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  • FIRST POST
    • sponge12345
    • By sponge12345 6th Jan 18, 5:46 PM
    • 5Posts
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    sponge12345
    Landlord overcharging for Lease Extension (section 42)
    • #1
    • 6th Jan 18, 5:46 PM
    Landlord overcharging for Lease Extension (section 42) 6th Jan 18 at 5:46 PM
    Hi,

    I am extending my lease via the statutory route. My flat is in York and worth about £215000. I have 84 years left on the current lease.
    I have had a surveyor value the extension premium at £4000. My solicitor served a section 42 notice at £3000.
    The landlords counter notice stated £7000 for the extension and the landlords solicitor/surveyor will not negotiate on the extension price at all. The end of the 6 month statutory negotiation period very close, so the deadline is approaching to accept the counter offer or go to tribunal.

    It seems to me that the landlord knows that if I were to take this case to the first tier tribunal to get the tribunal to decide the price it would cost me an extra £2k to £3k in legal costs. So basically the landlord knows he can over charge me by £3000 for the lease extension. This makes me very angry, £3000 might not seem like a huge amount but its a lot to me.

    So I am powerless to negotiate the last £3000? Is there anything I can do? Do I just have to pay £3000 more for my lease than its worth?

    I'd be very grateful for any advice, thanks.
    Peter
    Last edited by sponge12345; 19-01-2018 at 11:58 AM. Reason: correction
Page 1
    • Typhoon2000
    • By Typhoon2000 6th Jan 18, 6:55 PM
    • 861 Posts
    • 420 Thanks
    Typhoon2000
    • #2
    • 6th Jan 18, 6:55 PM
    • #2
    • 6th Jan 18, 6:55 PM
    Are you sure that!!!8217;s how much it will cost you? It would cost the freeholder the same then, and you don!!!8217;t need pay any of his cost after it goes to tribunal. So he would be worse of compared to you if the tribunal decides on £4000. I would let this go to tribunal.
    • anselld
    • By anselld 6th Jan 18, 7:35 PM
    • 5,758 Posts
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    anselld
    • #3
    • 6th Jan 18, 7:35 PM
    • #3
    • 6th Jan 18, 7:35 PM
    Surveyors opinions are just estimates. Your surveyor will generally estimate on the low side, the Landlords on the high side. The tribunal will probably decide somewhere in the middle.

    You chose to go the statutory route. You must have factored the fees to take it to conclusion.
    • sponge12345
    • By sponge12345 7th Jan 18, 12:19 AM
    • 5 Posts
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    sponge12345
    • #4
    • 7th Jan 18, 12:19 AM
    • #4
    • 7th Jan 18, 12:19 AM
    Thanks anselld
    My surveyor did a true and accurate valuation as I believe all surveyors should, its when serving the notices that the estimate is lowered for the leaseholders benefit or raised for the landlords benefit.
    My surveyor valued the flat at £4000 and the section 42 notice was served at £3000.
    The online extension calculators agree with the £4000 figure. I think this figure is pretty accurate, but I'd be happy to pay up to £5000!

    But the landlord wants £7000 and won't negotiate!!! Also I should be paying what the lease extension is worth, not meeting in the middle from some arbitrary upper figure.

    And as explained I can't see what incentive there is for the landlord to negotiate at all because he knows the tribunal will be costly for me in legal costs.
    Last edited by sponge12345; 07-01-2018 at 1:15 AM. Reason: thx
    • sponge12345
    • By sponge12345 7th Jan 18, 12:21 AM
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    sponge12345
    • #5
    • 7th Jan 18, 12:21 AM
    • #5
    • 7th Jan 18, 12:21 AM
    thanks Typhoon2000
    I dont know for sure how much it would cost to go to the Tribunal. I did ask my solicitor but didn't get a simple answer, I'll ask again. But I've looked around on the Internet and £2k to £3k seems like a rough approximation. (unless someone can confirm otherwise).
    Last edited by sponge12345; 07-01-2018 at 1:16 AM. Reason: add
    • strawberries1
    • By strawberries1 7th Jan 18, 12:31 AM
    • 677 Posts
    • 146 Thanks
    strawberries1
    • #6
    • 7th Jan 18, 12:31 AM
    • #6
    • 7th Jan 18, 12:31 AM
    What did you decide to do OP?
    How much did your solicitors charge to handle this extension please?
    I'm in a similar position.
    • Tom99
    • By Tom99 7th Jan 18, 3:24 AM
    • 2,220 Posts
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    Tom99
    • #7
    • 7th Jan 18, 3:24 AM
    • #7
    • 7th Jan 18, 3:24 AM
    Are you able to make a take it or leave it 'Without Prejudice save as to Costs' offer to settle at say £4,500 or £5,000?

    https://www.leaseholdknowledge.com/lease-extension
    Last edited by Tom99; 07-01-2018 at 6:43 AM.
    • anselld
    • By anselld 7th Jan 18, 7:30 AM
    • 5,758 Posts
    • 5,432 Thanks
    anselld
    • #8
    • 7th Jan 18, 7:30 AM
    • #8
    • 7th Jan 18, 7:30 AM
    My surveyor did a true and accurate valuation
    Originally posted by sponge12345
    Until the tribunal have decided the accuracy of his estimate cannot be known. It is not an exact science.

