It’s too bad Justin Madders’ bill didn’t get a chance to be heard on Friday.
If passed it would have made any further Law Commission deliberation unnecessary. Its simplicity would put an end to the smoke and mirrors calculations currently used by surveyors to put a figure on the cost of a lease extension.
His bill proposes a simple transparent formula – 10 times the ground rent.
If passed, leaseholders would no longer need a surveyor to determine the price and haggle with the freeholder’s surveyor if needed. Currently the leaseholder’s bill for a lease extension through the Act includes their solicitor, their surveyor, as well as the freeholder’s solicitor and surveyor – making the best part of £2,000 before the actual premium to be paid.
It’s no wonder leaseholders can be tempted by ‘informal extensions’ offered on a take it or leave it basis with no fees. But always avoid these. If the freeholder decides to add a cheeky clause that increases the ground rent over time, you may find the property difficult to sell.
Unless the informal offer includes zero ground rent, avoid and go through the Act. It will almost always be cheaper in the long run.
But meanwhile ask your MP if they will support Madder’s bill when it comes back.