Cost of section 42 notice and assigning benefit of lease to buyer

mich2020

I am a first time buyer and have had an offer accepted on a leasehold flat, that has turned out to have only 83 years left on the lease.  I was originally told 89 years and made my offer on that basis.  The sellers do not wish to extend the lease as part of the sale.  I have agreed to that as long as they start the lease extension process and assign the benefit to me as part of the sale (a section 42 notice I believe).  However, they are now saying that their solicitor's costs for doing this will be £2000 plus VAT and that they expect me to commit to paying that amount to their solicitor.  

Is anyone able to tell me whether that figure is in the right ballpark please?  From what I had read on here, I had thought that starting off the statutory lease extension process was reasonably straightforward and a lot cheaper than that!  

eddddy

£2k would be a ridiculously high fee just for serving a section 42 notice.

But what exactly is the quote for?

There are lots of different costs associated with doing a 'statutory lease extension' - which is what you describe. Those costs include:

• 1) Your legal fees for doing the lease extension. Serving a section 42 notice is the first step - there are lots of steps after that. (It usually takes 6 to 18 months)

• 2) Your valuation fees

• 3) The freeholder's legal fees for doing the lease extension

• 4) The freeholder's valuation fees

(Plus the cost of the lease extension.)


It's possible that £2k is a quote for all of bullet point 1 above - i.e. all your legal fees for doing every stage of a statutory lease extension. (It still sounds a bit high, but it's plausible.)


But I would very strongly suggest that you find your own specialist lease extension solicitor (and maybe a specialist lease extension valuer as well), rather than letting the seller's conveyancing solicitor get involved.

I've heard a few stories of conveyancing solicitors 'having a go' at lease extensions, and messing them up.

If your own conveyancing solicitor is part of a firm which also has a 'Landlord and Tenant Law' / lease extension specialist, you could use them. If not, I would find a separate specialist solicitor.

mich2020

Thanks, I am expecting there to be lots of steps and lots of costs, and I am intending to look for a specialist in lease extensions.  It is the high cost when I have asked the seller to do the minimum required to start it off that has taken me by surprise, and I am wondering whether they have misunderstood what is being asked for.  

This is what their solicitors have said they would need to do: estimated fees to prepare a Notice of Claim, amend the contract and Deed of Assignment - £2,000 plus VAT.

eddddy

mich2020 said:

 
This is what their solicitors have said they would need to do: estimated fees to prepare a Notice of Claim, amend the contract and Deed of Assignment - £2,000 plus VAT.

OK - so it sounds like the £2k is for this...

• Prepare and serve Section 42 notice (That's the Notice of Claim.)

• Then amend the sale/purchase contract - to say the seller must serve a Section 24 notice

• Then assign the benefit of the section 42 notice to you (so that you can take over lease extension process)

That sounds very expensive to me. But maybe I'm out of touch. (It's been a few years since I did this.)

You'll then have to hire your own solicitor to complete the process.

Realistically, probably all you can do it try to negotiate with the seller - to see if they'll contribute part/all of the £2k fee.

mich2020

Thank you very much for your help.  So far the sellers are refusing to negotiate, so I have pulled out and will see whether that prompts them to compromise.