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How Much Would You Expect to Pay for a One Page Document?

By Peter Pownall

If you own a residential leasehold property and come to sell it you may have to obtain the consent of the freeholder.

This requirement will usually be contained in the lease and may state either you need to obtain the landlord’s consent or a licence to transfer the ownership. Some leases also have this requirement should you wish to underlet the property or charge it to use it as security for borrowing money against the property.In respect of a leasehold house the consent or licence commonly takes the form of a one page letter or one page document.
In a recent application to a freeholder which happened to be a local authority we were advised that to obtain the consent the freeholder would require a payment of 4% for the freeholder’s surveyor’s fees and 5% for legal costs.

The property in question was an ordinary terraced house being sold for £165000. The lease was for a term of 999 years and the ground rent was one peppercorn – in effect nothing.

Working on the freeholder’s requirements this would have meant our client would have had to pay £14850. When we pointed out that this was totally unacceptable and unreasonable we were advised this was the freeholder’s standard fee. When we pressed them further the freeholder advised their requirements were incorrect and they would require a payment for £300 for the surveyor’s fee and £350 legal costs.

There is assistance on this point from a statute and court case. Under paragraph 1(1) of Schedule 11 of the Commonhold and Leasehold Reform Act 2002 this charge would be defined as an administration charge. Such charges need to be reasonable and proportionate to the set up of the Leasehold and will only be payable if of reasonable amount.

In the case of Holding and Management (Solitaire) Limited v Norton and Other Cases 2012 (UKUT 1(LC) George Bartlett QC. Judge Bartlett considered the fees in respect of Licences to Assign in sums of £135.00 and £105.00 which has been requested and he held them to be unreasonable and he substituted a sum of £40.00 on the cases.

This particular matter we have been dealing with has yet to be resolved but this is an example of the issues which can arise on the sale of a leasehold property and cause delays in the matter proceeding.