Leaseholder is selling, do I have to answer solicitors questions?

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    Leaseholder is selling, do I have to answer solicitors questions?

    I am the freeholder and my lease holder is selling.

    There have been a number of breaches of the lease and between ourselves we came to an agreement (via email) that the leaseholder would pay me a sum of money to rectify the breaches before I would be asked to complete the solicitors questions in relation to the sale.

    I received the form today from the solicitor and emailed the leaseholder. She is now telling me I need to complete the form before any money (may or may not) be transferred to me.

    Do I have to reply to the solicitor and if I don't, what are the consequences, can the sale still go ahead without the form completed by myself? Is there any particular time frame involved?

    Thanks

    #2
    Originally posted by jobh View Post
    There have been a number of breaches of the lease and between ourselves we came to an agreement (via email) that the leaseholder would pay me a sum of money to rectify the breaches before I would be asked to complete the solicitors questions in relation to the sale.
    As I understand your query, it is whether not to reply at all rather than whether to reply and disclose? I'd caution against the first but that's just me. My opinions are not to be taken as legal advice.
    Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

    Comment


      #3
      Unless there has been a change in the law I have missed, there is no obligation on a landlord to answer questions raised on a sale.

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        #4
        I do read this opinion. It appears on the LAS site too.

        It suggests that all leases are effectively valueless on the whim of one party to the lease because the conveyancing 'industry' has agreed a structure (LPE1) that prevents a lessee self-answering key questions required by buyers. The LPE1 form is not binding but the industry approach is to require the freeholder or the agent to answer the questions.

        Common sense, if not common law, must therefore somewhere protect a lessee from serious damage or loss of the realizable value of their asset should a freeholder simply refuse to co-operate without stating relevant or reasonable cause. Disclosing the problem is not the same as withholding the information.

        I have read that freeholders can be sued for such loss. Don't have any examples, mind. Must look.

        Lawful defence is usually about reasonableness and right. There may be no express statute stating "answer these questions" but the damaging consequences I feel certain will find a home in some law. Perhaps I am naive.

        The OP simply mentions breaches and emails? Not a determination of breach or even a written admission of breach? Or is it admitted? If yes, the buyer needs to know or they will inherit the un-remedied breach. If retrospective consent conditional on a fee being paid has been offered, this too needs to be known.

        I don't accept the world of leasehold is as often portrayed - all one-sided.

        Personally I would not block a legitimate sale of my lessee's valuable asset on the interesting argument that I have no express obligation to answer conveyancing questions as to arrears or breach action pending. I suspect a court would take a different view, or else leasehold is finally toast as a tenure.

        I must research this point for my neighbours.
        Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

        Comment


          #5
          Is the form you have been asked to fill in, contain the standard purchase questions
          E.G, are service charges fully paid up, is ground rent paid up, can they have sight of the asbestos report, the fire and safety report, the last 3 years service charge demands for the flat, what are the estimated next service charges ?

          You are entitled to reply back and state the leaseholder is in breach of his lease, and no questions can be answered until the breaches have been rectified.
          And that it has been agreed ( send them the email ) showing the following :
          "the leaseholder would pay me a sum of money to rectify the breaches before I would be asked to complete the solicitors questions in relation to the sale."
          and until such time as the leaseholder rectifies the breaches as per the agreement in the email, you will not answer any questions.

          Comment


            #6
            Up until I stopped doing conveyancing (early 2003) it was not felt necessary to ask questions of the landlord or his agent. Since then it has all changed. I have just had a look at form LPE1. Most of the questions on it can be answered by reading the lease, which a buyer's conveyancer must do in any event, or by asking the seller. A seller is hardly likely to mislead the buyer when answering questions such as "Who collects the ground rent?" Of course he may not answer truthfully if asked about breaches of covenant or disputes with the landlord, but then a freeholder may not answer truthfully about whether he is in breach of a restrictive covenant or has a dispute with a neighbour or has had a letter from the local authority and no one sends long lists of questions to neighbours.

            There is also the question of the extent to which one can actually rely on the replies.

