Absurd Freeholder notice fee

Love_to_Save_2

Hi All,

I have been an avid reader of this forum and I could really do with some advice.

Me and my girlfriend are nearing exchange for a leasehold house (built in 1959). I have been going through the lease to ensure that we understand the conditions fully. Our solicitor had advised us that a notice fee would need to be paid to the freeholder upon completion.

Now, the lease specifically states the following -

"Within one month of every assignment assent transfer or underlease (otherwise than by way of mortgage) of or relating to the demised premises or any part thereof to give notice thereof in writing with particulars thereof to the Lessor's Solicitors and produce such assignment assent transfer or underlease or in the case of a devaluation of the interest of the Lessee not perfected by an assent within twelve months of the happening of thereof to produce to the Lessor's Solicitor the Probate of the Will or the Letters of Administration under which such devolution arises and to pay them a registration fee of ten shillings and sixpence in respect of each assignment transfer or underlease or devolution."

Our solicitor wrote to the freeholder to confirm the notice fee, they have come back to say that the notice fee is £240! Our solicitor simply said to us that this will need to be paid on completion. I have challenged this fee as I am sure that the fee should be as explicitly stated in the lease (in today's money). I just wanted to check my understanding on this matter.

It seems to me that the freeholder is just trying it on and the solicitor doesn't seem to bat an eyelid. Can the fee vary from the lease for any reason; it's a straight fixed fee? The solicitor said that the fee is probably admin fees as the freeholder employs a management company to deal with the affairs. I don't know what to believe but even if it were an admin fee (for which there is no provision in the lease) it's definately not what I would call reasonable.

I have instructed the solictor that they should send a cheque for the stated fee in the lease and send a highlighted copy of the relevant paragraph by recorded delivery. This can then be used as proof of notification? The solicitor thinks that I will need to pay the £240 anyway but I don't think this is right from what I have read online.

Thanks in advance.

ging84

take your solicitors advice and pay it
i'm sure you could try and fight it, you might succeed in getting it reduced, but at the cost of many times more in litigation, and causing yourself a massive delay

ValHaller

ging84 wrote: »

take your solicitors advice and pay it
i'm sure you could try and fight it, you might succeed in getting it reduced, but at the cost of many times more in litigation, and causing yourself a massive delay

Really????

If there is no uplift clause, then the fee is 53p. I think the solicitor needs to justify why OP should pay £240. If solicitor has no good justification apart from not rocking the boat, then I suggest OP considers instructing solicitor to forward 53p within a month together with the notice and let the freeholder justify the increased fee.

It does not look like it will prevent completion - it may cause complications, but I would think that this is one which could go to the leasehold valuation tribunal. Others with more experience of leasehold will be better placed to say whether this is reasonable.

anselld

Whilst I would certainly challenge the solicitor to explain the reason, my view is that you employ a solicitor to know the law and what is legally required to be done. Why would you contradict their expert advice with advice from random strangers on the internet?

ValHaller

anselld wrote: »

Whilst I would certainly challenge the solicitor to explain the reason, my view is that you employ a solicitor to know the law and what is legally required to be done. Why would you contradict their expert advice with advice from random strangers on the internet?

You certainly do employ a solicitor to know the law. But, without an explanation, this one appears to be spending the client's fee to avoid rocking the boat at a cost of a further £239.47 to OP.

Remember that you too are a random stranger and I advise OP to take your advice with a pinch of your salt.

anselld

ValHaller wrote: »

Remember that you too are a random stranger and I advise OP to take your advice with a pinch of your salt.

Of course! .... and yours.

Richard_Webster

Some mortgage lenders require a formal receipted notice of assignment. Freeholders such as this often argue that the 10/6 fee is to receive the notice but if you want it sent back receipted then you have to pay the £240!

If the lender will accept sufficient evidence of service short of a formal receipt then your solicitor can simply pay the 53p and send the letter "advise receipt" (with a small extra charge for that) and then he can provide the lender with evidence of service.

If the lender insists on the notice the solicitor has sent being sent back then the solicitor has little choice. Typically he will get a fax telling him the feeis £240. He can try arguing that the lease says otherwise (and suspect if the matter was litigated he would be supported) but the cost of going to court would be a lot more than the difference. Meanwhile the freeholder sits there and does nothing beyond saying his fee is £240.

So see if your solicitor can try the 53p with notice sent "advise receipt" route. Does depend on lender's attitude.

ValHaller

Richard_Webster wrote: »

Some mortgage lenders require a formal receipted notice of assignment. Freeholders such as this often argue that the 10/6 fee is to receive the notice but if you want it sent back receipted then you have to pay the £240!

If the lender will accept sufficient evidence of service short of a formal receipt then your solicitor can simply pay the 53p and send the letter "advise receipt" (with a small extra charge for that) and then he can provide the lender with evidence of service.

If the lender insists on the notice the solicitor has sent being sent back then the solicitor has little choice. Typically he will get a fax telling him the feeis £240. He can try arguing that the lease says otherwise (and suspect if the matter was litigated he would be supported) but the cost of going to court would be a lot more than the difference. Meanwhile the freeholder sits there and does nothing beyond saying his fee is £240.

So see if your solicitor can try the 53p with notice sent "advise receipt" route. Does depend on lender's attitude.

I would suggest that if the full £240 is demanded, OP makes sure solicitor adds a covering note that it is paid under protest and OP consider a DIY claim in the small claims court. That would not be too expensive nor carry significant risk. A receipting fee might be reasonable up to £20 or so.

propertyman

The simple answer is that the lease is clearly

to pay them a registration fee of ten shillings and sixpence

53p.

You should ask your solicitor to not be an idiot as the lease is quite clear and
a contact your lender to see if they will require a receipted notice or
b that registration at HMLR is adequate

In most cases notices aren't receipted unless specifically asked for and evidence of service of notice and an envelope with 53p served on the freeholder's solicitors should be adequate. The lender should be told that there is no obligation on the FH to receipt the notice, the only obligation is to give notice.

The tendency in these cases is to take the line of least resistance-sausage machine conveyancing for a tiny fee and avoid incurring time and effort.

Fight the machine

propertyman

ValHaller wrote: »

but I would think that this is one which could go to the leasehold valuation tribunal. Others with more experience of leasehold will be better placed to say whether this is reasonable.

Sadly not VH.

Notice fees are not subject to control under CLRA 2002 sch 11 and cannot be refered to the FTT (nee LVT)

ValHaller

propertyman wrote: »

Sadly not VH.

Notice fees are not subject to control under CLRA 2002 sch 11 and cannot be refered to the FTT (nee LVT)

Fair enough. Although I have learned from you and others that they can potentially be used for a lot of leasehold issues.