Questions and Answers: Amersham leasehold conveyancing
I am looking at a couple of flats in Amersham which have in the region of 50 years left on the leases. Should I regard a short lease as a deal breaker?
There is no doubt about it. A leasehold apartment in Amersham is a wasting asset as a result of the reducing lease term. The closer the lease gets to its expiry date, the more it reduces the marketability of the premises. The majority of purchasers and mortgage companies, leases with under eighty years become less and less attractive. On a more upbeat note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the property for two years (unlike a Section 13 notice for purchasing the freehold, when leaseholders can participate from day one of ownership). When successful, they will have the right to an extension of 90 years to the current term and ground rent is effectively reduced to zero. Before moving forward with a purchase of a residence with a short lease term remaining you should talk to a solicitor specialising in lease extensions and leasehold enfranchisement. We are are happy to put you in touch with Amersham conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending the lease They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. You need to ensure that the agreed terms represent good long-term value compared with the standard benefits of the Section 42 Notice and that onerous clauses are not inserted into any redrafting of the lease.
I've recently bought a leasehold property in Amersham. Do I have any liability for service charges relating to a period prior to my ownership?
Where the service charge has already been demanded from the previous owner and they have not paid you would not usually be personally liable for the arrears. Strange as it may seem, your landlord may still be able to take action to forfeit the lease. It is an essential part of leasehold conveyancing for your conveyancer to be sure to have an up to date clear service charge receipt before completion of your purchase. If you have a mortgage this is likely to be a requirement of your lender.
If you purchase part way through an accounting year you may be liable for charges not yet demanded even if they relate to a period prior to your purchase. In such circumstances your conveyancer would normally arrange for the seller to set aside some money to cover their part of the period (usually called a service charge retention).
I am a negotiator for a long established estate agency in Amersham where we have experienced a few leasehold sales derailed due to short leases. I have been given inconsistent advice from local Amersham conveyancing firms. Could you shed some light as to whether the owner of a flat can initiate the lease extension process for the purchaser on completion of the sale?
As long as the seller has owned the lease 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 need not have to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or simultaneously with completion of the sale.
An alternative approach is to extend the lease informally by agreement with the landlord 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.
We expect to complete the sale of our £125000 apartment in Amersham in just under a week. The landlords agents has quoted £408 for Certificate of Compliance, insurance certificate and 3 years statements of service charge. Is it legal for a freeholder to charge exorbitant fees for a leasehold conveyance in Amersham?
Amersham conveyancing on leasehold flats normally necessitates the purchaser’s conveyancer submitting questions for the landlord to address. Although the landlord is under no legal obligation to address such questions most will be content to do so. They are entitled levy a reasonable charge for answering enquiries or supplying documentation. There is no set fee. The average fee for the paperwork that you are referring to is over three hundred pounds, in some transactions it exceeds £800. The administration charge required by the landlord must be sent together with a summary of entitlements and obligations in respect of administration charges, otherwise the charge is technically not due. In reality you have little choice but to pay whatever is requested of you should you wish to exchange contracts with the buyer.
When it comes to leasehold conveyancing in Amersham what are the most frequent lease problems?
Leasehold conveyancing in Amersham is not unique. All leases are individual 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:
- A provision to repair to or maintain elements of the premises
- 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
You may have a problem when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Yorkshire Building Society, Barnsley Building Society, and Bank of Ireland all have very detailed requirements 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 provide security, obliging the purchaser to withdraw.
I acquired a leasehold flat in Amersham, conveyancing was carried out in 2004. Can you give me give me an indication of the likely cost of a lease extension? Similar properties in Amersham with over 90 years remaining are worth £200,000. The ground rent is £60 charged once a year. The lease finishes on 21st October 2094
With just 73 years unexpired we estimate the premium for your lease extension to be between £10,500 and £12,000 plus legals.
The suggested premium range above a general guide to costs for renewing a lease, but we are not able to advice on a more accurate figure without more comprehensive investigations. Do not use this information in tribunal or court proceedings. There are no doubt other concerns that need to be considered and you obviously should be as accurate as possible in your negotiations. Please do not move forward based on this information before seeking the advice of a professional.