Written evidence submitted by the Conveyancing Association [LHR 693]
DATA EVIDENCING LEASE ADMINISTRATOR COSTS
The data below is taken directly from the case management records of one of the Conveyancing Association members and from our research with Lease Administrators as to the time involved in each activity.
Notice of Assignment
The process to receipt the notice of transfer is generally just to record the name of the new owner and check that there are no outstanding payments for rent and service charges. The process takes between 15 and 30 minutes.
We would estimate that a reasonable fee for this administrative task would be no more than £25 and yet of 4,260 records only 259 were £25 or under.
Notice of Charge
The notice of charge is an additional notice required if the incoming leaseholder has taken a mortgage and simply confirms the name of the mortgagee. The work involved in recording the lender’s name and receipting and returning the notice should be no more than 15 minutes.
Of the 2,997 recorded only 190 were under £25.
Deed of Covenant
A Deed of Covenant has been a void document since the Landlord and Tenant (Covenants) Act 1995. However, there is some concern that the definitions within the act mean that a Management Company might not be able to rely on the act to enforce covenants and therefore they will routinely insist upon a Deed of Covenant.
A First Tier Tribunal case decision in 2014 was that a reasonable fee for a Deed of Covenant (in relation to sub-letting) was £80.
Of the 1,300 recorded only 205 were £80 or less.
Certificate of Compliance
Restrictions are registered at HM Land Registry requiring that the terms of the lease be satisfied prior to the registration of the incoming leaseholder’s title at HM Land Registry. The requirements will usually be for notice of assignment and charge be served and a Deed of Covenant entered into and paid for and a certificate provided by the Landlord to confirm that these terms have been complied with.
It is possible for the wording of the restriction to be that the leaseholder’s conveyancer can confirm satisfaction of the lease terms so that there is no need for a certificate to be issued at additional charge.
It should also be noted that this is the protection of a contractual term and not an interest in land which creates an additional burden for registered property (it is not possibly to create such a restriction in unregistered land), so arguably frustrates the Land Registration Act 1925 which sets out to register estates and interests and simplify title.
HM Land Registry advise us that these restrictions result in a disproportionate number of application enquiries and cancellation of applications for registration – with around 200 cancellations due to leasehold restrictions every week according to HM Land Registry data in 2017.
Our survey of lease administrators in 2016 indicated that the time taken for them to complete the work to issue the certificate was no more than 30 minutes and the modal response was 10-20 minutes.
Only 81 out of 734 were £50 or less.
Leasehold Sales Information Fees
Depending upon the complexity of the leasehold arrangement lease administrators advise that it takes between 30 and 180 minutes to complete the leasehold information depending upon the complexity of the estate with the mode being between 60 and 120 minutes. The costs therefore should be somewhere between £150 and £300 and MHCLG consultation closed on this on 26th November 2018.
There are often duplicated costs where the Freeholder charges for the ground rent information and the Management Company charges for the service charges and buildings insurance information.
Timescales
Over the 2,063 transactions recorded 1,042 took longer than 30 days from receipt of the payment for the leasehold sales information to be provided and only 15% were provided within 10 days.