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    • Tade
    • By Tade 11th Oct 17, 9:49 PM
    • 18Posts
    • 6Thanks
    Tade
    Freeholder Notice of Transfer Fee for Remortgage
    • #1
    • 11th Oct 17, 9:49 PM
    Freeholder Notice of Transfer Fee for Remortgage 11th Oct 17 at 9:49 PM
    Hi,

    I'm hoping that someone with knowledge of leaseholds and remortgage fees will be able to help and advise :-)

    I am in the process of remortgaging (changing lender) a flat that is leasehold.

    The my new lender's solicitor has asked the freeholder whether there is a "Notice of charge fee", to which the freeholder has responded with a fee of £285.

    Does this seem reasonable?

    I have included below a quote of text from section 4(iii) of the lease that I think may be relevant? It mentions a fee of £3.15 - but it is not obvious to me whether this relates to the "Notice of charge" fee that the Lessor is attempting to charge? I would appreciate it if someone with more expertise is able to advise whether this clause is relevant, and what action if any I should take?

    "
    4. The Lessee hereby covenants with the lessors and the management company as follows:-
    (iii) Within one calendar month after any such document or instrument as is hereinafter mentioned shall be executed or shall operate or take effect or purport to operate or take effect to produce to the solicitors for the Management Company and the Lessors respectively every transfer mortgage or legal charge of this lease or the demised premises and also any underlease of the demised premises for a term exceeding twenty-one years and every assignment or transfer of such underlease and also every probate letters of administration order of court or other instrument effecting or evidencing a devolution of title of the said term or any such underlease for the purpose of registration and for such registration to pay each of such solicitors a fee of Three pounds and fifteen pence in respect of each such document or instrument so produced and to deliver to the Management Company each deed of convenant referred to in paragraph (ii) (b) of this clause duly stamped
    "


    Many thanks in advance!

    Tade
Page 1
    • JohnnyZee
    • By JohnnyZee 11th Oct 17, 10:05 PM
    • 26 Posts
    • 1 Thanks
    JohnnyZee
    • #2
    • 11th Oct 17, 10:05 PM
    • #2
    • 11th Oct 17, 10:05 PM
    I am not sure about the legal text. But to answer your question as to whether it is reasonable, these costs are actually fixed by the freeholder in advance (they should have a price list for financial year). But it seems a bit expensive. I paid about £100 for mine. And this was a combined notice of transfer / charge.
    • eddddy
    • By eddddy 12th Oct 17, 12:15 AM
    • 5,277 Posts
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    eddddy
    • #3
    • 12th Oct 17, 12:15 AM
    • #3
    • 12th Oct 17, 12:15 AM
    But to answer your question as to whether it is reasonable, these costs are actually fixed by the freeholder in advance (they should have a price list for financial year).
    Originally posted by JohnnyZee
    Just because a freeholder fixes a price or produces a price list doesn't make the fee legally payable.

    The Landlord and Tenant Act will override any price list produced by a freeholder.

    The act states that any fee charged must be 'reasonable'. So if the freeholder is charging £285, it must reflect the amount of work they have to do (and/or the costs they incur).

    But as Tade suggests, if the lease says the fee is £3.15, I'm pretty sure that's all the freeholder can charge. If the freeholder wants that fee changed, they'd have to ask a Tribunal to vary the lease.

    (And I think the Tribunal might say "You bought the freehold knowing about that fee. If you didn't like it, you shouldn't have bought the freehold.")
    • Tom99
    • By Tom99 12th Oct 17, 2:09 AM
    • 263 Posts
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    Tom99
    • #4
    • 12th Oct 17, 2:09 AM
    • #4
    • 12th Oct 17, 2:09 AM
    The lease clearly states the fee is £3.15 so that is all you should pay
    • Tade
    • By Tade 12th Oct 17, 9:56 PM
    • 18 Posts
    • 6 Thanks
    Tade
    • #5
    • 12th Oct 17, 9:56 PM
    • #5
    • 12th Oct 17, 9:56 PM
    Thank you everyone for your replies.


    After reviewing the lease again it does say the following:

    "The parties hereto hereby apply to the Chief land Registrar to enter a restriction on the register of the title to this lease in the following terms:- 'Except under an Order of the Registrar no transfer is to be registered without the consent of ...'"
    It would seem that the lessee could refuse to give consent unless I pay, so I should probably submit to their fee of £285?

