I've recently bought a leasehold flat in Canary Wharf. Am I liable to pay service charges for periods before my ownership?

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 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 agent office in Canary Wharf where we have witnessed a few flat sales jeopardised due to leases having less than 80 years remaining. I have received inconsistent advice from local Canary Wharf conveyancing solicitors. Could you confirm whether the vendor of a flat can commence the lease extension formalities for the buyer?

Provided that the seller has owned the lease 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. The benefit of this is that the buyer need not have to wait 2 years to extend their lease. 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 disposal of the property.

Alternatively, it may be possible 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 appointing a Canary Wharf conveyancing firm to carry out our lease extension conveyancing?

When appointing a solicitor for your lease extension (regardless if they are a Canary Wharf conveyancing practice) it is imperative that he or she should be familiar with the legislation and specialises in this area of work. We recommend that you talk with several firms including non Canary Wharf conveyancing practices prior to instructing a firm. Where the conveyancing practice is ALEP accredited then so much the better. Some following of questions might be of use:

• How many lease extensions has the firm carried out in Canary Wharf in the last year?

All being well we will complete the sale of our £250000 garden flat in Canary Wharf in 10 days. The landlords agents has quoted £312 for Certificate of Compliance, building insurance schedule and previous years service charge statements. Is the landlord entitled to charge exorbitant fees for a leasehold conveyance in Canary Wharf?

Canary Wharf conveyancing on leasehold apartments usually necessitates the buyer’s conveyancer submitting questions for the landlord to address. Although the landlord is not legally bound to respond to these enquiries the majority will be willing to assist. They may charge a reasonable charge for responding to enquiries or supplying documentation. There is no upper cap for such fees. The average fee for the information that you are referring to is over three hundred pounds, in some transactions it is above £800. The administration charge levied by the landlord must be accompanied by a synopsis of rights and obligations in relation to administration fees, without which the charge is technically not due. In reality you have no option but to pay whatever is demanded should you wish to exchange contracts with the buyer.

Having spent years of correspondence we simply can't 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 landlord or where there is dispute about the premium for a lease extension, under the Leasehold Reform, Housing and Urban Development Act 1993 it is possible to make an application to the First-tier Tribunal (Property Chamber) to assess the price.

An example of a Freehold Enfranchisement matter before the tribunal for a Canary Wharf flat 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 related to 3 flats. The unexpired lease term was 101.61 years.

What makes a Canary Wharf lease problematic?

There is nothing unique about leasehold conveyancing in Canary Wharf. Most leases is drafted differently and legal mistakes in the legal wording can result in certain clauses are wrong. For example, if your lease is missing any of the following, it could be defective:

• A provision to repair to or maintain elements of the building
• Insurance obligations
• 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

A defective lease will likely cause problems when trying to sell a property as they can affect a potential buyer’s ability to obtain a mortgage. Halifax, Norwich and Peterborough Building Society, and TSB all have express conveyancing instructions when it comes to what is expected in a lease. If a mortgage lender believes that the lease is defective they may refuse to grant the mortgage, forcing the purchaser to pull out.

Other Topics

Lease Extensions in Canary Wharf