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Questions and Answers: Alcester leasehold conveyancing

Estate agents have just been given the go-ahead to market my basement apartment in Alcester.Conveyancing is yet to be initiated but I have just had a quarterly service charge demand – Do I pay up?

It best that you discharge the invoice as normal because all ground rent and service charges will be apportioned on completion, so you will be reimbursed by the buyer for the period running from after the completion date to the next payment date. Most management companies will not acknowledge the buyer unless the service charges have been paid and are up to date so it is important for both buyer and seller for the seller to show that they are up to date. Having a clear account will assist your cause and will leave you no worse off financially.

I work for a long established estate agency in Alcester where we see a few leasehold sales put at risk due to short leases. I have been given contradictory information from local Alcester conveyancing firms. Please can you clarify whether the vendor of a flat can instigate the lease extension process for the buyer?

As long as the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to kick-start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or simultaneously with completion of the disposal of the property.

An alternative approach is to agree the lease extension with the freeholder either before or after the sale. If you are informally negotiating there are no rules and so you cannot insist on the landlord agreeing to grant an extension or transferring the benefit of an agreement to the buyer.

Do you have any top tips for leasehold conveyancing in Alcester with the purpose of speeding up the sale process?

  • A significant proportion of the frustration in leasehold conveyancing in Alcester can be reduced if you instruct lawyers the minute your agents start marketing the property and ask them to put together the leasehold documentation which will be required by the purchasers’ representatives.
  • The majority freeholders or Management Companies in Alcester charge for providing management packs for a leasehold premises. You or your lawyers should discover the fee that they propose to charge. The management pack can be applied for as soon as you have a buyer, thus reducing delays. The average time it takes to obtain the necessary information is three weeks. It is the most usual cause of delay in leasehold conveyancing in Alcester.
  • Some Alcester leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, you should notify your estate agents to make sure that the purchasers obtain financial (bank) and professional references. The bank reference will need to confirm that the buyers are financially capable of paying the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the service charge figures so that they can pass this information on to the buyers or their solicitors.
  • If there is a history of conflict with your landlord or managing agents it is very important that these are resolved prior to the flat being marketed. The purchasers and their solicitors will be reluctant to purchase a property where a dispute is unresolved. You will have to accept that you will have to discharge any arrears of service charge or resolve the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled prior to the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose particulars of the dispute to the purchasers, but it is clearly preferable to present the dispute as historic rather than ongoing.
  • If you have the benefit of shareholding in the freehold, you should make sure that you have the original share certificate. Arranging a duplicate share certificate is often a lengthy formality and slows down many a Alcester conveyancing transaction. If a new share is necessary, you should approach the company director and secretary or managing agents (if applicable) for this at the earliest opportunity.

    • If all goes to plan we aim to complete our sale of a £250000 flat in Alcester next week. The freeholder has quoted £372 for Certificate of Compliance, building insurance schedule and previous years statements of service charge. Is it legal for a freeholder to charge exorbitant fees for a leasehold conveyance in Alcester?

    Alcester conveyancing on leasehold apartments usually involves the buyer’s conveyancer submitting enquiries for the landlord to address. Although the landlord is not legally bound to answer these enquiries the majority will be willing to assist. They are at liberty levy a reasonable charge for answering enquiries or supplying documentation. There is no upper cap for such fees. The average costs for the paperwork that you are referring to is £350, in some cases it is in excess of £800. The management information fee demanded by the landlord must be accompanied by a summary of rights and obligations in relation to administration fees, otherwise the invoice is technically not due. In reality one has no option but to pay whatever is requested of you if you want to complete the sale of your home.

    In relation to leasehold conveyancing in Alcester what are the most frequent lease problems?

    Leasehold conveyancing in Alcester is not unique. All leases are unique and legal mistakes in the legal wording can sometimes mean that certain clauses are erroneous. For example, if your lease is missing any of the following, it could be defective:

    • Repairing obligations to or maintain parts of the building
    • A duty to insure the building
    • A provision for the recovery of money spent for the benefit of another party.
    • Maintenance charge proportions which don’t add up to the correct percentage

    A defective lease can cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Lloyds TSB Bank, Coventry Building Society, and Alliance & Leicester all have express conveyancing instructions when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease is defective they may refuse to grant the mortgage, obliging the purchaser to pull out.

    I am the registered owner of a 1 bedroom flat in Alcester, conveyancing having been completed in 2003. How much will my lease extension cost? Comparable flats in Alcester with an extended lease are worth £191,000. The average or mid-range amount of ground rent is £65 invoiced annually. The lease ceases on 21st October 2105

    With only 80 years unexpired we estimate the price of your lease extension to be between £8,600 and £9,800 plus costs.

    The suggested premium range that we have given is a general guide to costs for extending a lease, but we are not able to advice on the actual costs in the absence of detailed due diligence. Do not use the figures in tribunal or court proceedings. There are no doubt additional issues that need to be taken into account and you obviously want to be as accurate as possible in your negotiations. You should not move forward placing reliance on this information without first seeking the advice of a professional.

    Other Topics

    Lease Extensions in Alcester