    The online extension calculators agree with the £4000 figure.
    Originally posted by sponge12345
    I don!!!8217;t see how you can say that. All the calculators I have seen give a range of values, again reflecting the non-exact nature of the estimate.


    I'd be happy to pay up to £5000!
    Originally posted by sponge12345
    ...so make that offer.

    And as explained I can't see what incentive there is for the landlord to negotiate
    Originally posted by sponge12345
    You have to create the incentive by offering more than he thinks he may be awarded at Tribunal. You have clearly not done that at £3000.
    • Tom99
    • By Tom99 7th Jan 18, 8:49 AM
    • 2,220 Posts
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    Tom99
    • #9
    • 7th Jan 18, 8:49 AM
    • #9
    • 7th Jan 18, 8:49 AM
    What have you offered so far?
    • da_rule
    • By da_rule 7th Jan 18, 9:11 AM
    • 2,678 Posts
    • 2,350 Thanks
    da_rule
    With the deadline being so close, you don!!!8217;t have a lot of time to sort this. From the looks of it, the current tribunal fees are a £100 listing fee and a £200 hearing fee (plus legal costs). The tribunal can award costs to one of the parties if the other has been unreasonable (i.e. refused to negotiate).

    The problem you seem to have is that it appears you have also failed to negotiate. You know the lease extension value is £4000 but you!!!8217;ve only offered £3000 and it would appear that you haven!!!8217;t offered anything further to try and bring the matter to a conclusion.

    Personally if I was your freeholder now, I!!!8217;d wait. Unless you sent me a really tempting offer in the next two weeks I would just let the clock tick and the matter would come to an end (and then I!!!8217;d send you a nice invoice for my legal costs) or you!!!8217;d have to pay to take me to a tribunal.
    • m0bov
    • By m0bov 7th Jan 18, 9:16 AM
    • 1,290 Posts
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    m0bov
    The surveyor has done you no favours by offering a silly amount. This got the freeholders back up understandabily. Off a realistic amount. Whats the point in paying someone to value then pluck a figure out of the air and offer that? Offer 5k take it or leave it.
    • steampowered
    • By steampowered 7th Jan 18, 9:43 AM
    • 2,574 Posts
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    steampowered
    The £2k - £3k is presumably for cases which go all the way through the Tribunal process.

    You can still negotiate after tribunal proceedings have been issued. If the case settles you simply withdraw the proceedings.

    I would be very tempted to go ahead and issue tribunal proceedings. That will show the landlord that you are serious and force them to communicate.

    Alongside issuing the tribunal proceedings, your solicitors can send the landlord a separate 'without prejudice' letter offering £4k in full and final settlement of the claim.
    • sponge12345
    • By sponge12345 7th Jan 18, 1:15 PM
    • 5 Posts
    • 0 Thanks
    sponge12345
    Hi, I've deleted this post for reasons of anonymity. I'm probably being a bit stupid but just in case.
    When everything is finished I'll update the thread and tell you what happened.
    Last edited by sponge12345; 08-01-2018 at 10:42 PM. Reason: anonymity
    • sponge12345
    • By sponge12345 8th Jan 18, 12:20 AM
    • 5 Posts
    • 0 Thanks
    sponge12345
    thanks again for the replies.
    People have mentioned the 'Without Prejudice', I'd never heard this before but its seems an important detail when trying to negotiate.
    I will keep this thread updated.
    Last edited by sponge12345; 08-01-2018 at 12:26 AM. Reason: add
    • Tom99
    • By Tom99 8th Jan 18, 8:00 AM
    • 2,220 Posts
    • 1,506 Thanks
    Tom99
    thanks again for the replies.
    People have mentioned the 'Without Prejudice', I'd never heard this before but its seems an important detail when trying to negotiate.
    I will keep this thread updated.
    Originally posted by sponge12345
    Without Prejudice” means the other side cannot refer to your increased offer at tribunal.

    Without Prejudice Save as to Cost” mean you can refer to your offer to settle after the premium has been decided, if you think the tribunal would award costs because of the landlords unreasonable behaviour.
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