            Comment


              #7
              Originally posted by Lawcruncher View Post
              I have just had a look at form LPE1. Most of the questions on it can be answered by reading the lease.
              Absolutely. And lessees, if 'served' by professional leasehold managers, ought to have at least annual SC and GR invoices, more likely two, that shows what they owed up to that invoice. The Law Society in its wisdom along with all the major players decided that only the landlord or agent can answer the leasehold property questions per "The Seller should only complete this form if they are, or are appointed to represent, one of the parties in section 1." The aforementioned parties are: landlord, management company, managing agent and even a lowly residents/tenant's association, which has no real legal management status in conveyancing or anything else, even if a formally recognised one. A tenants association cannot have recognition status and act for a landlord. You'd wonder why they should be more believed than the seller.

              In the end the buyer has to decide and sue if the answers are found to be false. How many do?

              This is just another leasehold law dog's dinner? RAM's advice covers all angles. No buyer will buy learning of an unremedied and admitted breach if they have a decent solicitor and the freeholder cannot be accused of simply refusing to answer. FH gets what they want - paid for retrospective consent. Buyer gets what they want - handed-on retrospective consent and no danger of re-emergence post purchase. Seller gets what they want - free of that lease.
              Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

              Comment


                #8
                You can ask the buyer's solicitor to give you an undertaking to pay whatever you have agreed before you give any reply to their enquiry ( which is usually required by the buyer's mortgage lender. )

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                  #9
                  Be aware any money paid by the LH may come under the definition of service or admin charges and can be challenged as such by the LH at the FTT at a later date.

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                    #10
                    Thanks for the replies so far!

                    I have another question please.

                    The lease began in 1958 and there is a section in it referring to subletting. It says that within 1 month of an assignment there is a fee payable of 2 guineas.

                    Clearly this is out of date and the leaseholders solicitor has told me that the fee payable to me is £2.10.

                    I have recently taken a 30 minute (free) advice from a solicitor who mentioned something about a deed of variation in relation to the outdated (old money) fees.

                    I know that the lease holder has to consent to a deed of variation but the solicitor I spoke to said that in some circumstances consent is not needed if it's clear the lease needs to be updated. Can I arrange a deed of variation to bring the fees up to date as the leaseholders solicitor is saying this fee will not change for the whole term of the lease.

                    The solicitor roughly put a figure of £80/£100 per lease/mortgage transfer and after email communication the lease holder agreed to pay £300 (2 sublet fees and the soon to be sale - £100 each assignment). I have no idea if I am within my rights as freeholder to put a value on this as clearly 2 guineas/£2.10 is not realistic for the 21st century. The lease holder did agree to pay this (are the emails binding or can she back down).

                    Another breach was to do with the porch she altered without consent and didn't replace the door. She did agree to pay me £650 (after we had a quote) for me to have the door replaced but it seems now that she is backing down on this as well.

                    With regard to the LPE1 form, I take on board what has been said and it would be better for me to reply saying questions will be answered once the money has been paid. Can I also say that there will be work carried out in the future and I would be happy to give details, again once the money has been paid. I intend to have the side path paved in and as it is shared access the cost will be shared. If the money is not payed for the porch door I will also say that this will be another future cost.

                    Basically I want to 'force her hand' in paying the £950 she agreed to.

                    Am I allowed to do this, I don't understand the law!

                    Comment


                      #11
                      The fee is fixed for the whole period of the lease. Two guineas was a tidy sum back in 1958. To put it in perspective, it was a day's wages for a school leaver in 1970. Today I consider £2.10 a more than reasonable sum just to note the name of a new tenant. That can take no more than five minutes which works out at £25.20 per hour, roughly three times the minimum wage for something that requires no skill.

                      Does the lease require consent for subletting and assignment?

                      How long ago was the door taken down?

                      I think it unlikely that any of the sums the tenant has agreed to pay are payable.

                      Comment


                        #12
                        Can I charge a fee to fill out the form (does this have to be stated in the lease) because unfortunately my lease doesn't contain any clause that says the leaseholder has to pay legal costs.

                        If I can, how much should I charge?

                        Comment


                          #13
                          You can charge because it is not something regulated by the lease. It is like anything else, you state your price and the customer decides whether or not he is willing to pay it. Since everyone has now decided that these questionnaires are needed your are in a strong position and it is up to you whether you take advantage of it if you want to earn some cash. A good test is to ask yourself how much you would be prepared to pay. Bear in mind conveyancing charges. Think about what you propose to charge and ask what else you can get for it to assess if it is value for money. Do not forget that you got half an hour free from a solicitor and that I and many others give a lot of time on forums like this free giving legal advice.

