Leasehold Extension Fees

minervagothic

An agent for the freeholder has charged us £900 administration fee for extending a lease.  This seems excessive to me.  I'm going to ask for a breakdown of what this fee entails but has anybody had to pay this large amount and is this the norm?  Thanks.

eddddy

Is this for a "statutory lease extension" or for an "informal lease extension"?

If it's informal lease extension, the freeholder can charge any fees they choose.

Although, if you mean they've done the lease extension and didn't tell you about the fee in advance and now want you to pay it - I guess normal consumer protection laws might apply.

(That is the same consumer protection laws that would apply if, say, a plumber or a car mechanic did work for you without quoting a price in advance - and then sent you a bill.)


Edit to add...
Just to clarify - how is this fee described? For example,

• Is it an admin fee for extending the lease?
• Or is it an admin fee for the admin work that the agent has to do as a result of you  extending the lease? (e.g. updating their records etc)

minervagothic

It's for an informal lease extension as we requested it.  The £900 fee is for the freeholder's costs.

Thank you for your response.

pcnhelpme

Hey Eddddy, 

Im about to get started with an informal extension, what other costs did you have to pay and how did you approach the negotiation? 

Thanks! 

eddddy

pcnhelpme said:

Im about to get started with an informal extension, what other costs did you have to pay and how did you approach the negotiation? 

There are no rules with an informal lease extension.

If you want, you can start by making your freeholder an offer for an extension - or you can tell the freeholder that you're interested in an extension and ask them to make an offer to you. Then you negotiate.

• Freeholders often ask for a valuation fee up front - maybe around £400 to £700.

• If you go ahead, the freeholder will expect you to pay their legal fees. A big freeholder might quote a fixed fee (like £900), a small one might just say you'll have to pay whatever their solicitor charges.

• Plus the cost of the lease extension.

A lot of freeholders might try to 'rip you off' in the negotiation, and revised lease terms. So unless you really know what you're doing, it might be best to get advice from a lease extension valuer.