Transcript
So, you'd like to know about the formal route versus the informal route? Well, you can proceed informally which does reduce the involvement of the lawyers and surveyors, or you can proceed along the formal route, which essentially forces the freeholder to give you a lease extension. If you do not qualify for a lease extension, you would need to proceed along the informal route.
The formal route however fixes the date the premium is calculated from. The date the notice is served is the data value, so increased house prices or the lease getting shorter from the date onwards does not impact on the premium that you pay. We try to negotiate all cases informally from the start, but if you have a particularly awkward freeholder we may advise you to just serve notice and try and catch them off guard. If you're working to tight deadlines or your lease is particularly short or perhaps you're in an area experiencing increasing property values, we would always recommend serving the formal notice to protect your position. You will need a valuation before your solicitor can serve the formal notice, once served the freeholder must serve a counter notice with a premium they are prepared to accept within two months. If they do not meet the deadline then they have accepted your offer, if they dispute your offer, they have two months to negotiate with your surveyor, before you can make a formal application to the first-tier tribunal (FFT) to have your case heard.
The FTT as it's called will require your surveyor and freeholder surveyor to meet to narrow the issues before any hearing. To take the case into the FTT, it will cost you a lot in fees as there are expert statements surveyors barristers and lawyers often require to attend on your behalf and on the freeholders behalf. Don't worry though, we've only needed to go to the tribunal twice, as we're good negotiators, and we keep an eye on the total cost not just the premium you're being offered. The solicitors role is to serve the legal documents, create the data variations, register the new agreement at Land Registry, and transfer the funds, we as valuers do not get involved in this area, and your solicitor should not negotiate your lease extension. You need both professionals working together to protect your investment
