I today plan to offer on a house that seems to tick a lot of boxes, at a great price which is making it all the more appealing. I have since discovered that it's a leasehold rather than freehold. I am assuming that there are issues buying a leasehold house in City Of London. Conveyancing advisers have are about to be instructed. Will my lawyers set out the risks of buying a leasehold house in City Of London ?

Most houses in City Of London are freehold rather than leasehold. In this scenario it’s worth having a local solicitor used to dealing with such properties who can assist with the conveyancing process. It is clear that you are purchasing in City Of London so you should seriously consider looking for a City Of London conveyancing practitioner and be sure that they have experience in dealing with leasehold houses. First you will need to check the unexpired lease term. Being a leaseholder you will not be entirely free to do whatever you want with the house. The lease will likely included provisions such as requiring the freeholder’spermission to carry out changes to the property. You may also be required to pay a contribution towards the maintenance of the estate where the house is located on an estate. Your conveyancer will report to you on the legal implications.

I own a leasehold house in City Of London. Conveyancing and Chelsea Building Society mortgage went though with no issue. A letter has just been received from someone claiming to own the freehold. It included a demand for arrears of ground rent dating back to 1991. The conveyancing solicitor in City Of London who previously acted has long since retired.Any advice?

First contact HMLR to make sure that the individual claiming to own the freehold is in fact the new freeholder. It is not necessary to incur the fees of a City Of London conveyancing firm to do this as you can do this on the Land Registry website for a few pound. You should note that regardless, even if this is the legitimate landlord, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.

I am employed by a long established estate agent office in City Of London where we have witnessed a few flat sales jeopardised as a result of leases having less than 80 years remaining. I have received contradictory information from local City Of London conveyancing firms. Can you clarify whether the seller of a flat can instigate the lease extension formalities for the purchaser on completion of the sale?

As long as the seller has been the owner 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. This means that the proposed purchaser can avoid having to wait 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed prior to, or at the same time as 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 offer any advice when it comes to choosing a City Of London conveyancing practice to carry out our lease extension conveyancing?

If you are instructing a conveyancer for lease extension works (regardless if they are a City Of London conveyancing practice) it is most important that he or she should be familiar with the legislation and specialises in this area of conveyancing. We suggested that you talk with several firms including non City Of London conveyancing practices before you instructing a firm. If the firm is ALEP accredited then that’s a bonus. Some following of questions could be helpful:

• How familiar is the practice with lease extension legislation?

Are there common defects that you encounter in leases for City Of London properties?

There is nothing unique about leasehold conveyancing in City Of London. Most leases is drafted differently and drafting errors can result in certain sections are erroneous. The following missing provisions could result in a defective lease:

• A provision to repair to or maintain elements of the property
• 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 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. Nationwide Building Society, The Royal Bank of Scotland, and Clydesdale 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 pull out.

Leasehold Conveyancing in City Of London - A selection of Queries Prior to Purchasing

The prefered form of lease structure is if the freehold reversion is in the ownership of the leaseholders. In this situation the lessees benefit from being in charge if their destiny and although a managing agent is often employed if it is larger than a house conversion, the managing agent acts for the leaseholders themselves. The answer will be helpful as a) areas can cause problems for the building as the communal areas may begin to deteriorate where repairs are not paid for b) if the tenants have an issue with the managing agents you will need to have complete disclosure Does the lease contain onerous restrictions?

Other Topics

Lease Extensions in City Of London