Common questions relating to Canary Wharf leasehold conveyancing
I only have Fifty years unexpired on my flat in Canary Wharf. I now want to extend my lease but my freeholder is can not be found. What should I do?
On the basis that you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for for permission to dispense with the service of the initial notice. This will enable the lease to be granted an extra 90 years by the Court. You will be obliged to demonstrate that you or your lawyers have made all reasonable attempts to track down the landlord. For most situations a specialist would be useful to carry out a search and prepare a report which can be accepted by the court as proof that the freeholder is indeed missing. It is wise to seek advice from a solicitor in relation to devolving into the landlord’s disappearance and the application to the County Court covering Canary Wharf.
I am tempted by the attractive purchase price for a two flats in Canary Wharf both have in the region of 50 years unexpired on the lease term. Should I regard a short lease as a deal breaker?
There are no two ways about it. A leasehold flat in Canary Wharf is a wasting asset as a result of the shortening lease. The nearer the lease gets to zero years unexpired, the more it adversely affects the value of the premises. The majority of purchasers and lenders, leases with under 75 years become less and less attractive. On a more upbeat 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 a residence 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 Canary Wharf 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 They may agree to a smaller lump sum and an increase in the ground rent, but to shorter extension terms in return. 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 work for a long established estate agency in Canary Wharf where we see a number of flat sales jeopardised as a result of short leases. I have received contradictory information from local Canary Wharf conveyancing firms. Please can you shed some light as to whether the seller of a flat can instigate the lease extension formalities 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 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 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 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.
Can you offer any advice when it comes to choosing a Canary Wharf conveyancing practice to carry out our lease extension conveyancing?
If you are instructing a property lawyer for lease extension works (regardless if they are a Canary Wharf conveyancing firm) it is most important that they be familiar with the legislation and specialises in this area of work. We advise that you talk with two or three firms including non Canary Wharf conveyancing practices before you instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions could be useful:
- How experienced is the practice with lease extension legislation?
After months of dialogue we are unable to agree with our landlord on how much the lease extension should cost for our flat in Canary Wharf. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?
Where there is a absentee freeholder or if there is dispute about the premium for a lease extension, under the relevant statutes it is possible to make an application to the Leasehold Valuation Tribunal to arrive at the premium.
An example of a Freehold Enfranchisement case for a Canary Wharf premises is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case affected 3 flats. The the unexpired residue of the current lease was 101.61 years.
Are there frequently found defects that you see in leases for Canary Wharf properties?
There is nothing unique about leasehold conveyancing in Canary Wharf. All leases is drafted differently and drafting errors can sometimes mean that certain sections are missing. The following missing provisions could result in a defective lease:
- A provision to repair to or maintain parts of the property
- 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 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. Barclays , Barnsley Building Society, and Aldermore all have express requirements when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease is problematic they may refuse to provide security, forcing the purchaser to withdraw.
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