I have recently realised that I have Seventy years left on my flat in City Of London. I now wish to get lease extension but my landlord is missing. What are my options?

On the basis that you qualify, 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 extended by the Court. You will be obliged to demonstrate that you or your lawyers have made all reasonable attempts to locate the landlord. In some cases an enquiry agent would be helpful to conduct investigations and prepare a report which can be used as evidence that the landlord can not be located. It is wise to seek advice from a conveyancer both on investigating the landlord’s absence and the vesting order request to the County Court covering City Of London.

I am hoping to exchange soon on a garden flat in City Of London. Conveyancing lawyers have said that they report fully next week. Are there areas in the report that I should be focusing on?

The report on title for your leasehold conveyancing in City Of London should include some of the following:

• You should receive a copy of the lease

I am looking at a two apartments in City Of London which have about fifty years left on the lease term. Will this present a problem?

There are no two ways about it. A leasehold apartment in City Of London is a wasting asset as a result of the reducing lease term. The nearer the lease gets to its expiry date, the more it adversely affects the marketability of the property. The majority of buyers and lenders, leases with less than eighty years become less and less attractive. On a more upbeat 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 property 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 City Of London 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 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've recently bought a leasehold house in City Of London. Do I have any liability for service charges relating to a period prior to my ownership?

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. Strange as it may seem, your landlord may still be able to take action to forfeit the lease. A critical element of leasehold conveyancing for your conveyancer to be sure 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).

What makes a City Of London lease unacceptable for security purposes?

Leasehold conveyancing in City Of London is not unique. Most leases is drafted differently and drafting errors can result in certain sections are wrong. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain elements of the property
• Insurance obligations
• Clauses dealing with recovering service charges for expenditure on the building or common parts.
• Maintenance charge proportions which don’t add up to the correct percentage

You could encounter difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Birmingham Midshires, Virgin Money, and Bank of Ireland all have very detailed requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease does not cover certain provisions they may refuse to provide security, forcing the purchaser to pull out.

City Of London Leasehold Conveyancing - Examples of Questions you should consider before buying

Is the freehold reversion owned jointly by the leaseholders? Can you tell me if there are any major works anticipated that will likely add a premium to the service fees? The prefered form of lease structure is a share of the freehold. In this situation the leaseholders have being in charge if their destiny and although a managing agent is usually retained if the building is larger than a house conversion, the managing agent retained by the leaseholders.

Other Topics

Lease Extensions in City Of London