Glossop leasehold conveyancing: Q and A’s
My partner and I may need to rent out our Glossop basement flat for a while due to taking a sabbatical. We instructed a Glossop conveyancing firm in 2004 but they have closed and we did not have the foresight to seek any advice as to whether the lease prohibits the subletting of the flat. How do we find out?
The lease governs the relationship between the landlord and you the leaseholder; specifically, it will say if subletting is banned, or permitted but only subject to certain conditions. The rule is that if the lease contains no specific ban or restriction, subletting is allowed. Most leases in Glossop do not prevent an absolute prevention of subletting – such a provision would undoubtedly devalue the property. Instead, there is usually simply a requirement that the owner notifies the freeholder, possibly supplying a duplicate of the tenancy agreement.
I have just started marketing my ground floor apartment in Glossop.Conveyancing is yet to be initiated but I have just had a quarterly maintenance charge demand – Do I pay up?
The sensible thing to do is discharge the invoice 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 couple of maisonettes in Glossop which have approximately fifty years unexpired on the lease term. Will this present a problem?
There is no doubt about it. A leasehold flat in Glossop is a deteriorating asset as a result of the shortening lease. The nearer the lease gets to its expiry date, the more it adversely affects the value of the property. The majority of purchasers and mortgage companies, 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 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 Glossop 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 long established estate agent office in Glossop where we have experienced a number of flat sales put at risk due to short leases. I have been given inconsistent advice from local Glossop conveyancing firms. Could you clarify whether the owner of a flat can start the lease extension process for the buyer?
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 need not have to sit tight for 2 years for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment needs to be completed before, or at the same time as completion of the disposal of the property.
An alternative approach is 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 purchaser.
What are your top tips when it comes to finding a Glossop conveyancing practice to carry out our lease extension conveyancing?
If you are instructing a conveyancer for lease extension works (regardless if they are a Glossop conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of work. We suggested that you speak with two or three firms including non Glossop conveyancing practices prior to instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions could be of use:
- How experienced is the firm with lease extension legislation?
I inherited a ground floor flat in Glossop, conveyancing formalities finalised half a dozen years ago. Can you please calculate a probable premium for a statutory lease extension? Equivalent properties in Glossop with over 90 years remaining are worth £168,000. The average or mid-range amount of ground rent is £60 invoiced annually. The lease ends on 21st October 2073
You have 52 years remaining on your lease the likely cost is going to be between £29,500 and £34,000 as well as professional fees.
The suggested premium range that we have given is a general guide to costs for extending a lease, but we cannot give you the actual costs without more comprehensive due diligence. You should not use the figures in tribunal or court proceedings. There may be additional issues that need to be considered and clearly you should be as accurate as possible in your negotiations. Please do not move forward based on this information without first seeking the advice of a professional.