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  • Leasehold Property

    Extending lease on ex-council flats

    Hello

    I'm trying to weigh up if to employ my own solicitor, or just to go with the fees proposed by the Local Authority for both of my ex-council flats. Does anyone have direct experience of this?

    Westminster City Council (Total estimate  £1496 +VAT) below. And also Brent Council (1800+VAT)

    These fees are just professional fees. So the actual lease will be payable on top.

    Has anyone challenged the professional fees?

    I am sure I could also challenge the lease extension cost if needed.

    From Westminster

    Total estimate  £1496

    £350.00 Valuation Fee
    £200.00 Administration Fee
    (This includes investigating your rights to a new lease and agreeing the terms of the new 
    lease, instructing the valuer and the solicitors)

    £96.00 cost of the leaseplan which is required to be
    attached to the new lease.

    + our solicitors fees in addition to your solicitors fees. It is not possible to advise you exactly how much our solicitor’s fee will be but it will be a minimum of £850. If the matter becomes protracted this fee will increase.

    From Brent Council

    Having referred to your lease you have approximately 97 years 
    remaining, as the lease commenced on 1988 for the term of 125
    years. Unfortunately we do not provide forms for this matter, please
    see below regarding this process to extend your lease.



    When extending a lease we will do so by 90 years plus any unexpired
    term left. You will need to serve us with the Legal Notice under S42
    of the Leasehold Reform, Housing and Urban Development Act 1993, you
    should seek independent legal advice on this matter if need be.

    Before we can consider the above matter, you need to be aware of the
    following requirement:

    You will be responsible to pay our legal and valuer's fees of
    approximately
    £1,800.00 plus VAT, and your own legal fees. If you decide to proceed
    with the extension of lease you will need to pay the valuer’s fees as
    a non-refundable deposit of £490 + VAT by cheque payable to London
    Borough of Brent, the remaining costs will be deducted from the completion money.

    We are unable to provide an estimate of how much the lease extension
    will cost, this can only be determined once the valuation has been carried out.

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    These fees look like they are the freeholder's legal fees, if so your legal fees will be in addition to these.  As it refers to you serving notice under section 42 I think you will need to appoint your own solicitors to do this and to act for you on the lease extension.  The fees look about right for a lease extension and I doubt you could challenge these.

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    Thank you EssexLL. Now I understand. So I do need my own Solicitor it seems.

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    EssexLL is right - the councils are advising you of their solicitors' fees which you will have to pay.

    You will also have to employ your own solicitor to act on your side and the actual lease extension fee is another thing.

    The procedures being followed by the Councils are in accordance with the Leasehold Reform Act 1993 and are therefore not questionable.  I think the councils can be trusted to be acting in a fair and reasonable manner.  There are structured legal guidelines as to the costs of lease extensions and I would trust them to act accordingly, so I would not expect any of it to be arguable.

    Sorry if it's not what you wanted to hear.

    Angela

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    "It is the small decisions you and I make every day which shape our destinies." Anthony Robbins

    Thank you Angela Bryant, and EssexLL.

    I understand better now. I was about to post the Section 42 notice without a solicitor, so it looks like I better appoint one!

    A few more questions you might have experience in:

    * Is it advisable to also pay for my own leasehold survey valuation?

    * Have you challeged the valuation that comes back from the Local Authority's valuer? I wonder how much movement on the cost of the extension is possible.

    I have been looking on here https://directory.lease-advice.org/

    However - if you can recommend anyone, or give me an example of your legal fees you paid for your lease extension I would be good to know as a benchmark.

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    I would be inclined to appoint my own valuer and use the figure he arrives at when serving the section 42 notice - you will still be responsible for the freeholder's valuation cost.  If the freeholder's figure comes in higher you could ask your valuer to negiotate on your behalf.

    There is a formulae for calculating the cost of lease extensions and only minor variations in the assumptions used in the calculations so I would expect the figures to be close to each other.  You should speak to local surveyors and ask about their experience in valuing for lease extensions, or research via their websites initially.

    As to legal fees, I cannot recall these but expect them to be between £1,000 - £1,500.

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    Thank you EssexLL

    I had put £1000 on the S42 notice, I guess it does not matter if theirs comes back higher? I just did that to try and get a lower cost

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    If the remaining lease term is over eighty years at the time it is extended cost will be reasonable - assuming the current ground rent is reasonable.  There are a number of calculators on the internet which you can use to get an indication of cost..

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    Hi Jonny Grant,

    There's quite a good article on Money Saving Expert about extending a lease which you might find useful.  It includes a cost calculator which as EssexLL said is worth using.

    Personally, I would be inclined not to get my own valuation done unless I believed after getting the Councils' valuations that they were unfair, by cross-checking with the calculators initially.  I should think that councils will be inclined to be fair.

    Angela

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    "It is the small decisions you and I make every day which shape our destinies." Anthony Robbins

    Thank you for the link

     Yes, if it is roughly right, the council's RICS surveyor should be accurate. I wouldn't want to waste £450+VAT on my own survey!

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