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Recently asked questions relating to Derby leasehold conveyancing

My husband and I may need to sub-let our Derby basement flat temporarily due to a career opportunity. We instructed a Derby conveyancing firm in 2001 but they have closed and we did not have the foresight to get any guidance as to whether the lease prohibits the subletting of the flat. How do we find out?

A lease dictates the relationship between the freeholder and you the leaseholder; in particular, it will say if subletting is banned, or permitted but only subject to certain conditions. The accepted inference is that if the lease contains no specific ban or restriction, subletting is allowed. Most leases in Derby do not contain subletting altogether – such a provision would adversely affect the market value the property. Instead, there is usually simply a requirement that the owner notifies the freeholder, possibly supplying a copy of the tenancy agreement.

I am looking at a two maisonettes in Derby which have about forty five years remaining on the leases. Will this present a problem?

There is no doubt about it. A leasehold flat in Derby is a wasting asset as a result of the reducing lease term. The closer the lease gets to zero years unexpired, the more it adversely affects the value of the property. For most buyers and mortgage companies, leases with less than 75 years become less and less marketable. 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 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 premises 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 Derby conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending 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 Derby. Do I have any liability for service charges for periods before 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. It is an essential part 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).

We expect to complete the sale of our £425000 maisonette in Derby on Thursday in a week. The freeholder has quoted £348 for Certificate of Compliance, insurance certificate and 3 years statements of service charge. Is it legal for a freeholder to charge an administration fee for a leasehold conveyance in Derby?

For the majority of leasehold sales in Derby conveyancing will involve, questions about the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :

  • Completing pre-contract questions
  • Where consent is required before sale in Derby
  • Supplying insurance information
  • Deeds of covenant upon sale
  • Registering of the assignment of the change of lessee after a sale
Your conveyancer will have no control over the level of the charges for this information but the average costs for the information for Derby leasehold premises is £350. For Derby conveyancing transactions it is customary for the seller to pay for these costs. The landlord or their agents are under no legal obligation to answer such questions most will be willing to do so - albeit often at exorbitant prices where the fees bear little relation to the work involved. Unfortunately there is no law that requires fixed charges for administrative tasks. Neither is there any legal time frame by which they are required to supply the information.

What makes a Derby lease problematic?

Leasehold conveyancing in Derby is not unique. All leases is drafted differently and legal mistakes in the legal wording can result in certain sections are not included. 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 building
  • A duty to insure the building
  • 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

A defective lease will likely cause issues when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Nationwide Building Society, Barnsley Building Society, and Godiva Mortgages Ltd 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 is problematic they may refuse to grant the mortgage, obliging the buyer to pull out.

Derby Conveyancing for Leasehold Flats - Examples of Questions you should ask before buying

    The best form of lease arrangement is if the freehold title is owned by the leaseholders. In this arrangement the tenants enjoy being in charge if their destiny and even though a managing agent is frequently employed where the building is larger than a house conversion, the managing agent acts for the leaseholders themselves. You should want to discover as much as you can concerning the company managing the block as they can either make life much easier or problematic. Being a leasehold owner you will be in the clutches of the managing agents from a financial perspective and when it comes to daily matters such as the tidiness of the common parts. Enquire of prospective neighbours whether they are happy with them. Finally, investigate as to the dates that the service fees are due to the managing agents and specifically how they are spending the funds. Where a Derby lease has no more than 80 years it will have adverse implications on the marketability of the flat. It is worth checking with your lender that they are happy with the length of the lease. A short lease means that you will most likely have to extend the lease sooner rather than later and it is worth discovering how much this would cost. Remember, in most cases you would need to own the premises for two years in order to be eligible to extend the lease.

Other Topics

Lease Extensions in Derby