Leasehold Sale Fees

[Richlist]

Just thought I'd share a somewhat unpleasant experience with others.

I'm in the process of selling a leasehold property, this is my 4th sale in just over 2 years.

As part of the conveyancing process my solicitor is required to obtain sale packs relating to the ground rents and another relating to the service charge accounts from the freeholders/ managing agents which then have to be forwarded onto the buyers solicitor.

For me, these fees, which are in addition to normal conveyancing charges, have risen from an eye watering £359 two years ago to a whopping £464 today.

There is no escaping these fees and because the money has to be paid up front there is little incentive for organisations to provide them quickly. It's a case of pay the fees and wait for the packs to eventually arrive.

Beware......some freeholders are obviously worse than others.

The only good news is that the fees are tax deductible but it doesn't make it any less painfull.

.

[Grampa]

That is a outrageous amount to be charged for a leaseholder questionnaire pack.

Having done these myself they are a income stream and we charge £120 which I thought was the going rate in my area. How it works is the solicitor sends out a 2-4ish page template with a number of questions and requesting copies of insurance, service charge demand, accounts, section 20 notices etc.

We keep copies of previous ones sent out for a block so a lot of the info is just copied into the blank questionnaire provided but I cant see it taking longer than a couple of hours max, to collate all the info and send it out.

I believe there is no legal requirement for a freeholder to give out this info so the leaseholder and purchaser are held over a barrel.

If it has come from a managing agent and you wanted to pursue it, you could ask them to justify the price charged, how long it took to complete the document, their hourly rate they charge, request a copy of their complaints procedure, and ask for details of the redress scheme they are members of and registered bodies such as ARMA.http://arma.org.uk/

 

[Richlist]

In my use of the term 'managing agent's ' I'm not referring to lettings agents or estate agents but the freeholders agents who manage the service charge account.  

I believe the pack that they usually supply includes all the items that you mention and probably a few more together with their last 3 years of  audited accounts which include where the money has been spent, the levels of any reserve/sinking funds, planned expenditure, scheduled works etc.

The agents, First Port charge £324 for service charge pack and

Estates & Management charge £140 for the ground rents pack.

Total £464

[Carryon Regardless]

What's the company RL? It is likely more of us will have them as freeholders.

[Grampa]

I realise you are talking about freeholders MA. I was replying with my freeholders MA hat on as we do a bit of that as well as a sideline.

I have had dealings with Estates and Management previously and their reputation is terrible. You only need to google them. They also charge huge fees to leaseholders for permissions to let their flats.

With my letting agent hat on I advised one of my landlords (a friend) to just ignore the demands (about 300 quid) and wait until the Letter before action turned up which never did and I was sure wouldn't. This was because I knew there had been a ruling at a tribunal stating was a reasonable fee was and it was a lot lot lower than what they were demanding  

[Richlist]

I didn't realise you were a freeholder MA as well. Congrats. Always good to have a few other side lines and that fits very well with your 'day job'.

I've always found E &M ok actually.

They are owned, I believe, by the famous Iranian millionaire Tchenguiz brothers ( Robert & Vincent). I know there are lots of stories from unhappy people about the company but I find that they are a company that does exactly what it says on the tin.

I've always found that they do what they need to. They are in business to make a profit, they are easy to get hold of, respond to requests and generally up to now I have no complaints.

They do charge for permission to let. It's not exorbitant, although it's about 3 years since I required permission and fees may have risen. 

It's bad business to buy leasehold without finding out if permission is required, how much and the t & c's attached to that permission. Anyone getting a surprise probably deserves it cos it's part of the buying process to find out along with any of the other leasehold requirements.

I have no problem with paying e & m for their sales pack.....most people would expect a charge.........its just the hike in prices from £99 two years ago to the £140 now. Perhaps legislation has changed requiring more  or more detailed information, I don't know. Perhaps their costs have risen (wages, pensions, it, admin etc) who knows?

One of my local solicitors has hiked their conveyancing costs from £495 to £695 which is about the same percentage increase.

Anyway, paid it today, making loads of profit on the sale price, ordered a new car.....happy days.

[Mortitia]

This is one of the reasons I only buy leasehold props 'with share of freehold' and try to end up managing the company myself.

I am just about to sting an incomer for £7K for  a Deed of Variation to a lease to legally enable them to rent out - only on an AST you understand. (It's in London.)

The 'freeholders' need some exterior works doing and this will finance it well enough.  The incomer is trying to press it to be done before 1st April to avoid new stamp duty on BTL - I may need a bonus!