Splitting maisonette into 2 flats - premium to joint freeholder

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    Splitting maisonette into 2 flats - premium to joint freeholder

    We hold a long lease on a maisonette covering 2 floors of a 3 storey Victorian terrace. The top floor is a flat also on a long lease and we own 50% of the freehold of the building with the owner of the lease on this flat.
    We want to convert the maisonette into 2 flats and our lease requires us to have the permission of the other leaseholder. He is ok for us to proceed but wants us to pay a Surveyor to compute the amount of 'premium' he will be entitled to for agreeing to the surrender and regrant of 2 leases into 3.
    The increase in value of splitting the maisonette into 2 flats to us on sale (which we intend to do after conversion) is likely to be between £150k and £200k. My questions are:

    1. Does anyone know what level of premium might be due to him or how a surveyor might work this out?
    2. Is the premium due to him as leaseholder or joint freeholder or both?
    3. Presumably there will be a range so we might be advised to get a separate valuation if we are not happy with the first valuation and negotiate from there?

    Any advice gratefully received.

    #2
    Freeholders get the money, not leaseholders.

    It is normal for a freeholder to ask for 50% of the increase in value.
    But you are not increasing the value of your current lease, you are making a NEW lease.

    Only the freeholder can sanction a new flat. and that means the other freeholder ( not as the leaseholder, but as the 50% share of the freehold ) gets the proceeds.

    You would still have to give the other freholder 50% of the profit made on the New flat.
    Don't think of subtracting the devalued portion of your remaining flat size, as you have decided to reduce the size, no one else has.

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