    I don't have a solicitor. The legal company is acting on behalf of the lender, and so I have assumed it is down to me to try to negotiate with the lessee. I don't really want to delay the re-mortgage process too long; perhaps the best course of action is for me to write to the lessee and state that I will grudgingly pay it so that the re-mortgage is not delayed, and that I will be pursuing them later to obtain further details as to why the charge is so high

    Tade
    • eddddy
    • By eddddy 12th Oct 17, 10:30 PM
    • 5,277 Posts
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    eddddy
    • #6
    • 12th Oct 17, 10:30 PM
    • #6
    • 12th Oct 17, 10:30 PM
    I don't really want to delay the re-mortgage process too long; perhaps the best course of action is for me to write to the lessee and state that I will grudgingly pay it so that the re-mortgage is not delayed, and that I will be pursuing them later to obtain further details as to why the charge is so high
    Originally posted by Tade
    Yes - you should state that you do not agree that the fee is due, and that you are paying under protest.

    For more info, see: https://www.lease-advice.org/advice-guide/service-charges-other-issues/
    Especially Section 5, Administration Charges

    You could also ask them why they are not charging £3.15 as specified in the lease, and what work is involved in dealing with this (to help you judge whether £285 is reasonable).

    You can get free advice on this type of stuff from LEASE.
    See: https://clients.lease-advice.org/appointments.aspx
    • Tom99
    • By Tom99 13th Oct 17, 6:28 AM
    • 263 Posts
    • 125 Thanks
    Tom99
    • #7
    • 13th Oct 17, 6:28 AM
    • #7
    • 13th Oct 17, 6:28 AM
    But your lease stipulates that you only have to notify the freeholder within one month of the new mortgage being completed.

    So complete the mortgage then afterwards send a copy to the freehold with the £3.15 fee as per the lease.

    I assume your freeholder is not a party to the mortgage becuase unless he is there is no way he can delay your mortgage whilst arguing about a fee.

    If you pay up this time then you will be stung whenever you need anything else as well.
    • chappers
    • By chappers 13th Oct 17, 8:11 AM
    • 2,705 Posts
    • 1,531 Thanks
    chappers
    • #8
    • 13th Oct 17, 8:11 AM
    • #8
    • 13th Oct 17, 8:11 AM
    From my reading the £3.15 fee is just to lodge the charge and is nothing to do with the legal/admin fees to carry out the work and actually register the charge. The minimum fee to actually register a charge with the LR is I believe £20 alone and rises according to the value of the charge.
    • eddddy
    • By eddddy 13th Oct 17, 8:11 AM
    • 5,277 Posts
    • 4,912 Thanks
    eddddy
    • #9
    • 13th Oct 17, 8:11 AM
    • #9
    • 13th Oct 17, 8:11 AM
    If you pay up this time then you will be stung whenever you need anything else as well.
    Originally posted by Tom99
    As long as you make it clear that you don't agree with the fee and are paying under protest - then you can take it to tribunal - I think the fee for that is £100.

    The Tribunal will then decide what is reasonable/correct.

    The link to LEASE above explains.

    But it would make sense for the OP to tell the freeholder that he/she intends taking the matter to Tribunal.

    Some freeholders will then adjust the charge as 'good will gesture', because then they can continue to speculatively charge others £285, rather than having a tribunal decision on record saying the £3.15 (or whatever) is the correct fee.
    • Tom99
    • By Tom99 13th Oct 17, 8:43 AM
    • 263 Posts
    • 125 Thanks
    Tom99
    I don't why you would even consider paying the freeholder £285 when the lease says £3.15.
    • eddddy
    • By eddddy 13th Oct 17, 9:09 AM
    • 5,277 Posts
    • 4,912 Thanks
    eddddy
    I don't why you would even consider paying the freeholder £285 when the lease says £3.15.
    Originally posted by Tom99
    The new lender's solicitor has been informed by the freeholder that the fee is £285.

    If the OP refuses to pay it, I suspect that the new lender might not proceed with the remortgage until the dispute is settled (e.g. the freeholder agrees to accept £3.15 or the OP agrees to pay £285) - the OP can check this with the lender.

    Resolving the dispute may take weeks or months - if it goes to tribunal.

    By paying now (under protest) and disputing later, the remortgage can proceed without any delay.
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