Ground Rent Administration Fees

[GGT1965]

Hi, I'm a new user so hope I've started this thread in the right place !!

I am planning on having an extension built on to my property and the plans have been passed by Stockport council.

I emailed the Ground Rent company and informed them of the intention to extend. They replied to my email and asked me to forward copies of the plans which I did.

There was no mention of "Admin Fees" in the email.

Today I have received a letter from them stating "We wish to confirm that the fee in connection with considering the possibility of granting the consent is £600.00"

This will take 10 working days and if I want to expedite sooner then a further £144.00 is required.

How can they justify that kind of fee ? Their statement only says this is for "considering the possibility of granting consent" so they could just say No !

 

Help !!

Thanks

[raydetinu]

Is your house leasehold then, or freehold with a ground rent?

Either way how much ground rent do you pay? you can buy it outright at a fixed rate.

If its a freehold property wth a ( pension type ) ground rent then they have no say on what you do with the buildimg anyway.

[GGT1965]

My house is leasehold and the ground rent is £40.00 a year. They charge yet another admin fee of £48.00 for a Freehold quote.

[raydetinu]

You may be able to work it out from this:

http://www.lease-advice.org/publications/documents/document.asp?item=15

[GGT1965]

Thanks, I'll give it a try

[GGT1965]

After putting it all on hold I have now got the quotation of what it will cost to purchase the freehold on my property. It's £2250.00 plus a contribution to the freeholder's costs of £576.00.

How do I know if this is the correct sum ?

It's a 999 year lease and the property was built in 1984 so there's 969 years left on it and the Ground Rent is £40.00 per year.

I did have a look at trying to work it out but the calculations always refer to "the tables" and I cannot get access to these tables anywhere. They are called Parry's Valuation and Investment Tables.

 

Any advice or suggestions welcome !

The quotation is only valid for 8 weeks so I need to get some advice as soon as possible !!

 

Thanks in Advance

[raydetinu]

try a specialist solicitor, or drop Andydd a PM on here.

[GGT1965]

Thanks for the info, I've dropped Andydd a PM as you suggested

[andydd]

Hiya. Dont think I got a PM.

 

Its prob a bit confusing to mention 'ground rent' at its irrelevant and so is how much you pay.

 

Extra admin cahrges are only payable under the lease but remember the properrty does actually belong to the freeholder, you technically just rent it so its upto the FH to klook at your plans for extension and check them professionally to make sure they are all good and wont damage the buidling, he clearly can charge for this.

 

If you wish to dispute the amount, you can apply to the FTT (First Tier Tribunal), previously LVT, they have the power to determine if admin fees are reasonable or not, for example in my cvase they decided a simple letter for late payment should cost £25 and not £130.

 

See here for info on how to apply > http://www.justice.gov.uk/tribunals/residential-property

 

And LEASE is good for advice > http://www.lease-advice.org/

[GGT1965]

Thanks for the info.

 

I sent them an email and asked how they had come to the figure of £2250 to purchase the freehold as I had been told by neighbours they had paid significantly less and had also used an online calculator which had given me a ballpark figure which was again significantly less.

They have replied and reduced the amount by £150 but i am still going to offer a lower amount and see what they come back with.

 

Thanks for the reply

[andydd]

Purchasing the freehold is a different matter, is that what u want to do ?

[GGT1965]

Yes. A couple of years ago I sent them the plans for the extension that had already been approved by the council and the wanted the £600 admin fee to "peruse" them.

I put all the extension plans on hold and then last week I requested a quotation to by the freehold.

They then came back with the figure of £2250 plus legal costs but my neighbour purchased hers a couple of years ago for around £1000 including legal costs.

 

I think I'm on their radar from the initial plans query a couple of years ago, as they know I want to extend the property, so they're coming back with an inflated price to purchase the freehold.

[andydd]

Freehold prices are worked out using complex formulas, such as time left x ground rent, so it could be 100 years x £100, but then £100 wont be worth £100 in 100 years so there are other calculations, they can be very expenisve though, sometimes tens or hundreds of thousands of pounds.

 

If its informal offer, they can charge what they like, they dont have to sell unless you force them using RTE - Right To Enfranchise and then you can ask FTT/LVT to determine price.