I am attracted to a couple of apartments in Bargoed which have in the region of fifty years left on the leases. Will this present a problem?

There are no two ways about it. A leasehold flat in Bargoed is a wasting asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it reduces the value of the premises. For most buyers and lenders, leases with under 75 years become less and less marketable. On a more positive 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 Bargoed 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 You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. 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 house in Bargoed. Am I liable to pay service charges for periods before completion of my purchase?

In a situation where the service charge has already been demanded from the previous lessee 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 ensure 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 work for a reputable estate agent office in Bargoed where we see a number of leasehold sales put at risk due to leases having less than 80 years remaining. I have received inconsistent advice from local Bargoed conveyancing firms. Could you shed some light as to whether the vendor of a flat can initiate the lease extension formalities for the buyer?

As long as the seller has owned the lease for at least 2 years it is possible, to serve a Section 42 notice to commence the lease extension process and assign the benefit of the notice to the purchaser. This means that the buyer can avoid having to wait 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or at the same time as completion of the sale.

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.

Can you offer any advice when it comes to choosing a Bargoed conveyancing firm to carry out our lease extension conveyancing?

If you are instructing a property lawyer for your lease extension (regardless if they are a Bargoed conveyancing practice) it is most important that they be familiar with the legislation and specialises in this area of conveyancing. We recommend that you speak with several firms including non Bargoed conveyancing practices before you instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions might be of use:

• If they are not ALEP accredited then why not?

Are there frequently found defects that you see in leases for Bargoed properties?

Leasehold conveyancing in Bargoed is not unique. All leases is drafted differently and drafting errors can sometimes mean that certain provisions are missing. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain parts of the premises
• Insurance obligations
• 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 will likely cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Lloyds TSB Bank, The Royal Bank of Scotland, and Alliance & Leicester all have express 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 grant the mortgage, obliging the purchaser to pull out.

I own a studio flat in Bargoed, conveyancing was carried out 2012. Can you shed any light on how much the price could be for a 90 year extension to my lease? Equivalent flats in Bargoed with an extended lease are worth £176,000. The average or mid-range amount of ground rent is £55 levied per year. The lease expires on 21st October 2097

With just 72 years left to run we estimate the premium for your lease extension to be between £8,600 and £9,800 plus costs.

The figure that we have given is a general guide to costs for renewing a lease, but we cannot give you the actual costs without more comprehensive due diligence. Do not use the figures in a Notice of Claim or as an informal offer. There are no doubt additional concerns that need to be considered and clearly you should be as accurate as possible in your negotiations. Neither should you take any other action placing reliance on this information before seeking the advice of a professional.

Other Topics

Lease Extensions in Bargoed