As a residential property specialist, I have become increasingly concerned at the charges made by management companies and freeholders when buying or selling leasehold properties.
In some cases, these organisations are receiving more fees for supplying information than solicitors do for completing all the legal work.
In a current transaction, a charge is being requested by a landlord’s solicitor in the sum of £175 plus VAT for printing out a standard form Deed of Covenant in which our client’s name will be added. In addition, notice fees of £100 plus VAT are also being levied. No doubt the freeholder will also have raised an invoice of the seller for replying to management enquiries.
In many cases, even though a substantial payment is made, the management company does not or is unable to provide copies of three years’ accounts, even though the CML handbook requires that these are obtained.
On another transaction, where our client was selling a property, the freeholder charged £145 and the management company £250 plus VAT for supplying standard documents. In addition, they sought to charge £35 plus VAT for the insurance policy and required the client to make the payment directly to them by switch, or they would delay supplying information for 10-14 days to allow any cheque to clear.
This company then charged the buyer: a deed of covenant fee; notice fees for both the transfer and mortgage; a fee for issuing a new share certificate; and a fee for issuing a certificate regarding a restriction on the title due to the Deed of Covenant.
These management companies and landlords have our clients over a barrel. It seems grossly unfair that they are entitled to make a profit out of supplying information which, in many cases, is in the form of a standard seller’s pack, for printing off a standard form document, or for simply signing their name and returning a form.
Clearly, it is reasonable for fees to be levied. However, over the last year these have increased significantly.
When conveyancing costs are being increasingly squeezed, and clients are often in a weak financial position, it seems wrong that these costs are allowed to spiral.
Margaret Watson, Hoben Johnson, Wellingborough, Northants
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