Co-freeholder's bank forced re-evaluation on us after loft conversion

ddeblasio

Hello,

looking for some guidance/input from someone who knows a bit on this matter or has gone through something similar.
We live on the upper floor of a small cottage in London and we own/share the freehold with our friend and neighbour downstairs. We needed extra space so we offered our neighbour to buy the loft (only accessible from our property), we agreed on a price and she accepted.

We found out that the previous owners of our flat had also started the paperwork to acquire the loft before moving out to Manchester and sell to us, so we asked the same solicitors to proceed with the change of the lease and all the relevant documentation. We were advised that there was nothing complicated and that this could have been sorted between them and our neighbour's solicitors as the process had already been initiated: we agreed to pay all the solicitor fees in addition to the sum for the transfer of ownership of the loft space.
This happened in December last year, in the meantime we were given the green flag from the council and the local authority (we are in conservation area) and our designs were approved. Solicitors said it was just a matter of time and said we could go ahead with the building work.

We have just finished building the loft (end of May!) and still this matter is not settled, both us and our neighbour are exhausted as the paperwork has not been finalised, solicitors are not keeping us updated from either side and actually are not talking to eachother but only mailing documentation. This is taking things to the extreme consequences to the point that we started calling to get updates, very often upsetting them as they are not expecting their clients to do the work for them, which we ended up doing anyway.

Now finally all the documents have been signed in the presence of witnesses and the upper floor flat footprint has been updated to include the loft area. We have just been informed that our neighbour's solicitors have got in touch with her lender who has requested a valuation which we will have to pay for, and this had never been mentioned before. We (and our solicitors) have opposed to the valuation as the loft area was never included in the original valuation of our neighbour's flat in the first place, therefore it should be irrelevant now, but the valuation has been forced on us nevertheless. Is this legal? Why do we have to pay £400 (in addition to all the other expenses for dragging this thing til now) if the value of the below flat has not been negatively affected by us acquiring the loft? In fact the downstairs flat has risen in value as the whole area in Clapham is very sought after after the extension of Clapham Junction station.
We do hope that the new valuation is only required for insurance purposes, but when banks get in the way you cannot help but feeling that things are going to get messy...

Thanks for reading through here, English is not my first language but I do hope my situation is clear and someone out there can give us their thoughts.

D.

agrinnall

It's too hard to read that solid block of text, put some paragraphs into it and you may find you'll get some responses.

phoebe1989seb

Edited into paragraphs for you to make reading/understanding a little easier

ddeblasio wrote: »

Hello,

looking for some guidance/input from someone who knows a bit on this matter or has gone through something similar.

We live on the upper floor of a small cottage in London and we own/share the freehold with our friend and neighbour downstairs. We needed extra space so we offered our neighbour to buy the loft (only accessible from our property), we agreed on a price and she accepted.

We found out that the previous owners of our flat had also started the paperwork to acquire the loft before moving out to Manchester and sell to us, so we asked the same solicitors to proceed with the change of the lease and all the relevant documentation.

We were advised that there was nothing complicated and that this could have been sorted between them and our neighbour's solicitors as the process had already been initiated: we agreed to pay all the solicitor fees in addition to the sum for the transfer of ownership of the loft space.

This happened in December last year, in the meantime we were given the green flag from the council and the local authority (we are in conservation area) and our designs were approved. Solicitors said it was just a matter of time and said we could go ahead with the building work.

We have just finished building the loft (end of May!) and still this matter is not settled, both us and our neighbour are exhausted as the paperwork has not been finalised, solicitors are not keeping us updated from either side and actually are not talking to eachother but only mailing documentation.

This is taking things to the extreme consequences to the point that we started calling to get updates, very often upsetting them as they are not expecting their clients to do the work for them, which we ended up doing anyway.

Now finally all the documents have been signed in the presence of witnesses and the upper floor flat footprint has been updated to include the loft area. We have just been informed that our neighbour's solicitors have got in touch with her lender who has requested a valuation which we will have to pay for, and this had never been mentioned before.

We (and our solicitors) have opposed to the valuation as the loft area was never included in the original valuation of our neighbour's flat in the first place, therefore it should be irrelevant now, but the valuation has been forced on us nevertheless.

Is this legal? Why do we have to pay £400 (in addition to all the other expenses for dragging this thing til now) if the value of the below flat has not been negatively affected by us acquiring the loft?

In fact the downstairs flat has risen in value as the whole area in Clapham is very sought after after the extension of Clapham Junction station. We do hope that the new valuation is only required for insurance purposes, but when banks get in the way you cannot help but feeling that things are going to get messy...

Thanks for reading through here, English is not my first language but I do hope my situation is clear and someone out there can give us their thoughts.

D.

JQ.

It's your neighbour who is forcing the cost of the valuation on you. It's their responsibility to pay it, but no doubt when you started this process you indemnified all their costs, which would be the correct thing to do.

They are selling off part of their property, it will have an impact on the value of their property, the mortgage co need to know what impact it has on the LTV and is therefore completely reasonable.

tim123456789

JQ. wrote: »

It's your neighbour who is forcing the cost of the valuation on you. It's their responsibility to pay it, but no doubt when you started this process you indemnified all their costs, which would be the correct thing to do.
.

But he isn't doing it wearing his hat as owner of the downstairs leasehold.

He's doing it wearing the hat of part owner of the freehold.

As the need for this revaluation seems to be entirely down to works done to the benefit of the upstairs leaseholder (and conversely the dis-benefit to the downstairs leaseholder) it seem to me appropriate that the freeholder should be expecting the upstairs leaseholder to be bearing this cost.

The fact that the freeholder and the leaseholder are the same people should be ignored. You have to consider the viewpoint from their legal status, not their real world persona.

propertyman

The reason for the valuation is that the sum insured for the building will have to be increased to reflect the enlarged building. NB this has nothing to do with market value, but the cost of replacing the building if damaged.

Your building insurers will have to be notified to increase cover accordingly and part of the paperwork should be an amendment to the share of costs between you based on your large flat size.

JQ.

tim123456789 wrote: »

But he isn't doing it wearing his hat as owner of the downstairs leasehold.

He's doing it wearing the hat of part owner of the freehold.

As the need for this revaluation seems to be entirely down to works done to the benefit of the upstairs leaseholder (and conversely the dis-benefit to the downstairs leaseholder) it seem to me appropriate that the freeholder should be expecting the upstairs leaseholder to be bearing this cost.

The fact that the freeholder and the leaseholder are the same people should be ignored. You have to consider the viewpoint from their legal status, not their real world persona.

So in summary, you totally agree with my post :rotfl::rotfl:

ddeblasio

Thanks all for the kind replies. We have separate insurers for the two flats so I believe it should be our insurer that re-valuates the extended property, not hers. I think our neighbour's lender wants to ensure that her property has not lost value in the process, which as I said, should not be the case as the loft was not included in the original valuation of the downstairs flat.