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Questions and Answers: Hebburn leasehold conveyancing

Back In 2008, I bought a leasehold house in Hebburn. Conveyancing and Lloyds TSB Bank mortgage went though with no issue. I have received a letter from someone saying they have taken over the freehold. Attached was a demand for arrears of ground rent dating back to 1995. The conveyancing solicitor in Hebburn who previously acted has long since retired.Any advice?

First contact the Land Registry to make sure that this person is in fact the new freeholder. It is not necessary to instruct a Hebburn conveyancing solicitor to do this as you can do this on the Land Registry website for £3. Rest assured that in any event, even if this is the rightful landlord, under the Limitation Act 1980 the limitation period for recovery of ground rent is six years.

I am attracted to a couple of maisonettes in Hebburn both have in the region of fifty years unexpired on the leases. Should I regard a short lease as a deal breaker?

There are no two ways about it. A leasehold flat in Hebburn is a deteriorating asset as a result of the reducing lease term. The closer the lease gets to its expiry date, the more it adversely affects the marketability of the premises. The majority of buyers and mortgage companies, leases with less than 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 Hebburn 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 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 any new 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've recently bought a leasehold house in Hebburn. Am I liable to pay service charges relating to a period prior to completion of my purchase?

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 reputable estate agency in Hebburn where we have experienced a few flat sales derailed due to leases having less than 80 years remaining. I have received inconsistent advice from local Hebburn conveyancing firms. Could you clarify whether the seller of a flat can start 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 commence 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 for a lease extension. Both sets of lawyers will agree to form of assignment. The assignment has to be done prior to, or at the same time as completion of the sale.

An alternative approach is 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 purchaser.

Do you have any top tips for leasehold conveyancing in Hebburn from the perspective of expediting the sale process?

  • A significant proportion of the frustration in leasehold conveyancing in Hebburn can be reduced if you instruct lawyers as soon as your agents start advertising the property and ask them to collate the leasehold information which will be required by the purchasers’ representatives.
  • The majority landlords or Management Companies in Hebburn charge for supplying management packs for a leasehold property. You or your lawyers should discover the fee that they propose to charge. The management pack can be applied for on or before finding a buyer, thus reducing delays. The average time it takes to obtain the necessary information is three weeks. It is the most usual reason for frustration in leasehold conveyancing in Hebburn.
  • If you have carried out any alterations to the residence would they have required Landlord’s permission? In particular have you laid down wooden flooring? Hebburn leases often stipulate that internal structural alterations or addition of wooden flooring necessitate a licence issued by the Landlord acquiescing to such changes. If you fail to have the consents in place do not contact the landlord without checking with your conveyancer first.
  • A minority of Hebburn leases require Landlord’s consent to the sale and approval of the buyers. If this is the case, you should place the estate agents on notice to make sure that the purchasers obtain financial (bank) and professional references. The bank reference should make it clear that the buyer is financially capable of paying the annual service charge and the actual amount of the service charge should be quoted in the bank’s letter. You will therefore need to provide your estate agents with the actual amount of the service charge so that they can pass this information on to the purchasers or their solicitors.
  • If you have had conflict with your freeholder or managing agents it is very important that these are settled before the property is put on the market. The purchasers and their solicitors will be nervous about purchasing a flat where there is an ongoing dispute. You will have to accept that you will have to discharge any arrears of service charge or resolve the dispute prior to the buyers completing the purchase. It is therefore preferable to have any dispute settled ahead of the contract papers being issued to the buyers’ solicitors. You are still duty bound to disclose details of the dispute to the purchasers, but it is better to present the dispute as over rather than unresolved.

    • Leasehold Conveyancing in Hebburn - Sample of Queries Prior to Purchasing

      Best to be warned whether changing the roof or some other major work is anticipated that will be shared amongst the leaseholders and will materially increase the the maintenance charges or result in a specific invoice. Does the lease include onerous restrictions? On the whole the cost for major works are not included within service charges, albeit that some managing agents in Hebburn ask leaseholders to pay into a sinking fund and this is used to offset against major repairs or maintenance.

    Other Topics

    Lease Extensions in Hebburn