Whilst it is always our ambition to value, negotiate and settle a lease extension premium with minimum fuss, there are occasions when the actions of the other side, which in this case were the Landlord or his surveyor, result in an application being made by the Tenant to the LVT, in a protective action.
Under the legislation, a Tenant must apply within strict time limits, failing which the claim for a new lease is deemed withdrawn, and the Tenant needs to wait a further year before re-applying. At that point, the lease is shorter, the premium will be higher and the cost of a second set of fees is incurred.
In this case, despite continued attempts by us to engage the Landlord’s valuer, for whatever reason we were unable to do so until an LVT hearing date had been set. Once we were able to have meaningful discourse we agreed the premium within 4% of our target valuation.
It is unfortunate when extra costs of an LVT application need to be incurred as they are no more than wasted costs. The problem is that some Landlords adopt a certain style, which means they are costs that cannot be avoided.
Nonetheless, the outcome was favourable and the Tenant had the benefit of not paying the premium itself for in excess of one year from the valuation date. Another benefit the Tenant had from instructing us was that our negotiation fee was capped and agreed in advance, so even though the delayed dealings involved us in much extra work, additional fees were not incurred by our client for our services.