LEASEHOLD ENFRANCHISEMENT
Our service
Our Leasehold Enfranchisement Team can help both Landlords and Tenants in connection with the extension of leases of flats and houses and the acquisition of the freehold of blocks of flats and houses. We also act in connection with claims to exercise the Right to Manage blocks of flats.
All work is supervised by a senior lawyer, who may be a Partner, a Legal Director, or a Senior Associate. At the beginning of your matter, we will tell you who will be working for you and who to contact should you have any concerns with our service. We will also explain the scope of our services. We deal with freehold and leasehold residential property.
What is included
Whether you are extending your lease, acquiring your freehold title, acquiring the Right to Manage or responding to those claims under the Leasehold Reform Housing and Urban Development Act 1993 and/or the Commonhold and Leasehold Reform Act 2002, the main elements of the work we undertake are the same. We set these out below and indicate further below the elements of our service that apply to leasehold enfranchisement claims.
Acting for Landlords
The key stages of acting for you as a landlord include:
Taking your instructions and giving you initial advice concerning the statutory procedure.
Reviewing the legal title of the property.
Instructing other professionals including valuers on your behalf.
Preparation and service of relevant Counter-Notices.
Negotiating/drafting and advising on any agreed documentation.
Making applications to the Property Chamber.
Dealing with all aspects of applications to the Property Chamber, including compliance with directions and preparation for the hearing.
Dealing with completion/handover.
Liaising with client/valuers and other professionals throughout.
What is excluded
The fees set out below would not include any further work, such as
Valuation advice.
Financing advice.
Tax planning and calculation (including SDLT).
Arranging buildings and/or contents insurance and any other management issues.
In leasehold enfranchisement claims, tenants are normally responsible under statutory provisions for a certain part of the landlord’s fees for investigating any claim and any conveyancing costs. We endeavour, and are successful in most claims, to recover all statutory costs where a tenant is responsible for those fees. A landlord is liable to pay for any costs incurred in proceeding to a hearing before the Property Chamber.
Acting for Tenants
What is included
The key stages of acting for you as a Tenant include:
Taking your instructions and giving you initial advice concerning the statutory procedure.
Reviewing the legal title of the property.
Instructing other professionals including valuers on your behalf.
Preparation and service of relevant Notices.
Negotiating/drafting and advising on any agreed documentation.
Making applications to the Property Chamber.
Dealing with all aspects of applications to the Property Chamber, including compliance with directions and preparation for the hearing.
Dealing with completion/handover.
Liaising with client/valuers and other professionals throughout.
What is excluded
The fees set out below would not include any further work, such as:
Valuation advice.
Financing advice.
Tax planning and calculation (including SDLT).
Arranging buildings and/or contents insurance and any other management issues.
What we charge
Our Partners, Legal Directors, Senior Associates and Associates charge hourly rates from £375 to £725. Our Trainee Solicitors, Paralegals and Legal Assistants charge hourly rates from £250 to £375.
All rates depend on the seniority of the individual and the practice area.
We offer a bespoke service and each matter is unique. We can only estimate the likely costs of our services once we have discussed the matter with you and seen the papers. However, we can provide an indication of our likely fees associated with the work of varying complexity as set out above under the heading “What is included”.
Low complexity – from £3,500 to £5,000.
Mid complexity – from £5,000 to £10,000.
High complexity (usually involving the acquisition of freeholds) – in excess of £10,000 (certain high-value or highly complex transactions could cost up to or in excess of £30,000).
The following factors (and possibly others) will increase the complexity of the matter:
Where we act for Landlords
Issues concerning validity and/or entitlement.
The complexity of the title (e.g. composite titles, separate titles and unregistered titles).
Whether the work involves extending leases , acquiring freehold titles or acquiring the Right to Manage.
Where the work relates to a claim to acquire the freehold:
(i) The number of flats in the block; and
(ii) Complex valuation issues such as development value.
Where we act for Tenants
Issues concerning validity and/or entitlement.
Issues or difficulty in locating the landlord.
The complexity of the title (e.g. composite titles, separate titles and unregistered titles).
Whether the work involves extending leases , acquiring freehold titles or acquiring the Right to Manage.
Where the work is the claim to acquire the freehold :
(i) The number of tenants participating in the claim;
(ii) The way in which tenants wish to purchase the property (participation agreements); and
(iii) Complex valuation issues such as development value.
Additional Amounts Payable/Disbursements
In addition to our fees, landlords and tenants will need to budget for the following (where appropriate):
SDLT (see below).
HM Land Registry Search fees (average £6 per title).
HM Land Registry Registration fees £40 – £1,105 depending on value (per registration).
Electronic money transfer fees which are generally £30 for each transfer.
Instructing a valuer/other expert as appropriate (generally from £1,250 to £3,000 together with a negotiation fee to be agreed with the valuer).
Instructing a barrister to advise and/or act in respect to the claim and any Property Chamber application/hearing (generally £6,000 - £15,000 – depending on complexity).
We incur these and other necessary additional third-party costs (“disbursements”) on your behalf. We would usually discuss disbursements with you in advance and incur them on your behalf when appropriate. You are responsible for all disbursements; we add them to your bill without mark-up. You don’t need to pay these third parties directly, though. You simply pay our bill and we will pass on the relevant sum on your behalf to the relevant third party in settlement of their fees.
This list is not exhaustive and other disbursements may apply depending on the property.
Stamp Duty Land Tax
Unless relevant reliefs apply and dependent on the purchase price of the property, purchasers must pay Stamp Duty Land Tax on any acquisition. You can estimate the amount of Stamp Duty Land Tax you will need to pay by using HMRC’s website or if the property is located in Wales, by using the Welsh Revenue Authority’s website. This calculator does not cater for all types of acquisitions. Additionally, landlords may be liable for capital gains tax. We recommend seeking advice about SDLT rates and VAT.
VAT almost always applies to UK property transactions, even when you are based overseas. Where VAT applies, then we add this to our charges at the prevailing rate. The figures quoted above all exclude VAT at 20%. Most disbursements attract VAT at the prevailing rate. This will be added to the bills we receive. We pass the total cost on to you. We do not add VAT on to disbursements where VAT has already been added by the relevant third party. Certain disbursements, such as HM Land Registry registration fees, are not subject to VAT. Where our services are not a vatable supply, then we do not charge VAT and the quote above is reduced by 20%.
How long it will take
It is impossible to say how long a transaction may take but typically to extend a lease or acquire a freehold in a low-complexity matter usually takes between eight and twelve months from receipt of instructions from you. Typically, the exercise of the Right to Manage will take between four to eight months.
We will be able to give you a more accurate estimate when we know the nature of the transaction you wish to undertake.
There is no upper limit as to how long matters might take as they can generally only complete once the landlord and tenant have agreed the terms of acquisition or the statutory provisions/timetable have been complied with.