I have just started marketing my 2 bed flat in Barnard Castle.Conveyancing solicitors are to be appointed soon but I have just had a yearly service charge demand – what should I do?

The sensible thing to do is pay 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 until 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 am looking at a couple of maisonettes in Barnard Castle which have approximately 50 years unexpired on the leases. Will this present a problem?

There are no two ways about it. A leasehold apartment in Barnard Castle is a wasting asset as a result of the shortening lease. The closer the lease gets to its expiry date, the more it adversely affects the salability of the property. For most purchasers and mortgage companies, leases with less than 75 years become less and less attractive. 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 premises 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 property 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 Barnard Castle conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. More often than not it is possible to negotiate informally with the freeholder to extend 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.

Last month I purchased a leasehold house in Barnard Castle. Am I liable to pay service charges relating to a period prior to completion of my purchase?

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. However, your landlord may still be able to take action to forfeit the lease. A critical element 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).

Do you have any advice for leasehold conveyancing in Barnard Castle from the perspective of expediting the sale process?

• Much of the delay in leasehold conveyancing in Barnard Castle can be bypassed if you appoint lawyers as soon as your agents start marketing the property and ask them to put together the leasehold documentation which will be required by the purchasers’ lawyers.
• Many freeholders or Management Companies in Barnard Castle charge for providing management packs for a leasehold premises. You or your lawyers should find out the fee that they propose to charge. The management information sought on or before finding a buyer, thus reducing delays. The average time it takes to receive management information is three weeks. It is the most usual reason for delay in leasehold conveyancing in Barnard Castle.
• A minority of Barnard Castle leases require Landlord’s consent to the sale and approval of the buyers. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers put in hand bank and professional references. Any bank reference will need to confirm that the buyers are financially capable of paying the yearly 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 you have had any disputes with your freeholder 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 flat where there is a current dispute. You may need to swallow your pride and discharge any arrears of service charge or settle the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You will still have to reveal particulars of the dispute to the buyers, but it is better to present the dispute as over rather than unresolved.
• You may think that you are aware of the number of years left on your lease but it would be wise to verify this by asking your lawyers. A buyer’s conveyancer will be unlikely to recommend their client to proceed with the purchase of a leasehold property the lease term is under 75 years. In the circumstances it is important at an as soon as possible that you identify whether the lease for your property needs extending. If it does, contact your solicitors before you put your property on the market for sale.

What makes a Barnard Castle lease defective?

There is nothing unique about leasehold conveyancing in Barnard Castle. All leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain clauses are not included. The following missing provisions could result in a defective lease:

• Repairing obligations to or maintain parts of the building
• A duty to insure the building
• Clauses dealing with recovering service charges for expenditure on the building or common parts.
• Service charge per centages that don't add up correctly leaving a shortfall

You will encounter difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Halifax, Skipton Building Society, and Bank of Ireland 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.

Barnard Castle Leasehold Conveyancing - A selection of Queries Prior to Purchasing

Can you inform me if there are any major works on the horizon that will add a premium to the service charges?