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Im a bit desperate for help and advise. I'm the leaseholder of a large flat which i converted into two flats. I had all the correct planning permission from the council and was under the impression. I'd received the correct permission from the freeholder..(I hadn't- and only applied for permission).. The freeholder has cashed the cheque and still not said either way whether they grant consent... Anyway.. We're now 18months down the line where conversion has been completed and one of the flats has been put on the market.. (I'll keep the other one as I'm not well and need to plan to leave my children somewhere to live)
We have a buyer who's been waiting for 11 months now while the freeholder determine whether they'll grant retrospective consent. We've paid in excess of £9000 in fees to structural surveyors (no structural works were undertaken, only internal un-supporting walls moved) expert witnesses and engineers at the request of the freeholders.
The solititors for the freeholder have replied today, with a list of things I'd need to pay first before they grant consent... But no figures..
1. I pay the freeholder a premium in respect of the grant new leases and lisence to alter.
2. I pay the freeholder reasonable legal fees in respect of the deed of surrender, grant of new leases and licence to alter.
3. I pay the freeholder the legal fees incurred in respect of dealing with the breach of lease.
4. Upon receipt of the sums due at 1,2 & 3, the freeholder will agree to a deed of surrender, the grant of new leases and licences to to alter.
5. A surveyor will be instructed in respect of determining the premium payable and the new rent payable under the leases, the costs of such surveyor will be payable by me.
They're happy that all the works have been completed correctly and to a high standard.
Thank you for reading this far....
My questions are... Can I reverse the alterations? Or will I still be in breach?
is this 'normal' or are the freeholder after forfeiture of the lease?
Does anyone have an idea of what the 'premium' could be?
The things you have listed do not sound unreasonable and it does not sound as if the freeholder is looking to foreclose on the lease.
You do need legal advice and probably also need to appoint a specialist surveyor to represent you in the negotiations. I suspect you could put everything back as it was and the freeholder would accept this although you would probably still be responsible for the freeholder's costs.
I don't think I would attempt to market the property until everything has been resolved thus removing some of the pressure you feel you are under.
Thank you for your reply, I forgot to mention they've given me 72 hours to reply before they take action. It took them 7 months to send this letter after they had all the information they required.
i can't help but feel this is personal, I've explained I'm not trying to get rich quick, or do anything slyly.. It was an honest mistake where I'd though I'd obtained all the correct permission before works started. And my solicitor isn't available till after the deadline..?
I suggest you contact David Smith at Anthony Gold Solicitors who frequently comments on this site. The threat of legal action is serious and I expect you would be responsible for the legal costs which could be significant and your lease is at risk.
Thank you Essex, I've managed to obtain figures for the new deeds and lease and also the legal costs to date. They don't seem unreasonable.
It's just the premium the freeholders will charge that is an unknown.
if I were to accept the conditions they've laid out, and it turns out that the premium is more than I can afford, where would that leave me?
You could agree to the changes and costs in principle and subject to final figures being acceptable to you. You would also need to check what the ground rents and contribution to service charges were going to be to ensure these were not unreasonable going forward.
ill send them and email with my response.
Nothing about this seems unreasonable, they may seem a little awkward to you, but remember you are the one who went ahead with some work without the correct approval. I am sure everything will return to normal once you have rectified the situation.
Thanks Nick, in my defence i thought I'd had approval as works didn't start till 3 months after the application and cheque was cashed by the freeholder.
I'm sorry to say that a premium of anything up to a straight 50/50 split of the uplift in value would not be unusual or considered unreasonable i.e. the combined value of the two newly created flats less the value of the original flat and construction costs.
As you have a willing buyer you'll have a fairly good idea on the increased value.
Thank you KT, do you know if they would take into consideration outstanding mortgage or conversion costs?
Ive agreed in principle, and they're arranging a valuation surveyor. I'm concerned they'll come back with an unaffordable amount, i.e not enough 'profit' left to achieve the original goal.