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    • Luisbakar
    • By Luisbakar 26th Jul 17, 9:56 PM
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    Luisbakar
    Statutory Lease extension
    • #1
    • 26th Jul 17, 9:56 PM
    Statutory Lease extension 26th Jul 17 at 9:56 PM
    I have just gone through the statutory lease extension and once the terms were agreed I sought to get a mortgage. As two months passed from the day the terms were agreed the freeholder has withdrawn the offer. And offered a new terms where the ground rent doubles every 25 years and at a rate much higher than the one negotiated through the statutory lease extension process.

    My solicitor never informed me that there is a 2 month deadline to complete. I even asked him if there was enough time to go for a mortgage. Once I transferred the amount (51k) that comprised of all the fees, premium, he informed me that the free holders solicitor will not complete.

    I am now left with 2 options of either to pay the new informal terms or wait for 12 months to apply again. Has anyone ever faced similar situation and has been able to find a way out.

    What is my course of action,
Page 1
    • da_rule
    • By da_rule 26th Jul 17, 10:59 PM
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    da_rule
    • #2
    • 26th Jul 17, 10:59 PM
    • #2
    • 26th Jul 17, 10:59 PM
    Unfortunately the deadlines are the deadlines. If you accept the informal route then you'll have to wait 2 years before you can extend further (should you want to). Also it'll probably be more expensive as the freeholder will stand to lose more ground rent if it doubles.

    Also, you should not have been paying any ground rent via the statutory route as the statute expressly prohibits the charging of ground rent after the lease extension.

    It sounds like a bit of a bodge job to be honest.
    • TrickyDicky101
    • By TrickyDicky101 27th Jul 17, 12:00 AM
    • 2,827 Posts
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    TrickyDicky101
    • #3
    • 27th Jul 17, 12:00 AM
    • #3
    • 27th Jul 17, 12:00 AM

    It sounds like a bit of a bodge job to be honest.
    Originally posted by da_rule
    Agreed - this appears to me like a serious failure on your solicitor's part if he didn't make you aware of the deadlines and the consequences of missing them. If you had the £51k (really?) to hand, why were you waiting for a mortgage?
    • anna2367
    • By anna2367 2nd Dec 17, 10:52 AM
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    anna2367
    • #4
    • 2nd Dec 17, 10:52 AM
    Statutory Lease Extension
    • #4
    • 2nd Dec 17, 10:52 AM
    My landlord agreed to extend my lease, currently standing at 81 years until March 2018, and I was happy with paying £7,500 for the extra 90 years and no more ground rent. However this has been going on since July 2017. My solicitor has sent a number of emails to the landlords solicitors asking for their costs, I know I have to pay the landlords solicitors fees on top of my own, but he just will not respond. This is the only thing stopping my solicitor from issuing the section 42 notice, required by my landlord.

    I'm worried they are delaying things so that they can ask for more money come March when I only have 80 years left on my lease. My solicitor has told me they can do this. Is this a loophole or do I have any rights to claim any additional costs I may incur if my solicitor has to go down the tribunal route?

    Can someone please help with advice, I'm getting really stressed out about this.
    • da_rule
    • By da_rule 2nd Dec 17, 10:59 AM
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    da_rule
    • #5
    • 2nd Dec 17, 10:59 AM
    • #5
    • 2nd Dec 17, 10:59 AM
    He’s under no obligation to respond until you serve the notice. And to be honest why should he? Why would he waste his time getting quotes and costs before you become liable for them (which is what happens when the notice is served). If when you serve the notice the costs are too much you can just walk away (once you’ve paid the costs incurred by the landlord up until that point).
    • eddddy
    • By eddddy 2nd Dec 17, 11:12 AM
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    eddddy
    • #6
    • 2nd Dec 17, 11:12 AM
    • #6
    • 2nd Dec 17, 11:12 AM
    My landlord agreed to extend my lease, currently standing at 81 years until March 2018, and I was happy with paying £7,500 for the extra 90 years and no more ground rent. However this has been going on since July 2017.
    <snip>
    Originally posted by anna2367
    So it sounds like you are negotiating an informal lease extension.

    As you suggest, some freeholders 'string along' leaseholders with no intention of proceeding - whilst the cost of the extension increases.


    Perhaps the best route is to start the statutory process by serving the section 42 notice. (It seems that you've misunderstood, you don't need any info from your freeholder in order to serve this notice.)
    • anna2367
    • By anna2367 2nd Dec 17, 11:49 PM
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    anna2367
    • #7
    • 2nd Dec 17, 11:49 PM
    • #7
    • 2nd Dec 17, 11:49 PM
    My solicitor has advised me that she is not issuing the notice because the landlords solicitor could turn around with any figure after we do this. She told me that they need to know how much their solicitors fees will be before serving the notice. I would not be stressing myself out if I had no intention of going ahead with this. I have all the money in place so I can go ahead. I am only going by what my solicitor is telling me.
    • anna2367
    • By anna2367 2nd Dec 17, 11:53 PM
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    anna2367
    • #8
    • 2nd Dec 17, 11:53 PM
    • #8
    • 2nd Dec 17, 11:53 PM
    Hi Edddy

