Lease extension quote from solicitors - opinions please

ripofflondon

Hi all

This is related to an earlier post.  My flat is on the ground floor of a house that was split into 2 flats in 1988.  In the normal English way, each flat was sold on a 99 year lease (the upstairs flat in 1988 and the downstairs one to me in 1997) and the upstairs leaseholder and me each continued paying £1/year ground rent to Mr X the freeholder (and owner of the house who'd split it into 2).  Then in about 2014/15, the upstairs leaseholder and me paid Mr X £20,000 for the freehold which we now own jointly, and since then we obviously haven't paid each other any ground rent.  

Back in March I discovered that a remortgage was unable to go ahead because the prospective new mortgage lendor picked up that my 99 year lease had 'only' 63 years left to run and, predictably, they said this is too short a time remaining.  My upstairs neighbour was in the same boat. 

Following advice by you lovely forumites, upstairs neighbour and I jointly approached a couple of firms of solicitors about getting a lease extension.  

The quote from Firm A was one letter sent to me and the other to the upstairs neighbour.  It said inter alia 'Legal Fee for dealing with the Lease extension Work £795.00 plus VAT & disbursements' plus a covering email that said 'We understand you are the freeholder and that your neighbour would also like to extend their Lease.  If you would both like to instruct us, we can reduce the main fee to £745 plus VAT & disbursements'. 

By contrast, the quote from Firm B said 'My quote would be £600 plus Vat and Disbursements for each Lease Extension' 

My question - if you were presented with these 2 quotes, would you believe firm A was saying that if upstairs neighbour & me instructed them jointly for our lease extensions – which we did - then the ‘main fee’ would be £745 + VAT & disbursements for both of us together, or that the main fee would be £745 + VAT & disbursements for each of us?

AskAsk

£745 + VAT for each, why would it be less than £795 + VAT just for you?

ripofflondon

AskAsk said:

£745 + VAT for each, why would it be less than £795 + VAT just for you?

Because doing 2 almost-identical lease extensions for the top and bottom floors of the same house isn’t anything like double the amount of work involved in doing 1.

Viewed through that prism, I thought / hoped firm A was offering us an all-in price that was considerably less than 2x the cost of 1 lease extension were we to instruct them jointly – which we did. 

AskAsk

ripofflondon said:

AskAsk said:

£745 + VAT for each, why would it be less than £795 + VAT just for you?

Because doing 2 almost-identical lease extensions for the top and bottom floors of the same house isn’t anything like double the amount of work involved in doing 1.

Viewed through that prism, I thought / hoped firm A was offering us an all-in price that was considerably less than 2x the cost of 1 lease extension were we to instruct them jointly – which we did. 

They quoted £795 + vat just for you.  If your neighbour also instruct them, they will reduce their quote for you to £745 + vat, so a £50 reduction before vat because as you say, there is economy to scale by doing two together. 

It also means your neighbour will get a £50 reduction as well, but you should check this as it isn't clear what "main fee" mean.

NameUnavailable

You say that say 'you are the freeholder' - you share the freehold so maybe there was some misunderstanding?

Probably easier to phone the solicitors and clarify directly with them rather than us lot who can only guess what they might mean!

eddddy

ripofflondon said:

...plus a covering email that said 'We understand you are the freeholder and that your neighbour would also like to extend their Lease.  If you would both like to instruct us, we can reduce the main fee to £745 plus VAT & disbursements'. 

As above, that sounds a little like the solicitor might have misunderstood the situation.

Maybe you did this already, but the key facts you need to give to a solicitor when asking for quotes are:


- You and Mr A. N. Other jointly own a freehold property, which contains 2 leasehold flats

- You own one of the leasehold flats and Mr A. N. Other owns the other leasehold flat

- You both want to extend your leases

- You have both agreed on the terms of the lease extension. You don't see any conflicts of interest.

- Both leasehold flats are mortgaged (if that's the case).


(Because the mortgage lenders will need to approve the terms of the lease extension, and sign deeds. So that's extra work for the solicitor. It's possible, but unlikely, that the mortgage lenders might also charge a fee for this.)  

But maybe your solicitor realised all of this anyway.

ripofflondon

eddddy said:

- You and Mr A. N. Other jointly own a freehold property, which contains 2 leasehold flats

- You own one of the leasehold flats and Mr A. N. Other owns the other leasehold flat

- You both want to extend your leases

- You have both agreed on the terms of the lease extension. You don't see any conflicts of interest.

- Both leasehold flats are mortgaged (if that's the case).

Hi - yes I can definitely confirm all of the above was communicated to, and understood by, the solicitor. 

In light of that, do you think I was right to believe they were quoting us £745 + VAT & disbursements for both of us together?  

ripofflondon

NameUnavailable said:

You say that say 'you are the freeholder' - you share the freehold so maybe there was some misunderstanding?

Probably easier to phone the solicitors and clarify directly with them rather than us lot who can only guess what they might mean!

We did, and they said they had meant they were quoting £745 + VAT & disbursements for each of us!  

So right now we are in a stalemate where they are saying 'each of you pay us £745 + VAT & disbursements or we won't give you the lease extensions' whereas we are saying 'we thought you were quoting £745 + VAT & disbursements for both of us together' 

Hence my question - I just wondered how anyone else in my/our position would have read their quote.  

AskAsk

ripofflondon said:

NameUnavailable said:

You say that say 'you are the freeholder' - you share the freehold so maybe there was some misunderstanding?

Probably easier to phone the solicitors and clarify directly with them rather than us lot who can only guess what they might mean!

We did, and they said they had meant they were quoting £745 + VAT & disbursements for each of us!  

So right now we are in a stalemate where they are saying 'each of you pay us £745 + VAT & disbursements or we won't give you the lease extensions' whereas we are saying 'we thought you were quoting £745 + VAT & disbursements for both of us together' 

Hence my question - I just wondered how anyone else in my/our position would have read their quote.  

£745 + VAT is far too low for work on two leases.  You have misunderstood the quote.

loubel

Agreed you have misunderstood. They are offering a small discount if both lease extensions are done together. They aren't offering a BOGOF deal.

ripofflondon

AskAsk said:

£745 + VAT is far too low for work on two leases.  You have misunderstood the quote.

Ah well.  I won't deny it was wishful thinking / hoping to take advantage of their clumsy wording on my part. 

I agree I'd have been in a stronger position if they had said something like '£745 + VAT for each, £795 + VAT for both' 

Still galling when you consider how little extra work doing the 2 leases together entailed.  Licence to print money!  

Anyway, thanks all of you for your input.