Valuation & Negotiation
Our expert team carry out both desktop and physical valuations dependant on the clients criteria, the nature of the instruction and the required timeframe.
Our reports are succinct, clear and manage all your financial expectations of the potential lease extension premium.
We provide 4 figures: Best case | Realistic | Worst Case | Opening offer
These figures stem from our experience of over 4000 successful cases and an archive of precedent regional and Upper Tribunal decisions.
We understand the importance of an accurate valuation, whether you are re-mortgaging, selling or purchasing a short lease flat, our report will act as the perfect guide to assist you with your lease extension process.
Our team can then negotiate the best possible deal with fixed fees so our clients know exactly where they stand.
Section 5 Notices (The Tenants Right of First Refusal)
If the owner of your building is selling the freehold interest in the building, they are generally required to offer the freehold interest jointly to the owners of the flats within the building before they can sell it to a third party. This also applies if your landlord is selling their intermediate leasehold interest in the building.
The total cost of accepting the section 5 notice will be comprised of the following:-
- Your share of the price – this is the payment that will be made to the landlord as consideration for the transfer of the freehold interest as set out in the section 5 notice. Your instructed valuer will also be able to advise how the price should be fairly divided between the participating flat owners.
- Your share of the participating flat owners’ costs – this will include the cost of your solicitor and your valuer (if any), plus any disbursements, for example, Land Registry fees, bank charges, stamp duty (if any), etc.
- Your share of the landlord’s costs (if any) – the landlord may set out as a term of the section 5 offer that the flat owners will be responsible for its costs in connection with the sale of the freehold. If the flat owners choose to accept the notice then they will have to pay the landlord’s costs.
- Lease extension costs – if you acquire the freehold interest, following the acquisition, you will not have to pay an additional premium for extending your lease, but you will have to pay your own legal costs for drafting and finalising the lease extension. In addition, if you have a mortgage over your individual flat, then the lender may charge a small fee for providing their consent to the lease extension.
Accepting a Section 5 Notice
In order to validly accept the notice, more than 50% of the flat owners in the building must collectively and formally accept the section 5 notice by serving a section 6 acceptance notice. We would recommend that the flat owners that wish to accept the notice, jointly instruct a solicitor to act on behalf of the participating flat owners.
Collective Enfranchisement
Collective enfranchisement is a legal term for the right of leaseholders to jointly acquire the freehold of a building, or part of a building, in which they hold a residential leasehold interest. The legal language, and the legal process, can seem intimidating and complex. However, the basis of the rights available to leaseholders can be summarised fairly simply.
In essence, a group of leaseholders will have the right to acquire the freehold from their landlord where they satisfy the qualifying criteria and where the legal claim process is followed.
The right to collectively enfranchise applies where a self-contained building (or part of a building) contains at least two flats, the floor-space of the building does not comprise 25% or more non-residential space (such as shops or offices) and at least 2/3 of the flats are owned by qualifying tenants. To exercise collective enfranchisement rights at least half of the leaseholders are required to participate.
When exercising these rights, leaseholders should be aware that they will be responsible for both their own legal and surveyor’s costs as well as the reasonable legal and surveyor’s costs of the freeholder. Should the matter be referred to the tribunal, each party will be responsible for their own costs from that point.
Home Buyers Report
RICS Homebuyer Surveys are a mid-level survey popular with most people buying a conventional property in a reasonable condition. They are less detailed – and less expensive – than RICS Building Surveys but more comprehensive than RICS Condition Reports.
RICS Homebuyer Surveys, now officially called RICS Home Survey Level 2, are carried out by Chartered Surveyors. They won’t detail every single aspect of the property but they can uncover problems that may affect the property’s value and require further investigation like subsidence and damp. And they will include all major parts of the property visible to the surveyor.
The report you receive will give advice on any repairs and on the amount of ongoing maintenance required in the future. But these surveys are ‘non-intrusive’ so the surveyor will only check what’s easily visible. They won’t, for example, lift up carpets.
The RICS Home Survey Level 2 can be purchased with or without a valuation. If you choose to have a valuation your report will include a market value, an insurance reinstatement figure and a list of problems that the property surveyor considers may affect the value of the property.