    Yes we are negotiating an informal lease extension, as we all agreed on the price. I thought this would be plain sailing. I have asked my solicitor why she hasn't served the section 42 notice, as I know the landlords would have to respond with-in 2 months, but as I said, she won't serve it until she know's what I will have to pay for the landlords solicitor. Do you think I should push her to serve the notice regardless of knowing all the figures?
    • eddddy
    • By eddddy 3rd Dec 17, 12:27 AM
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    eddddy
    • #9
    • 3rd Dec 17, 12:27 AM
    • #9
    • 3rd Dec 17, 12:27 AM
    I have asked my solicitor why she hasn't served the section 42 notice, as I know the landlords would have to respond with-in 2 months, but as I said, she won't serve it until she know's what I will have to pay for the landlords solicitor.
    Originally posted by anna2367
    That seems like strange logic.
    • What if the landlord's solicitor never replies about the costs - you could be waiting forever?
    • What difference will the landlord's solicitor's costs make to your decision? What will you do differently, depending on the cost?
      Would you not extend your lease if the solicitor's cost is over a certain amount?
    • There's also the landlord's valuer's costs - you won't know what those will be in advance either.
    • anna2367
    • By anna2367 3rd Dec 17, 12:48 AM
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    anna2367
    We've already had and paid the landlords valuer to come out, this part of the lease extension is complete.

    The cost of the landlords solicitor would not stop me from extending, it has to be done as the flat will only have 80 years left on it come March.

    I am going by the advice of my solicitor. I have been stressing myself over it, so I thought I would ask on here for further advice.
    • eddddy
    • By eddddy 3rd Dec 17, 8:43 AM
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    eddddy
    We've already had and paid the landlords valuer to come out, this part of the lease extension is complete.
    Originally posted by anna2367
    I guess that your solicitor warned you that if you serve a section 42 notice, the landlord can then charge you for another valuation.

    (But the landlord might only do that to be 'difficult' - which some landlords are, because they don't like statutory lease extensions.)

    Have you already had your own valuation done, in order to prepare the section 42 notice?
    • da_rule
    • By da_rule 3rd Dec 17, 9:03 AM
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    da_rule
    Also, if you are going down the informal route, why is your solicitor looking to serve a notice at all? All that then does is start the formal proceedings, there’s no need to serve notices for an informal renewal.
    • eddddy
    • By eddddy 3rd Dec 17, 9:09 AM
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    eddddy
    Also, if you are going down the informal route, why is your solicitor looking to serve a notice at all? All that then does is start the formal proceedings, there’s no need to serve notices for an informal renewal.
    Originally posted by da_rule
    I think the point is that the freeholder's solicitor has stopped responding.

    That's a 'trick' used by some freeholders:
    Pretend that you are happy to do an informal lease extension - and string the leaseholder along for as many months as possible. Then 'change your mind' about the informal lease extension.
    In this case, the lease will dip below 80 years soon - so the freeholder may be 'messing about' until the 80 year mark is passed.
    • anna2367
    • By anna2367 3rd Dec 17, 12:20 PM
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    anna2367
    We are serving the notice as this is what the landlord has asked for. My solicitor did say this isn't normal, but that's just what they want.

    Can I get my solicitor to serve the notice without having another valuation done? I'm happy with the landlords price of £7,500.
    • da_rule
    • By da_rule 3rd Dec 17, 12:32 PM
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    da_rule
    In your notice you have to suggest a premium so you could suggest the pre-agreed £7,500.

    Have you read up on the effect of serving the notice (paying a deposit, becoming liable for costs etc).
    • anna2367
    • By anna2367 3rd Dec 17, 12:40 PM
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    anna2367
    Yes, I am aware I will be liable to go through with it all. I am prepared for this as I have the funds in place and I'm ready to go. I can't believe a landlord can agree to extend a lease and not really want you to go through with it. How can landlords get away with it?
    Last edited by anna2367; 03-12-2017 at 12:41 PM. Reason: spelling mistake
    • anna2367
    • By anna2367 3rd Dec 17, 12:55 PM
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    anna2367
    I think I will send my solicitor an email asking her to serve the notice. What do you think? Should I do this?
    • eddddy
    • By eddddy 3rd Dec 17, 2:24 PM
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    eddddy
    I think I will send my solicitor an email asking her to serve the notice. What do you think? Should I do this?
    Originally posted by anna2367
    You're doing things in a very unusual way.

    How much do you trust your landlord? This might all be fine if your landlord is decent and honest, but the landlord might be planning to stitch you up.

    For example, what if you serve the notice with a suggested price of £7,500 and the landlord instructs another valuer who responds with a value of £12,000?

    It sounds like you haven't instructed your own valuer. So how would you justify that £7,500 is a reasonable amount and how would you challenge the £12,000?
    • anna2367
    • By anna2367 3rd Dec 17, 4:21 PM
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    anna2367
    What should I do then? I don't understand why I need to pay for another valuation when I've paid for one already. Do you mean the valuation I paid for is only for the benefit of the landlord and I need to get my own? What if my own one comes back with a higher valuation?

    Should I hold off serving the notice? I am not an expert and I'm going by what my solicitor is telling me. I just know that they are stalling for a reason and it's very worrying to know I can't do anything about it.
    • da_rule
    • By da_rule 3rd Dec 17, 5:55 PM
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    da_rule
    Providing the valuation was on the basis of the statutory process being used then there isn’t a need for you to get another one.

    However, the landlord could still get another one (which you’ll be liable to pay for). If, for what ever reason, this valuation turns out to be different you could end up in prolonged negotiations over the premium.
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