Charges for a bridging loan

DisillusionedLeaseholder

Anyone had this situation? Need help please? I’m a leaseholder with no mortgage but my freehold mgmt want to charge me £192 for the privilege of taking out a bridging loan as I needed money quickly. Considering my ground rent is only £100 a year!!!

MattMattMattUK

DisillusionedLeaseholder said:

Anyone had this situation? Need help please? I’m a leaseholder with no mortgage but my freehold mgmt want to charge me £192 for the privilege of taking out a bridging loan as I needed money quickly. Considering my ground rent is only £100 a year!!!

What is the actual question, are they allowed to do that, almost certainly yes, though it would depend on your leasehold agreement. Is it legal? Yes. 

Why would you take a bridging loan rather than a mortgage, the former is likely to be hugely more expensive than the latter and gives you far greater flexibility. 

eddddy

DisillusionedLeaseholder said:

Anyone had this situation? Need help please? I’m a leaseholder with no mortgage but my freehold mgmt want to charge me £192 for the privilege of taking out a bridging loan as I needed money quickly. Considering my ground rent is only £100 a year!!!

I would guess that the situation is as follows:

• Your lease requires you to give your freeholder a 'Notice of Charge' if anyone puts a charge on your leasehold flat

• The bridging loan company intend to put a charge on your leasehold flat.

• Your freeholder is allowed (by law) to insist that you to cover their reasonable costs in dealing with a 'Notice of Charge'

So you can check that your lease requires a 'Notice of Charge' and confirm that the bridging company plan to put a charge on your flat.

You could try arguing that £192 isn't a reasonable cost and ask your freeholder for a breakdown of the £192.

For example, if they say they just need to spend 30 mins typing details from your notice into their system - I think a tribunal might say £40 or £50 plus vat is a reasonable cost for 30 mins of Admin work.

But as with any dispute, how hard do you want to fight over that extra £100 to £150?

DisillusionedLeaseholder

Thank you Eddie, exactly what I thought. I think freeholders think they have a license to print money, even charging me £100 for changing my kitchen when I own my flat outright with no mortgage!!! Makes me so mad 😠 

DisillusionedLeaseholder

Thanks Matt, I wish I could have gone for a mortgage but I needed the money quickly and I’m 58 and didn’t need to borrow that much 

poseidon1

DisillusionedLeaseholder said:

Thank you Eddie, exactly what I thought. I think freeholders think they have a license to print money, even charging me £100 for changing my kitchen when I own my flat outright with no mortgage!!! Makes me so mad 😠 

Just a small point as a leaseholder you never own your property outright. As a leaseholder that privilege only arises if/when you acquire a share of the freehold, at that  point  you then get a direct say in fees levied at freeholder level.