Examples of recent questions relating to leasehold conveyancing in Derby
Estate agents have just been given the go-ahead to market my basement flat in Derby.Conveyancing solicitors are to be appointed soon but I have just received a yearly service charge demand – Do I pay up?
It best that you 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. This will smooth the conveyancing process.
I am looking at a couple of flats in Derby which have approximately forty five years left on the leases. Will this present a problem?
There are no two ways about it. A leasehold apartment in Derby is a deteriorating asset as a result of the shortening lease. The nearer the lease gets to its expiry date, the more it reduces the value of the premises. For most purchasers and banks, leases with under 75 years become less and less marketable. 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 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 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. More often than not it is possible to negotiate informally with the freeholder to extend the lease You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. 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 work for a busy estate agent office in Derby where we have experienced a few flat sales put at risk as a result of short leases. I have received conflicting advice from local Derby conveyancing firms. Could you confirm whether the vendor of a flat can start the lease extension formalities 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 buyer can avoid having to sit tight for 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or at the same time as completion of the sale.
Alternatively, it may be possible to agree the lease extension with the freeholder 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 buyer.
What are your top tips when it comes to finding a Derby conveyancing practice to carry out our lease extension conveyancing?
When appointing a conveyancer for your lease extension (regardless if they are a Derby conveyancing firm) it is imperative that they be familiar with the legislation and specialises in this area of conveyancing. We recommend that you talk with two or three firms including non Derby conveyancing practices before you instructing a firm. Where the conveyancing practice is ALEP accredited then that’s a bonus. Some following of questions could be helpful:
- How experienced is the firm with lease extension legislation?
What makes a Derby lease unmortgageable?
Leasehold conveyancing in Derby is not unique. All leases are individual and legal mistakes in the legal wording can result in certain provisions 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 premises
- 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 could have difficulties when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Birmingham Midshires, Virgin Money, and Alliance & Leicester all have very detailed 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 defective they may refuse to provide security, obliging the buyer to withdraw.
I own a split level flat in Derby, conveyancing formalities finalised 2010. Can you shed any light on how much the price could be for a 90 year extension to my lease? Similar properties in Derby with a long lease are worth £250,000. The ground rent is £60 invoiced annually. The lease expires on 21st October 2090
With 70 years remaining on your lease we estimate the price of your lease extension to be between £12,400 and £14,200 plus plus your own and the landlord's "reasonable" professional fees.
The figure that we have given is a general guide to costs for renewing a lease, but we cannot give you the actual costs in the absence of comprehensive due diligence. Do not use the figures in tribunal or court proceedings. There are no doubt other issues 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 based on this information without first seeking the advice of a professional.