Examples of recent questions relating to leasehold conveyancing in Handsworth
I’m about to sell my basement flat in Handsworth.Conveyancing has not commenced but I have just received a yearly service charge invoice – what should I do?
Your conveyancing lawyer is likely to suggest that you should 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 flats in Handsworth which have in the region of 50 years left on the leases. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold apartment in Handsworth is a wasting asset as a result of the reducing lease term. The nearer the lease gets to zero years unexpired, the more it adversely affects the value of the premises. The majority of buyers and lenders, 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 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 Handsworth 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.
Last month I purchased a leasehold property in Handsworth. Do I have any liability for service charges for periods before completion of my purchase?
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 ensure 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 employed by a busy estate agent office in Handsworth where we have experienced a few flat sales derailed as a result of short leases. I have been given contradictory information from local Handsworth conveyancing firms. Please can you shed some light as to whether the owner 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 commence 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 for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or simultaneously with completion of the sale.
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.
What advice can you give us when it comes to choosing a Handsworth conveyancing firm to carry out our lease extension conveyancing?
When appointing a solicitor for lease extension works (regardless if they are a Handsworth conveyancing firm) it is imperative that they be familiar with the legislation and specialises in this area of work. We recommend that you make enquires with several firms including non Handsworth conveyancing practices prior to instructing a firm. If the firm is ALEP accredited then so much the better. Some following of questions could be of use:
- How familiar is the practice with lease extension legislation?
I purchased a basement flat in Handsworth, conveyancing having been completed 2006. Can you let me have an estimated range of the fair premium for a lease extension? Comparable flats in Handsworth with a long lease are worth £211,000. The ground rent is £65 levied per year. The lease finishes on 21st October 2102
With just 80 years remaining on your lease we estimate the premium for your lease extension to be between £8,600 and £9,800 plus plus your own and the landlord's "reasonable" professional fees.
The suggested premium range above a general guide to costs for extending a lease, but we cannot give you the actual costs in the absence of comprehensive due diligence. You should not use the figures in a Notice of Claim or as an informal offer. There may be additional concerns 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.