                          Comment


                            #14
                            Originally posted by jobh View Post
                            The lease began in 1958 and there is a section in it referring to subletting. It says that within 1 month of an assignment there is a fee payable of 2 guineas.
                            Assignment has nothing to do with subletting. Your binding legal contract allows you to charge the BUYER 2 guineas within one month of buying (assignment). This is to let you know who to charge ground rent to and service charges. It's in your interests to know this. A notice of assignment is not a tax on buying.

                            Originally posted by jobh View Post
                            Clearly this is out of date and the leaseholders solicitor has told me that the fee payable to me is £2.10.
                            Free money conversion advice - old guinea was indeed one pound and one shilling. Not sure why the seller's solicitor is involved. Nowt to do with seller.

                            Originally posted by jobh View Post
                            I know that the leaseholder has to consent to a deed of variation but the solicitor I spoke to said that in some circumstances consent is not needed if it's clear the lease needs to be updated.
                            Funny what advice you get for free. A lease is a binding written contract. It can be varied by mutual consent of the parties or by a Tribunal. Or why not let your lessee vary it to suit themselves? Only fair?

                            Originally posted by jobh View Post
                            The solicitor roughly put a figure of £80/£100 per lease/mortgage transfer and after email communication the leaseholder agreed to pay £300 (2 sublet fees and the soon to be sale - £100 each assignment).
                            The Upper tribunal (HOLDING AND MANAGEMENT (SOLITAIRE) LIMITED vs CHERRY LILIAN NORTON, 2012) has already determined the reasonable fee for a subletting consent - perhaps the free solicitor had not checked this...

                            "a fee greater than £40 plus VAT could not be justified"

                            Why does your lessee have to pay for the assignment notice? Does the lease require prior consent to assign? Not what you quoted. Hope you didn't misinform your lessee that they had to agree irrespective of what the lease says? They want to sell. Hopefully not agreeing under duress?

                            Originally posted by jobh View Post
                            The lease holder did agree to pay this (are the emails binding or can she back down).
                            Ditto. The lessee, just like you, can hold you to the precise wording of the lease.

                            Originally posted by jobh View Post
                            With regard to the LPE1 form, I take on board what has been said and it would be better for me to reply saying questions will be answered once the money has been paid.
                            It now seems clear you cannot charge what you got the lessee to agree to pay.

                            Originally posted by jobh View Post
                            Can I also say that there will be work carried out in the future and I would be happy to give details, again once the money has been paid. I intend to have the side path paved in and as it is shared access the cost will be shared. If the money is not payed for the porch door I will also say that this will be another future cost.
                            This is a mess. If you have an intention to incur costs (door or otherwise) that will cost any leaseholder more than £250 you must serve s20 notices. Putting something vague in the LPE1 won't suffice. If you are holding the lessee to financial account for breach, why charge for the door again?

                            Originally posted by jobh View Post
                            Basically I want to 'force her hand' in paying the £950 she agreed to.
                            Am I allowed to do this, I don't understand the law!
                            Shame your poor lessee hasn't found this forum. It takes two to make a contract work. Your lessee subletting without consent needs remedying, as does any physical breach. You seem to have taken yourself into a legal maze and now the lessee is calling out your lack of knowledge. If she has admitted two sublettings charge her £40 x 2 plus VAT. Charge her whatever you think is reasonable to fill in the LPE1 - read up on case law. Decide what you want about the porch. If she agreed to pay for the door say that in the LPE1. Don't try to charge for the assignment given how you quoted the lease.

                            Oh yes, and any admin fee (as these are) must be invoiced with a summary of rights or they are not payable until the summary of rights is provided. Your free solicitor mentioned this?

                            As said above, the irony is how much time you expect others to give for free so that you can charge an obviously ill-informed lessee for you to do rather basic freeholder tasks. How long has this been going on while the lessee wants to sell? How would you feel if the roles were reversed?
                            Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                            Comment


                              #15
                              I have to say I quite agree with Mr Soffit, the poor person has let out their flat, that is common these days and has modernised the Porch door and she is to be blackmailed into paying a fee to the Freeholder.

                              Why do you want to charge a fee for filling out the form and trying to ruin the leaseholders opportunity to sell the flat.

                              It is a shame the other leaseholders do not know that they can now buy the Freehold and run it themselves.

                              Just fill in the form for the Lessee and let her or him sell on. It would be a good idea to update the lease and perhaps a good idea for all the tenants to get together and fomr a Residents Association and buy the Freehold through the right to buy.

                              Comment

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