Lease Extension - buyer’s solicitors costs

autumnbaby

I’m a FTB in the process of purchasing a leasehold flat. The seller will be extending the lease before exchange. The seller is meeting the premium of the lease extension and the associated costs/ fees of the freeholder and their own solicitor.  

My solicitor has informed me today that they will charge me an additional fee for the additional work of approving the lease extension.

Is it reasonable to try and ask for the seller to cover these additional costs?

propertyrental

You can ask but don't hold your breath....

But as with all cost negotiations, a lot depends who has the most to lose, and who has the biggest B***s!

eddddy

autumnbaby said:

Is it reasonable to try and ask for the seller to cover these additional costs?

How will you make that payment happen? Will you ask your solicitor to make it a term in your purchase contract?

So if your solicitor doesn't like the terms of the lease extension, and therefore the purchase doesn't happen - you won't get the costs covered.

(Or do you plan to have some kind of separate agreement/contract to deal with this?)

Depending on the amount of money involved, your solicitor might have to report it to your mortgage lender as an incentive payment from the seller.


Or you could just try reducing your offer, to compensate for your higher legal fees. (But that might involve getting a revised mortgage offer, as well.)

user1977

eddddy said:

autumnbaby said:

Is it reasonable to try and ask for the seller to cover these additional costs?

How will you make that payment happen? Will you ask your solicitor to make it a term in your purchase contract?

So if your solicitor doesn't like the terms of the lease extension, and therefore the purchase doesn't happen - you won't get the costs covered.

(Or do you plan to have some kind of separate agreement/contract to deal with this?)

It's fairly straightforward and commonplace (for other types of transaction) to get a fees undertaking via the solicitors, which can be stated to apply whether or not the transaction completes. But I don't know what the norm is in this scenario.

eddddy

user1977 said:

eddddy said:

autumnbaby said:

Is it reasonable to try and ask for the seller to cover these additional costs?

How will you make that payment happen? Will you ask your solicitor to make it a term in your purchase contract?

So if your solicitor doesn't like the terms of the lease extension, and therefore the purchase doesn't happen - you won't get the costs covered.

(Or do you plan to have some kind of separate agreement/contract to deal with this?)

It's fairly straightforward and commonplace (for other types of transaction) to get a fees undertaking via the solicitors, which can be stated to apply whether or not the transaction completes. But I don't know what the norm is in this scenario.

Yep - but that's equally problematic.

It wasn't so much the mechanics I was questioning, it was the terms of the agreement.

i.e. What happens if the extra lease extension checking legal fees are incurred...

And then the buyer changes their mind about buying...

• maybe because the terms of the lease extension are unacceptable
• or maybe for a different  'good' reason
• or maybe for a different 'bad' reason

Or the seller changes their mind about selling...

• maybe for a 'good' reason
• or maybe for a 'bad' reason

And/or the buyer and seller both blame the other party for the sale falling through.


Given all those different possible scenarios, how do you decide which party should be liable for that chunk of the buyer's legal fees?

Tiglet2

autumnbaby said:

I’m a FTB in the process of purchasing a leasehold flat. The seller will be extending the lease before exchange. The seller is meeting the premium of the lease extension and the associated costs/ fees of the freeholder and their own solicitor.  

My solicitor has informed me today that they will charge me an additional fee for the additional work of approving the lease extension.

Is it reasonable to try and ask for the seller to cover these additional costs?

The seller is prepared to cover the cost of extending the lease which you will benefit from.  The seller is also prepared to accept the extra fees being charged by their solicitor and the freeholder/freeholder's solicitor for this lease extension that you will benefit from.

Your solicitor is adding a fee to your transaction as they would have to do more work than originally agreed.  It is reasonable that they charge for the extra work they have to do and not included in a normal conveyancing transaction.  

You could ask the seller to pay your additional solicitor costs.  The seller equally could decide not to assist in the lease extension and, instead insist you own the property for two years before you are entitled to apply for it yourself, with all costs paid by you.  

How long is the length of lease remaining?  Was the property being advertised at a price taking into account the length of the lease?  Or didn't the EA know how long was remaining and the property was valued as though it had a much longer remaining lease length?

I don't think you are being reasonable.  You will benefit from the lease extension without waiting the two years necessary before you qualified to apply for it yourself.  If you applied for it yourself in two years, all the costs would fall to you, not just your additional solicitor fees.