Reasonable freeholder fees to answer sale enquiries

LaurenJ88

Hi,

I am currently in the process of selling my flat, which has been a complete mess from start to finish due to a change of management company that no-one informed the leaseholders off for 6 months.

I have paid £400 to the management company to produce the LPE1, the buyers solicitor has raised an enquiry as the freeholder title differs to the the LPE1. The freeholder has said they will charge £750 to amend this.
They have also said that their fees for answering additional enquiries will be £500 each paid in advance.
My solicitor has advised to take this is first tier tribunal as the fees are unreasonable but that could take months and will guarantee my whole move falls through. Also, I don't really know what would be deemed as reasonable, Do I have any options?

subjecttocontract

The most I have every paid for a sellers information pack from Management Company is about £300 and I've never been charged extra for subsequent enquiries. Looks like you're between a rock & a hard place where you either pay or delay and lose your sale. I'd certainly be asking my solicitor if I had any other options.

eddddy

LaurenJ88 said:

My solicitor has advised to take this is first tier tribunal as the fees are unreasonable but that could take months and will guarantee my whole move falls through. 

You can go ahead with the sale and go to tribunal afterwards - so this shouldn't delay the sale.


BUT... I don't think the situation is as straightforward as your solicitor suggests...

You can challenge Leasehold Admin Charges at a tribunal, if they are made by the management company for things that your lease requires them to do (like grant consent for alterations, grant consent for subletting etc).


But your lease probably doesn't require your management company to complete an LPE1, or answer pre-contract enquiries. So the tribunal might say fees for these things are outside their jurisdiction.

(In past cases, the tribunals have sometimes allowed challenges for LPE1 fees, and sometimes not. I guess it might depend on the precise wording of your lease. And conveyancing solicitors aren't always experts on leasehold law.)


Also, if you want to challenge admin charges at a tribunal, the normal advice is to tell the management company that you're paying under protest. But...

• If you say "I'll pay the fee under protest, and I will challenge it at tribunal"

• Then the management company might say "In that case, we will not answer any pre-contract enquiries - unless you agree to our fees"

And if you agree to the fees, you cannot later challenge them at tribunal.

If you simply pay without saying anything (i.e. you don't say you agree or disagree with the fees), a tribunal normally says that paying without saying anything isn't equivalent to agreeing to the fees. So maybe you could try that approach.

 

JM68

As others have said, £300 is the most we have paid. 

It sounds like they are simply using you as cash cow.  Do they state they are 'regulated by RICS'?  If so, you could say you don't think they are complying with the RICS code (link below - see part 13).

https://www.rics.org/profession-standards/rics-standards-and-guidance/sector-standards/real-estate-standards/service-charge-residential-management-code

As you have already paid the £400, are you certain you need to pay the £750?  For example, if you have paid and they completed the form wrongly could you argue they need to amend and correct what you have paid for already. 

Or has there been a recent change of freeholder and that has not gone through the Land Registry yet, and that is what they want £750 to do?  If so, this must have happened in other sales and maybe there is a way around this.

LaurenJ88

This was the response from the freeholder, the freeholder changed in 2020. His wording to me sounds like he is being deliberately difficult to prevent me selling the property.

I agree re the £400 I have already paid and I have challenged this.

onemouseplace

£750 to receive notice of assignment or charge is also daylight robbery for your buyer - hopefully your lease says something about only being able to charge a reasonable fee for this?  

These are not reasonable costs in any way.

subjecttocontract

Of course the buying up of freeholds is a business and maximising income from it is exactly what one would expect. These people may be entirely new and getting advice from someone or they may be old hands and know the ropes.

loubel

What is the query you have raised with the freeholder? It sounds like  you've paid the management company to produce the LPE1 which they did but with an error and you've asked the freeholder to confirm their answers are correct? That would be unusual - why wouldn't you go back to the Man. Co.? Or have you sent the freeholder a fresh LPE1 to answer? 

JM68

The more I read about the lack of co-operation from freeholders the worse for you, I fear.  There appear to be no consequences (for them) if they don't respond to queries or help complete the LPE1.

In the short term can you see if Urang can deal with the queries, to the satisfaction of the buyer?  I googled them and (if it's the right one) they appear to say they are regulated by RICS.

If that fails it may be the case you either need to pay the absurd fees or lose this sale and then take legal advice about your options e.g. whether a Tribunal can do anything, explore whether Right to Manage could be a solution.

LaurenJ88

loubel said:

What is the query you have raised with the freeholder? It sounds like  you've paid the management company to produce the LPE1 which they did but with an error and you've asked the freeholder to confirm their answers are correct? That would be unusual - why wouldn't you go back to the Man. Co.? Or have you sent the freeholder a fresh LPE1 to answer? 

This is where I'm struggling, the management company just keep telling my solicitor to ask the freeholder, the freeholder is saying ask the management company.
The name on the LPE1 differs to the title on the freeholder deed, I've pushed back saying that this is for them to make sure the information is correct but I'm getting nowhere.
It's all getting very nasty so I fear my only option is to report them to RICS, the property ombudsman and go to tribunal.

loubel

So the management company, who you are paying service charges to, have said that one person/company is the freeholder but the Deeds say it's someone else? Which one are you writing to with enquiries? Who are you paying ground rent to, the freeholder directly or the man co? Does the man co think the freeholder is the one who bought in 2020, the one before that or someone else entirely?