Mislead by Estate Agent - Auction House with regards to a flat lease extension cost

Winniethepoodles2025

Earlier this year I purchased a flat - one of a block of four through Modern Auction and a local Estate Agent. When I viewed the flat the estate agent gave me a hand written lease extension amount on their headed notepaper as there are only 49 years left on the lease, so using the amounts they gave me in writing, dictated the price I bid. I managed to buy the flat outside of the actual auction process by negotiation with the owner however still had to pay the fees and adhere to the rules of purchase through modern Auction. Since I purchased the flat I have now made enquiries with the property company about the lease extension and its considerably higher that I was led to believe by the Estate Agents by some £13,000 which when added to the fees and purchase price takes it over the current market value. My solicitor says that the Property owners will not negotiate and the only way to get them to negotiate will be to pay for a survey under a section 42 Notice Of Claim and also to pay for their survey and fees which they do not have to disclose to me. Is there anything I can do about being misled by the Estate Agents or indeed Is there anything that can be done to make the Property Company negotiate to around the figure that I was originally told ?

eddddy

What exactly did the note from the estate agent say?

Where did the estate agent say they got their lease extension price from?



For example, it could be (using made up numbers) ...

• The estate agent said that by following the statutory process (i.e. serving a section 42 notice), you should expect to pay £20k for a lease extension

• But you've tried the informal route - by asking the freeholder to make you an offer - and their offer is £33k

• It's completely possible that the freeholder is informally asking you for £13k more than the statutory route would cost.

Or...

• The freeholder has simply decided to increase their offer price by £13k (which they are completely free to do)

(Having said this, whatever the estate agent has written won't be legally binding anyway. But depending on the circumstances, you might have recourse to the Property Ombudsman.)

born_again

Could they be adding on any discount on the price you paid by negotiation. To cover their shortfall?

eddddy

born_again said:

Could they be adding on any discount on the price you paid by negotiation. To cover their shortfall?

I'm not sure if this is what you mean - but the OP would have bought the flat from the leaseholder.

It's the freeholder who is quoting a price for the lease extension.

The freeholder is almost certainly not connected to the seller/leaseholder. The freeholder won't be interested in how much of a discount the seller/leaseholder agreed to.

Winniethepoodles2025

eddddy said:

What exactly did the note from the estate agent say?

Where did the estate agent say they got their lease extension price from?



For example, it could be (using made up numbers) ...

• The estate agent said that by following the statutory process (i.e. serving a section 42 notice), you should expect to pay £20k for a lease extension

• But you've tried the informal route - by asking the freeholder to make you an offer - and their offer is £33k

• It's completely possible that the freeholder is informally asking you for £13k more than the statutory route would cost.

Or...

• The freeholder has simply decided to increase their offer price by £13k (which they are completely free to do)

(Having said this, whatever the estate agent has written won't be legally binding anyway. But depending on the circumstances, you might have recourse to the Property Ombudsman.)

The headed paper from the estate agent given to me when I viewed said 99 year lease extension £37k and 999 year lease extension £? So when I spoke to the agent they said that the 999 year lease extension was up for negotiation but they said that they handle a lot of these flat sales so were able to put the figure on the 99 lease extension ? I have tried the informal route via my solicitor to ask the Leaseholder if we can extend and if so what are the terms and the cost will be and they have responded (after I paid the fees of £480.00) that the lease extension to 99 years so another 51 years is 50K and no negotiation ? I have a pdf of the paperwork they gave me

eddddy

You probably need to find out what a statutory lease extension might cost.

What is the market value of the flat, and what is the ground rent?

Have you tried any online lease extension calculators? (Try googling 'lease extension calculator' - but for some, you might have to pretend your lease has 50 years left.)




Is the estate agent a member of the Property Ombudsman Scheme? Most are.

In theory, if the estate agent gave you incorrect information, you could complain to the Property Ombudsman,  and the Ombudsman could order the Estate Agent to pay you compensation - but it really depends on exactly what the Estate Agent said to you.

But you should probably check the possible cost of a statutory lease extension first - as that might match what the estate agent said.