Sample questions relating to Borth leasehold conveyancing
I am intending to rent out my leasehold flat in Borth. Conveyancing solicitor who did the purchase is retired - so can't ask her. Do I need to ask my freeholder for permission?
Your lease dictates the relationship between the freeholder and you the flat owner; in particular, it will say if subletting is prohibited, or permitted but only subject to certain conditions. The rule is that if the lease contains no specific ban or restriction, subletting is permitted. Most leases in Borth do not contain strict prohibition on subletting – such a clause would adversely affect the market value the flat. In most cases there is simply a requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.
I have recently realised that I have Sixty One years unexpired on my flat in Borth. I now want to get lease extension but my landlord is can not be found. What should I do?
If you meet the appropriate requirements, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for an order to dispense with the service of the initial notice. This will enable the lease to be lengthened by the magistrate. You will be obliged to demonstrate that you or your lawyers have done all that could be expected to track down the lessor. For most situations a specialist would be useful to try and locate and prepare a report which can be used as proof that the freeholder can not be located. It is advisable to get professional help from a conveyancer in relation to proving the landlord’s disappearance and the application to the County Court overseeing Borth.
I am tempted by the attractive purchase price for a couple of flats in Borth which have in the region of forty five years unexpired on the lease term. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold apartment in Borth is a wasting asset as a result of the shortening lease. The nearer the lease gets to its expiry date, the more it reduces the salability of the property. For most buyers and lenders, leases with less than eighty 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 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 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 Borth 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 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 any new 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 Borth. Do I have any liability for 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 agency in Borth where we see a number of leasehold sales jeopardised due to short leases. I have received inconsistent advice from local Borth conveyancing solicitors. Could you clarify whether the seller of a flat can start the lease extension process for the purchaser on completion of the sale?
Provided that 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 sit tight for 2 years to extend their lease. 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.
Alternatively, it may be possible 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.
I am the registered owner of a leasehold flat in Borth, conveyancing formalities finalised half a dozen years ago. Can you please calculate a probable premium for a statutory lease extension? Comparable flats in Borth with a long lease are worth £175,000. The average or mid-range amount of ground rent is £55 charged once a year. The lease terminates on 21st October 2103
With 80 years unexpired we estimate the price of your lease extension to be between £10,500 and £12,000 plus legals.
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 investigations. You should not use this information in tribunal or court proceedings. There may be other issues that need to be taken into account and clearly you want to be as accurate as possible in your negotiations. Please do not move forward placing reliance on this information before seeking the advice of a professional.