Estate agents have just been given the go-ahead to market my ground floor apartment in City Of London.Conveyancing lawyers have not yet been instructed but I have just received a quarterly service charge demand – Do I pay up?

The sensible thing to do is pay 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 own a leasehold flat in City Of London. Conveyancing and Halifax mortgage went though with no issue. I have received a letter from someone saying they have taken over the freehold. It included a demand for arrears of ground rent dating back to 1996. The conveyancing solicitor in City Of London who acted for me is not around.Do I pay?

The first thing you should do is make enquiries of HMLR to be sure that the individual purporting to own the freehold is indeed the registered owner of the freehold reversion. There is no need to incur the fees of a City Of London conveyancing firm to do this as it can be done on-line for a few pound. Rest assured that regardless, even if this is the legitimate freeholder, under the Limitation Act 1980 no more than 6 years of rent can be collected.

I am looking at a couple of flats in City Of London both have about fifty years left on the leases. should I be concerned?

There is no doubt about it. A leasehold flat in City Of London is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it adversely affects the marketability of the premises. For most purchasers and banks, leases with under 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 property 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.

Last month I purchased a leasehold property in City Of London. Do I have any liability for service charges for periods before completion of my purchase?

Where the service charge has already been demanded from the previous lessee 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).

Completion in due on the sale of our £200000 maisonette in City Of London on Wednesday in a week. The landlords agents has quoted £360 for Certificate of Compliance, building insurance schedule and 3 years service charge statements. Is the landlord entitled to charge an administration fee for a flat conveyance in City Of London?

City Of London conveyancing on leasehold apartments more often than not involves the buyer’s conveyancer submitting enquiries for the landlord to answer. Although the landlord is under no legal obligation to answer such questions most will be willing to do so. They may invoice a reasonable charge for responding to questions or supplying documentation. There is no set fee. The average fee for the paperwork that you are referring to is over three hundred pounds, in some transactions it exceeds £800. The management information fee levied by the landlord must be sent together with a summary of entitlements and obligations in relation to administration charges, otherwise the charge is technically not due. In reality you have no option but to pay whatever is requested of you if you want to complete the sale of your home.

City Of London Conveyancing for Leasehold Flats - Sample of Questions you should consider before buying

Many City Of London leasehold properties will have a service bill for the upkeep of the block invoiced on behalf of the management company. Where you acquire the property you will have to meet this contribution, normally in instalments accross the year. This could be anything from several hundred pounds to thousands of pounds for blocks with lifts and large communal areas. There will also be a ground rent for you to pay yearly, this is usually not a large figure, say approximately £50-£100 but you need to enquire it because on occasion it could be many hundreds of pounds. Best to be warned if window replacement or some other major work is due in the foreseeable future that will be shared by the leasehold owners and could well dramatically impact the level of the maintenance costs or require a one off payment. How much is the maintenance charge and ground rent on the flat?

Other Topics

Lease Extensions in City Of London