Buying or selling a flat costs more than the headline price suggests, and almost none of it is your solicitor's fee. Here is where the money actually goes, and why every leasehold client needs this explained before exchange, not after.

Every conveyancer has had this conversation. A client is days from exchange, the figures are tight, and then a bill lands that nobody mentioned at the start: a management pack fee, a notice of transfer charge, a deed of covenant fee. None of it is your firm's fee. All of it is real money the client did not budget for.

This is one of the least understood parts of buying or selling a leasehold property, and it is exactly the kind of practical knowledge that separates a genuinely useful conveyancing solicitor from one who simply processes the file.

The single largest leasehold-specific cost is the management information pack, sometimes called an LPE1. This is a set of documents produced by the freeholder or managing agent, covering service charges, ground rent, building insurance, ongoing disputes, and any major works planned or already underway.

It typically costs between £200 and £500 plus VAT, though managing agents on larger developments, particularly in London, can charge £600 to £800 or more. There is currently no statutory cap on this fee. Agents set their own price and are not required to justify it unless a leaseholder challenges the charge at tribunal, which rarely happens given how time pressured a sale usually is.

By convention, the seller pays for this pack, since it is treated as part of proving the property is actually sellable. It is also almost always non-refundable, even if the sale later falls through, which is worth explaining to a seller client early rather than after a collapsed chain.

Once completion happens, the freeholder needs to be told that the lease has changed hands. This is done through a notice of transfer, and most leases require it to be served within a set period, commonly 28 days.

This fee usually runs between £100 and £250 plus VAT. If the buyer is purchasing with a mortgage, a second, separate notice is required to tell the freeholder about the lender's charge over the property, and that carries its own fee, typically in the same range. Buyers should budget for both fees together if they are borrowing to buy, since it is easy to only account for one.

A deed of covenant is a formal document, usually required by the freeholder, in which the incoming buyer promises to comply with the terms of the lease. It is a common source of client confusion, since it can feel like an unnecessary extra step when the lease terms are already binding regardless.

This typically adds a further £50 to £150 to the buyer's bill, though it can run higher depending on the freeholder's solicitors and how the deed needs to be executed.

None of these fees are large individually. Together, they are not small either. Across a typical leasehold purchase, these disbursements commonly add somewhere in the region of £150 to £300 on top of standard freehold costs, and across a leasehold sale, once the management pack is included, sellers can be looking at an additional £700 to £1,800 compared with selling a freehold property of the same value.

For a client already stretching to afford a deposit, that is not a rounding error.

Given how much borrowing capacity has shrunk with mortgage rates where they are, more buyers are being pushed towards leasehold, shared ownership and other alternatives to freehold ownership simply because freehold properties are out of reach. That means more clients than ever are encountering these fees for the first time, often without understanding why buying a flat costs meaningfully more in disbursements than buying a house.

This is exactly the kind of detail that should be flagged at the very start of a retainer, not discovered halfway through. A client who understands from day one that a management pack fee is coming, and roughly what it will cost, is a client who does not panic when the invoice lands. A client who finds out three weeks before exchange is a client who starts questioning everything else about the transaction, often at the worst possible moment for the chain.

There is potential relief on the horizon, though it has not arrived yet. The Leasehold and Freehold Reform Act 2024 gives the Secretary of State power to make regulations capping or otherwise regulating exactly these charges, including management pack fees, deeds of covenant and notices of assignment. As things stand, the relevant secondary legislation has not been laid before Parliament, and no caps are currently in force.

Worth watching, not worth promising to a client. Until any regulations actually land, budget for these fees at current market rates rather than assuming reform will arrive in time to help a transaction you are working on now.

These fees are not hidden by anyone acting in bad faith. They are simply easy to overlook because they come from the freeholder rather than the solicitor, and clients naturally assume their conveyancing bill is the whole story. Flagging the management pack, the notice fees and the deed of covenant charge at the outset, with a realistic figure rather than a vague warning, is a small thing that makes a genuine difference to how smoothly a leasehold transaction runs, and to how much a client trusts the person handling it.Read More

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