Cardiff Bay leasehold conveyancing: Q and A’s
I am tempted by the attractive purchase price for a couple of maisonettes in Cardiff Bay both have in the region of fifty years left on the leases. Should I regard a short lease as a deal breaker?
A lease is a legal document that entitles you to use the premises for a prescribed time frame. As a lease gets shorter the saleability of the lease decreases and it becomes more expensive to acquire a lease extension. For this reason it is generally wise to extend the lease term. More often than not it is difficult to sell a property with a short lease because mortgage lenders may be reluctant to lend money on properties of this type. Lease extension can be a protracted process. We recommend you seek professional help from a conveyancer and surveyor with experience in this field
I've recently bought a leasehold property in Cardiff Bay. 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 owner 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. 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 am employed by a reputable estate agency in Cardiff Bay where we have witnessed a number of leasehold sales put at risk due to short leases. I have received inconsistent advice from local Cardiff Bay conveyancing firms. Can you clarify whether the seller of a flat can commence the lease extension process for the buyer?
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 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 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 buyer.
What advice can you give us when it comes to finding a Cardiff Bay conveyancing firm to deal with our lease extension?
When appointing a solicitor for your lease extension (regardless if they are a Cardiff Bay conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of conveyancing. We recommend that you speak with two or three firms including non Cardiff Bay conveyancing practices before you instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions might be helpful:
- If the firm is not ALEP accredited then why not?
In relation to leasehold conveyancing in Cardiff Bay what are the most common lease problems?
There is nothing unique about leasehold conveyancing in Cardiff Bay. All leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain sections are wrong. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain parts of the property
- 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 primarily because it impacts on the ability to obtain a mortgage on the property. Barclays , Barnsley Building Society, and Aldermore 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 does not cover certain provisions they may refuse to provide security, forcing the buyer to withdraw.
Cardiff Bay Leasehold Conveyancing - Examples of Queries before Purchasing
The best form of lease structure is a share of the freehold. In this situation the tenants have control and although a managing agent is frequently employed where it is larger than a house conversion, the managing agent is directed by the tenants.
How many of the leaseholders are in arrears for their maintenance charge payments?
What is the name of the managing agents?