Leasehold Advice – Getting Rid of the Cowboy Advisors in the World of Leasehold Advice
If you own a flat and want to extend your lease or buy the freehold, your first point of call is probably to go and look it up on Google. If you do, you will find lots of solicitors, surveyors and specialist enfranchisement companies that can handle part of the process (or in a few cases, the whole process) and will be anxious to help. But how do you know if these firms have the necessary skills or track record asks David Lawrenson. Where can you get good advice on leasehold?
If you own a flat and want to extend your lease or buy the freehold, your first point of call is probably to go and look it up on Google.
If you do, you will find lots of solicitors, surveyors, valuers and specialist enfranchisement companies that can handle part of the process (or in a few cases, the whole process) and will be anxious to help. But how do you know if these firms have the necessary skills or track record asks David Lawrenson.
Sadly, in the information vacuum that exists today, the business of enfranchising or extending a lease has quite a few rogues. For example, one company will tell you for £75 if the block is available for enfranchisement -something you can find out for free by doing a bit of research.
Legislation in the last 25 years has given householders with leases the chance to address some of the weaknesses of leasehold, often referred to as ‘enfranchisement’.
But the lack of knowledge of the process has left a lot of people disappointed and out of pocket as a result of the service they are getting.
And whilst there is a wide range of information and sources of advice to leaseholders from various parties operating in the enfranchisement sector such as government bodies, firms of solicitors, valuers, managing agents, intermediaries/agents and managers of leasehold enfranchisement not all the advice is good.
Historically, people have had no reassurance of the professionalism and standards of those involved in helping them extend the lease on their flat or acquire a share of the freehold of their block.
Leasehold Advice Trade Body
Luckily, there is a trade body called ALEP (the Association of Leasehold Enfranchisement Practioners), which was set up to bring together a powerful group of solicitors, surveyors and intermediaries to impose some discipline on the industry.
The members come from the three principal groups involved. These are:
- Solicitors – that handle conveyancing and contractual matters
- Surveyors – that focus on valuations and negotiations
- Intermediaries – that dispense advice manage projects and bring together the diverse parties and interests with regard to the enfranchisement of leasehold properties.
New members have to undergo vetting and checks to ensure they have a good reputation, can prove professional standards, have the right level of professional insurance, specific experience in managing leasehold enfranchisement and agree to sign up to a set of standards and principles. ALEP has a strict code of conduct and disciplinary procedure includes removal of any member who is not up to scratch.
ALEP is a not-for-profit organisation with a managing committee drawn from the major disciplines involved in leasehold activities and with representation from the government backed Leasehold Advisory Service.
Alex Greenslade, a director and founder member Leasehold Solutions says, ”Our industry has a lot of cowboys who are giving us a bad name. ALEP improves service levels.”
Leasehold Advice – First Steps
So if you want to extend your lease, enfranchise or sort out a problem with a block you own, what should you do.
Well, the first point of call for information should still be the Leasehold Advisory Service. It’s free and has lots of information. (For web address -see below.)
I can also heartily recommend you read the Flat Owners Guide by Paul Walentowicz and published by Shelter – a superbly detailed guide to everything you could possibly want to know about managing agents, freeholders duties, extending leases, commonhold companies, the right to buy your share of freehold, exercising the right to manage and how to out inefficient or greedy freeholders.
Both sources will give you useful background knowledge.
However, you will probably find the array of possible options is bewildering and this is where ALEP comes in because the hope is that their members will be scrupulously objective in helping homeowners to decide for themselves which is the best route to go down. (Unfortunately, it seem that some players in the market sway customers towards one option or another depending on their own interests and preferences.)
Once you are through the maze of choosing which option is best it’s all too easy to mess up the actual work if you don’t know what you are doing or you employ an “expert” who is not fully up to speed with legislation.
Non-specialist solicitors can easily muck up a project causing long delays and adding huge extra costs for the owners.
Leasehold Advice – A Quick History of Recent Leasehold Law
“Sportelli”: A major factor in the pricing of a lease extension or freehold acquisition is called the deferment rate. In September 2006 a case held in the Lands Tribunal between the Earl of Cadogan Estates and Sportelli determined that the rate should be 5% for flats nationally and 4.75% for houses. This made a very significant difference to the price of some transactions, in some cases doubling the cost.
Government: Labour and Tory have put more power in the hands of leaseholders but a lack of consultation and poor implementation has created a new set of problems and red tape.
Commonhold: this concept was created in the hope of replacing leasehold
However, take up has been low due to
- New-build developments persist with leasehold ownership because it adds an additional revenue stream for developers.
- Conversion of existing blocks to commonhold is almost impossible because it requires 100% consent by the flat owners.
Other countries: the problems associated with freehold are addressed satisfactorily by systems such as strata companies in Australia and condominium ownership in the USA.
Sources and Contacts:
The Leasehold Advisory Service: www.lease-advice.org
Government publications: www.opsi.gov.uk
Campaign for the Abolition of Residential Leasehold: www.carl.org.uk
Royal Institution of Chartered Surveyors: www.rics.org
David Lawrenson: www.lettingfocus.com
Law Society: www.lawsociety.org.uk
Leasehold Solutions: www.leaseholdsolutions.com
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