How do we control the costs?

* Stamp Duty Land Tax – your surveyor, solicitor or company accountant will be able to offer advice on whether or not (and how much) tax is likely to be payable, on a case-by-case basis. This is a good example of how money spent on good expert advice early will give all participants a better idea of the expected costs and benefits.

* Freeholders costs – you must be aware that you are responsible to bear the freeholders (reasonable) costs (solicitors and surveyors fees, mostly) even if you do not complete the freehold purchase. The legislation also identifies the costs of an intermediate landlord as qualifying. Admissible costs include statutory procedure, dealing with the notice(s) and surveyors handling fees.

* Solicitors fees – Solicitors fees may seem high in isolation, but in larger blocks the economies of scale enjoyed can heavily diminish the cost attributed to each flat. Many reputable solicitors will charge on a fixed-fee structure up until the point of representations at the LVT, at which point an hourly fee to represent the case at court is applied. Be sure to understand the fee structure from the outset and although most enfranchisement claims are settled without the need for the case being heard by the tribunal, this eventuality should be planned for from the outset.

* Surveyors fees – You will of course have selected a surveyor who has good local knowledge and who has had identifiable success on similar enfranchisement claims in the recent past. They may also have worked for a freeholder, and so be able to apply this expertise and experience for a group of lessees. But how much should you pay? Surveyors will have a range of fees for the varied work they carry out, from an initial consultation fee through to fees to present their findings at a tribunal, as expert witness. The benefits of being represented by an experienced enfranchisement surveyor are generally demonstrated on by how much of a saving can be made from the freeholders’ surveyor’s valuation. In Central London this valuation and negotiation expertise can save a great deal. The lowest fees, therefore, aren’t necessarily the best option. There may be costs incurred in tracing a freeholder, bringing new witnesses to tribunal (building surveyors, by way of example) closing down the nominee purchaser company and setting up a new controlling company.

With all of this you might be thinking
“is it really worth it?” Yes, in most cases the benefits do outweigh the costs. Lastly, who, in your building is best
qualified to keep control of the costs?