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Chorley leasehold conveyancing: Q and A’s

I’m about to sell my 2 bed flat in Chorley.Conveyancing is yet to be initiated but I have just had a yearly service charge demand – should I leave it to the buyer to sort out?

Your conveyancing lawyer is likely to suggest that you should clear the service charge 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 today plan to offer on a house that seems to tick a lot of boxes, at a reasonable price which is making it all the more appealing. I have just discovered 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 Chorley. Conveyancing lawyers have not yet been instructed. Will they explain the issues?

The majority of houses in Chorley are freehold and not leasehold. This is one of the situations where having a local solicitor used to dealing with such properties who can help the conveyancing process. it is apparent that you are purchasing in Chorley in which case you should be looking for a Chorley conveyancing solicitor and be sure that they are used to advising on leasehold houses. First you will need to check the unexpired lease term. As a leaseholder you will not be entirely free to do whatever you want to the property. The lease comes with conditions for example requiring the landlord’sconsent to conduct changes to the property. It may be necessary to pay a maintenance charge towards the upkeep of the communal areas where the property is located on an estate. Your solicitor should report to you on the legal implications.

I am a negotiator for a busy estate agency in Chorley where we see a few leasehold sales put at risk as a result of leases having less than 80 years remaining. I have received inconsistent advice from local Chorley conveyancing solicitors. Please can you shed some light as to whether the seller of a flat can instigate the lease extension process for the purchaser on completion of the sale?

As long as the seller has owned the lease for at least 2 years it is possible, to serve a Section 42 notice to start the lease extension process and assign the benefit of the notice to the purchaser. The benefit of this is that the proposed purchaser need not have to sit tight for 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or simultaneously with completion of the sale.

An alternative approach is 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.

Can you provide any top tips for leasehold conveyancing in Chorley with the purpose of expediting the sale process?

  • A significant proportion of the delay in leasehold conveyancing in Chorley can be reduced where you appoint lawyers as soon as you market your property and request that they start to put together the leasehold information needed by the purchasers’ conveyancers.
  • In the event that you altered the property did you need the Landlord’s approval? In particular have you installed wooden flooring? Most leases in Chorley state that internal structural changes or installing wooden flooring calls for a licence issued by the Landlord approving such alterations. Where you dont have the consents to hand do not contact the landlord without checking with your lawyer in the first instance.
  • A minority of Chorley 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 purchasers or their solicitors.
  • If there is a history of any disputes with your landlord or managing agents it is essential that these are resolved before the property is marketed. The purchasers and their solicitors will be reluctant to purchase a property where a dispute is unsettled. You will have to accept that you will have to 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 details of the dispute to the purchasers, but it is better to reveal the dispute as over rather than ongoing.
  • If you are supposed to have a share in the freehold, you should make sure that you have the original share certificate. Organising a duplicate share certificate can be a lengthy formality and frustrates many a Chorley home move. Where a reissued share is needed, you should approach the company officers or managing agents (if relevant) for this as soon as possible.

  • What makes a Chorley lease defective?

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

    • Repairing obligations to or maintain elements of the property
    • Insurance obligations
    • A provision for the recovery of money spent for the benefit of another party.
    • Service charge per centages that don't add up correctly leaving a shortfall

    A defective lease can cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Yorkshire Building Society, The Royal Bank of Scotland, and Britannia 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 is problematic they may refuse to grant the mortgage, forcing the buyer to withdraw.

    I purchased a 1st floor flat in Chorley, conveyancing was carried out 2009. Can you let me have an estimate of the premium that my landlord can legally expect in return for granting a renewal of my lease? Comparable properties in Chorley with a long lease are worth £195,000. The ground rent is £50 per annum. The lease comes to an end on 21st October 2077

    You have 56 years unexpired the likely cost is going to be between £25,700 and £29,600 plus professional fees.

    The figure above a general guide to costs for extending a lease, but we cannot give you a more accurate figure in the absence of comprehensive due diligence. You should not use this information in tribunal or court proceedings. There may be additional concerns that need to be considered and clearly you want to 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.

    Other Topics

    Lease Extensions in Chorley