I have just appointed agents to market my 2 bed apartment in Disley.Conveyancing is yet to be initiated but I have just had a half-yearly service charge invoice – should I leave it to the buyer to sort out?

The sensible thing to do is discharge 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 unless 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 am tempted by the attractive purchase price for a two flats in Disley which have about 50 years remaining on the leases. Will this present a problem?

There are plenty of short leases in Disley. The lease is a right to use the property for a period of time. As a lease shortens the marketability of the lease decreases and results in it becoming more expensive to extend the lease. This is why it is advisable to extend the lease term. More often than not it is difficult to sell a property with a short lease because mortgage lenders may be reluctant to lend money on such properties. Lease extension can be a protracted process. We advise that you get professional help from a solicitor and surveyor with experience in this arena

Last month I purchased a leasehold flat in Disley. Am I liable to pay service charges for periods before my ownership?

In a situation 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. However, 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).

I am a negotiator for a long established estate agency in Disley where we have experienced a number of leasehold sales put at risk due to leases having less than 80 years remaining. I have received conflicting advice from local Disley conveyancing solicitors. Could you confirm whether the seller of a flat can initiate the lease extension process for the buyer?

Provided that the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to kick-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 disposal of the property.

Alternatively, it may be possible 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 buyer.

Are there frequently found defects that you come across in leases for Disley properties?

There is nothing unique about leasehold conveyancing in Disley. Most leases are unique and drafting errors can sometimes mean that certain sections are erroneous. The following missing provisions could result in a defective lease:

• Repairing obligations to or maintain parts of the building
• A duty to insure the building
• A provision for the recovery of money spent for the benefit of another party.
• Service charge per centages that don't add up correctly leaving a shortfall

You could encounter a problem when selling your property if you have a defective lease as they can affect a potential buyer’s ability to obtain a mortgage. Santander, Virgin Money, and Nottingham Building Society all have express requirements when it comes to what is expected in a lease. If a mortgage lender believes that the lease is problematic they may refuse to provide security, forcing the purchaser to withdraw.

I acquired a ground floor flat in Disley, conveyancing formalities finalised half a dozen years ago. Can you let me have an estimated range of the fair premium for a lease extension? Similar properties in Disley with a long lease are worth £261,000. The ground rent is £65 per annum. The lease finishes on 21st October 2093

With only 68 years left to run we estimate the price of your lease extension to range between £10,500 and £12,000 plus plus your own and the landlord's "reasonable" professional fees.

The figure above a general guide to costs for renewing a lease, but we are not able to advice on a more accurate figure in the absence of detailed due diligence. Do not use this information in a Notice of Claim or as an informal offer. There are no doubt additional issues that need to be taken into account and clearly you want to be as accurate as possible in your negotiations. You should not move forward placing reliance on this information before seeking the advice of a professional.

Other Topics

Lease Extensions in Disley