Shared ownership lease extension extortion

Rysmee

Hi all, 
We have unfortunately got ourselves into a bad situation - being made worse by a housing association being very unhelpful. 
Background : We moved into to a shared ownership flat in 2012 and as first time buyers we did not realise the implications of the lease being down to 81 years. 
Our solicitors failed to make us properly aware of this ( I seem to remember a single paragraph in the mountain of paperwork stating that the lease was 'short' - but apart form that we were told nothing) - and I'll be completely honest - we were so desperate to get moved in that we didn't give another thought. 
Move on to 7 years later (so lease now down to 74 years :-( ) and time to sell. Obviously we had to put it on for sale with the HA for a nominated period. So in September 2019 its was on for sale with them. We had no interest for a year, and as we weren't in a hurry to move we simply left it with the HA to market. Its worth noting that I emailed them regularly to see if there was any interest and if there was anything else we could do to promote the flat. At no point did anyone (I know its not the HA's job but! ) advise us that we probably had no interest due to the short lease. 
Move on to September this year and we have eventually got an estate agent to market it, who immediately said 'your lease is going to be an issue'. 
We immediately got in touch with the HA and proceeded to pay £500 to have one of their appointed surveyors price up the lease extension. 
You can guess the next bit - two options of either £18k or 21k depending on ground rates!!!
We were absolutely shocked at this figure (we had about half of this in mind). 
The reason the marriage value is so high is because the surveyor has completely overvalued the property with the lease extension in place. 
We have had it valued at 220,000 previously, and the LE surveyor has put it in present form at 216,000. But he has then estimated the value to be 250,000 with an extended lease. This is completely inappropriate for a one bedroom flat in our area (and we know because 250 is our budget for moving to a 2 bed!)
I have spoken to the Lease holders advice service who unfortunately weren't much help - they simply explained that the HA does not have to grant us the LE and they don't have to adhere to any guidelines that would apply if we owned 100% of the property. All this we already knew, what I really need to know is : 
1. Do we have the right to negotiate with the HA to get the price down?
2. Do we have the right to get another surveyor round to get a second opinion?
3. I understand we can't go to tribunal - but there must be something we can do ?!
4. Do we have a case fighting our old solicitors to the fact that we were not made aware of the seriousness of the situation we were buying into?
5. Are the HA even slightly responsible for not making us aware (either when we purchased the property and when we put it up for sale over a year ago with them)?
We feel so stupid to have got into this situation but we simply didn't know. We now feel that we are stuck here forever with a growing child and our lack of space is just going to get worse. 
To make matters worse communicating with the HA is just ridiculous, and I'm lucky if I get a reply within a week to any emails asking important questions - and even then they go unanswered. We are at a dead end and just feel that no one is out there to help us. 
I'm really hoping someone out there can offer any helpful information to help us move forward, and get out of this hole we have unwittingly dug ourselves into.  
Many thanks, 
Ryan.

princeofpounds

1. Yes you can negotiate, but they do not have to agree, so unlikely that will get you anywhere. But it is worth trying, as long as you base your criticism on good evidence that the surveyor was too high with the valuation.
2. Yes, but in the context of the negotiation it may not help you at all - the HA will likely rely on their own surveyor. However, it may be worth doing to establish for yourself what your 'loss' is by conceding to the HA's terms. 
3. Not really. It's a trap in the shared ownership system that they were specifically excluded from the statutory process to extend leases. They don't even have to let you extend, in a way you are lucky they are even doing a RICS valuation of the extension (even if you disagree with the results). 
4. Possibly yes. But I'm not sure how far you will get, as they did let you know about the length of the lease. It's more that the potential implications in 2+ years' time were not explained to you, it seems. But could be worth consulting with a litigation specialist with the original documents.
5. No, they are not responsible.

Honestly, unless you can staircase to 100% then I think your best bet may to do the extension. If the surveyor's valuation is 10-15% too high, then the cost of the extension will be slightly too high (maybe not 10-15% exactly however as it depends on the ground rent terms before and after too). That's a 'loss' of maybe 2-3k, not great but in the scheme of things worth it to unlock yourselves from the trap. 

I would also write to your MP - this is becoming more of a political issue as the first generation of SO with 90 year leases are hitting marriage value problems. We get far more people in your situation on the board now than we used to. 

Rysmee

Ok many thanks for your reply. 
I assume if we staircase to 100% then the rules that apply to private leaseholders then apply? 
It would be lovely to just accept the 18k and do it, but who has 18k just laying about under the bed?! Especially at the moment with times as they are. 
The H/A have also been very lacking in further information upon the next steps - are they seriously saying that if we somehow stumped up 18k that we would be expected to market the property for their estimate of £250k? And when it doesn't sell and we have to drop the price - that means we have overpaid for the lease extension. 
Another annoying side note is that being shared ownership, we are expected to pay for the full lease extension yet 50% of any value increase is being retained by the H/A! How is that fair?!  

princeofpounds

Yes, at 100% you would be a normal leasehold flat, not SO. You would then have access to the statutory process. I think it's worth underlining again that the statutory process would not be vastly cheaper, assuming that the valuation you have been offered is a standard RICS valuation.

I can't comment on what the HA would make you market your property at if you extended the lease, but yes, it's possible they would pick a number around that level, at least initially. If it fails to sell, it doesn't mean that just that the lease extension valuation is the problem - it will be a factor to the tune of that probable 2-3k I mentioned, but the real issue would just be the overall valuation of the apartment. 

No, it is not strictly 'fair' that you have to pay for the whole lease extension yet give away half the value (I am unsure if or how that gets addressed in staircasing). However, unfortunate as it is, reality is not fair in the primary-school-share-your-toys sense - this is the deal with shared ownership and it is 'fair' for both sides of the deal to meet the terms they signed up to. 

Kelstar1

We have just extended our lease we had 81 yrs and had no idea about the marriage value if it went under 80yrs, no one said a thing, it was brought to our attention when we put our house up for sale, we had a buyer who 2 months in said she will drop out if we don’t extend so we had to or we would lose the house we wanted, we were lucky though it was £5k but if we hadn’t put our house up for sale we would of been none the wiser, It’s the biggest scam ever! 

Kelstar1

just seen that you are expected to pay for 100% of the property that seems so unfair,  we had to pay for 50% that we owed which wasn’t too bad