Canvey Island leasehold conveyancing: Q and A’s
I am hoping to put an offer on a small detached house that seems to be perfect, at a reasonable price which is making it all the more appealing. I have just been informed that it's a leasehold as opposed to freehold. I would have thought that there are particular concerns buying a house with a leasehold title in Canvey Island. Conveyancing solicitors have not yet been appointed. Will they explain the issues?
Most houses in Canvey Island are freehold and not leasehold. This is one of the situations where having a local solicitor who is familiar with the area can help the conveyancing process. We note that you are buying in Canvey Island in which case you should be shopping around for a Canvey Island conveyancing practitioner and be sure that they have experience in advising on leasehold houses. First you will need to check the number of years remaining. Being a lessee you will not be entirely free to do whatever you want with the house. The lease comes with conditions such as obtaining the landlord’sconsent to carry out alterations. It may be necessary to pay a contribution towards the upkeep of the communal areas where the house is part of an estate. Your solicitor will advise you fully on all the issues.
I am attracted to a two flats in Canvey Island both have about forty five years unexpired on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold apartment in Canvey Island is a wasting asset as a result of the reducing lease term. The closer the lease gets to zero years unexpired, the more it adversely affects the marketability of the property. The majority of purchasers and banks, 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 premises 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 Canvey Island 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 work for a long established estate agent office in Canvey Island where we see a number of leasehold sales jeopardised as a result of leases having less than 80 years remaining. I have received conflicting advice from local Canvey Island conveyancing solicitors. Could you shed some light as to whether the vendor of a flat can initiate the lease extension process for the purchaser on completion of the sale?
Provided that the seller has been the owner 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 need not have to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or simultaneously with completion of the disposal of the property.
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 purchaser.
What are your top tips when it comes to appointing a Canvey Island conveyancing firm to carry out our lease extension conveyancing?
If you are instructing a solicitor for lease extension works (regardless if they are a Canvey Island conveyancing practice) it is essential that they be familiar with the legislation and specialises in this area of work. We advise that you speak with two or three firms including non Canvey Island conveyancing practices prior to instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions might be of use:
- Can they put you in touch with client in Canvey Island who can give a testimonial?
What are the common defects that you see in leases for Canvey Island properties?
There is nothing unique about leasehold conveyancing in Canvey Island. All leases are individual and drafting errors can sometimes mean that certain sections are erroneous. 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 building
- 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
You will encounter a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Nationwide Building Society, Skipton Building Society, and TSB 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 does not cover certain provisions they may refuse to provide security, forcing the purchaser to pull out.
I invested in buying a 1 bedroom flat in Canvey Island, conveyancing formalities finalised half a dozen years ago. Can you shed any light on how much the price could be for a 90 year extension to my lease? Comparable properties in Canvey Island with over 90 years remaining are worth £193,000. The average or mid-range amount of ground rent is £65 charged once a year. The lease ceases on 21st October 2073
You have 51 years unexpired the likely cost is going to be between £31,400 and £36,200 plus legals.
The figure that we have given is a general guide to costs for renewing a lease, but we are not able to provide the actual costs without more detailed due diligence. You should not use the figures in tribunal or court proceedings. There are no doubt other issues that need to be considered and you obviously should be as accurate as possible in your negotiations. You should not take any other action placing reliance on this information without first getting professional advice.