replying as representing the freeholder, and as such their costs would be recoverable. I accept as explained above that the costs are open to change but have indicated how they might be justified. The proof will be in examination by Rob.

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  • robfoster1980
    replied
    The £480 is obviously not reasonable but in the hope of getting agreement without too much hassle may be, in the big scheme of things, worth paying.

    The ball is now rolling and I will happily update as to how the process is going and am fully prepared to question the ongoing fees once an indication of approval has been obtained. I think it is probably in my interests to keep relations sweet for as long as possible.

    Then another 12 months down the line i get to sort the lease extension out too. The freeholder has already shown himself to be a money grabber - agreeing a non statutory lease extension on the flat below, to provide the new owner with a new lease (the flat has just been sold), for a given premium, only to request a further £3,000 between exchange a completion. Should be a fun ride!

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by leaseholdanswers View Post
    That’s precisely your point isn't it?

    The landlord is not doing a lot, his MA is dealing with the matter (£180) and where required a building surveyor too (£300). These are all "expenses" that he can incur as distinct from him doing it himself, and recover.
    That is not how I read the original post. We need clarification. (Even if it is the MA who is replying, how can 480 pounds be justified?)

    Leave a comment:


  • robfoster1980
    replied
    Thank you all for your further comments on this.

    We do seem to have got to the point which leaseholdanswers kindly and expertly clarified for me and was the purpose of my original post - how to progress the matter while still being able to dispute the fees if, once the matter has played itself out, overall were unreasonable. My actions being to respond to the MA with the initial payment and agreement to breakdown but subject to my rights and the provisions under the CLR Act 2002.

    The discussion has been very reassuring regarding my actions, thanks again.

    Leave a comment:


  • siva
    replied
    I stand to be corrected but the approach to take might be to agree to pay the demanded amounts but that you withhold the right to dispute the administration charges at the First Tier Tribunal. If they don't agree then they would in my eyes be deemed to have unreasonably withheld permission.

    Leave a comment:


  • leaseholdanswers
    replied
    Originally posted by Lawcruncher View Post
    Fine, but here we have a clear case of double charging. What is the landlord going to do for the 480 pounds he wants to charge? You can get your conveyancing done for that!
    That’s precisely your point isn't it?

    The landlord is not doing a lot, his MA is dealing with the matter (£180) and where required a building surveyor too (£300). These are all "expenses" that he can incur as distinct from him doing it himself, and recover.

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by leaseholdanswers View Post
    The distinction in your post is in simple terms the landlord " Ok erm right- alteration " and taking a view and putting certain processes in train, but the ability to distinguish between that and the established precedent that "in house costs" are recoverable, is one that is harder to clarify than it might appear to be.
    Fine, but here we have a clear case of double charging. What is the landlord going to do for the 480 pounds he wants to charge? You can get your conveyancing done for that!

    Leave a comment:


  • leaseholdanswers
    replied
    Originally posted by Lawcruncher View Post
    To clarify that, not only can a landlord not charge a premium, but he cannot charge a fee for the time he personally spends considering an application.
    Sorry but I think it important to look at that point as it might create confusion in the minds of this unfamilair with the process.

    The distinction in your post is in simple terms the landlord " Ok erm right- alteration " and taking a view and putting certain processes in train, but the ability to distinguish between that and the established precedent that "in house costs" are recoverable, is one that is harder to clarify than it might appear to be.

    Ironically the one man band or residents group are therefore incentivised to hand it over to lawyers etc rather than keep costs down by doing it themselves!

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by leaseholdanswers View Post
    Yes that right but a fee eg a premium , which is different to fees,the costs of a surevyor etc, which some can be confused about.
    To clarify that, not only can a landlord not charge a premium, but he cannot charge a fee for the time he personally spends considering an application.

    Leave a comment:


  • leaseholdanswers
    replied
    Yes that right but a fee eg a premium , which is different to fees,the costs of a surevyor etc, which some can be confused about.

    On 4 the MA involvement is as the FH agent, assuming teh FH appoints them.

    In regard to the flue and external pipe work, there will be a general restriction in most leases not to change the appearance of the exterior, and if relocating waste pipes and flues, rarely is there a right to alter the walls and structure which are not in your demise - the lease.

    Leave a comment:


  • Lawcruncher
    replied
    robfoster1980,

    Welcome to rip off city!

    A landlord is not entitled to be paid a fee for giving a consent, only to recover expense he has incurred. He may though require payment of compensation for any diminution in value of his interest in the building.

    Any surveyor's expenses should be proportional to the cost of the work involved.

    Leave a comment:

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