Stock Page Stock - Surveying Department

Whether you are Buying, Building or Planning Alterations to a Residential or Commercial property or need advice on lease extensions or Right to Manage we can provide a wide range of services to assist you.

Valuations and Negotiations for Lease Extensions and Purchase of Freehold Interest (Collective Enfranchisement)

Legal Background:
There are two rights for long leaseholders both of which are contained within Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 as amended by the Housing Act 1996 and the Commonhold & Leasehold Reform Act 2002.

The first right is a group right for leaseholders of flats to purchase the freehold interest of the building in which they reside subject to certain qualifications. The second right, is for the individual lessees to renew their lease which, in effect, adds 90 years to the unexpired term of the existing lease.

For the lease extension, the 2002 Act has abolished the previous residency test and the property now has to be owned by the qualifying tenants for a period of at least 2 years before a claim is made. It has also abolished the low ground rent test and also provides for the valuation date to be fixed at the date of the claim. There is no marriage value where the unexpired lease term exceeds 80 years. Otherwise, the marriage value is fixed at 50:50.

The calculation of the premium to be paid for lease extension is set out in Schedule 13 part II of the Leasehold Reform, Housing and Urban Development Act 1993 and is a total of:

a) The diminution in value of the landlord's interest in the flat,
b) The landlord's share of the marriage value and
c) Compensation for loss arising from the grant of the new lease.

The marriage value is the potential for increase in the value of the flat arising from the grant of a new lease and the 1993 Act requires that the "profit" should be shared between the parties.

Services Available:
We are able to provide clients with one or more of the following: the provision of a preliminary report, valuation and advice to enable the client or qualifying tenants to take a decision as to whether they are eligible, capable of, and wish to exercise their rights;

  •  the provision of valuation advice as to the amount(s) of any offer or counter-offer that should be included in any notice or counter-notice;

  • the undertaking of associated negotiations on behalf of the landlord, or on behalf of the participating tenants or nominee purchaser;

  • the preparation and provision of expert evidence to a Leasehold Valuation Tribunal (LVT) or the Lands Tribunal.

For general information, advice and background to the legislation involved please visit the Leasehold Advisory Service website.

Surveys & Valuations:

There are two main types of survey, a Homebuyer Survey and Valuation (HSV) and a Building Survey.

Mortgage valuations

A valuation isn’t a survey. It’s a limited check on the property that your mortgage lender carries out to ensure it’s worth the money they’re lending you. They’ll probably ask you to pay for the valuation. Many lenders provide a copy of the mortgage valuation to the buyer but it is unlikely to cover items of detail which would be picked up in a survey.

However, there may be structural problems in the property that would cost a huge amount to put right – and they won’t appear in the valuation report. Which is why it’s really important you have a survey. An RICS member is fully qualified to carry out a more detailed survey, before you buy your home.

Homebuyer Survey and Valuation Report

A Homebuyer Survey and Valuation (HSV), also known as a Homebuyer’s Report, is a survey done to a standard format set out by RICS – it’s most suitable for conventional properties built within the last 150 years, which are in reasonable condition.

It doesn’t detail every aspect of the property, and only focuses on urgent matters needing attention. It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations.

An HSV includes details of:

  • The general condition of the property

  • Any major faults in accessible parts of the building that may affect the value

  • Any urgent problems that need inspecting by a specialist before you sign a contract

  • Results of tests for damp in the walls

  • Damage to timbers – including woodworm or rot

  • The condition of any damp-proofing, insulation and drainage (though drains aren’t tested)

  • The estimated cost of rebuilding the property after a fire, for building insurance purposes

  • The value of the property on the open market.

Building Survey

A Building Survey is a comprehensive inspection of a property. It’s suitable for all properties, especially:

  • Listed buildings

  • Older properties,

  • Buildings constructed in an unusual way, however old they are

  • Properties you plan to renovate or alter in any way

  • Properties that have had extensive alterations.

It examines all accessible parts of the property – and you can ask to have specific areas included, so it covers any particular concerns you have about the building.

A Building Survey includes details of:

  • Major and minor defects and what they could mean

  • The possible cost of repairs

  • Results of damp testing on walls

  • Damage to timbers – including woodworm and rot

  • The condition of damp-proofing, insulation and drainage (though drains aren’t tested)

  • Technical information on the construction of the property and the materials used

  • The location

  • Recommendations for any further special inspections.

Building Survey doesn’t include a valuation, but your surveyor can provide this separately if you need one.

Having an independent and comprehensive survey by an RICS member makes good sense – and could save you thousands of pounds in repair bills.

 
 
Stock Page Stock - Chartered Surveyors, Property Management, Valuers & Letting Agents
83 Goswell Road, London, EC1V 7ER. Tel: 020 7251 4171

home | about us | history | chartered surveying | management | block management

right to manage | residential flats to rent | offices to rent | contact us