Expecting to sign contracts shortly on a studio apartment in Chinatown. Conveyancing lawyers inform me that they will have a report out to me tomorrow. What should I be looking out for?

Your report on title for your leasehold conveyancing in Chinatown should include some of the following:

• The length of the lease term You should be advised as what happens when the lease ends, and informed of the importance of not letting the lease term falling below eighty years
• Details of the parties to the lease, for example these could be the leaseholder (you), head lessor, landlord
• Are pets allowed in the flat?
• Whether the lease restricts you from renting out the flat, or working from home
• Whether your lease has a provision for a reserve fund?
• What you can do if a neighbour breach a clause of their lease?
• What the implications are if you breach a clause of your lease?

I am tempted by the attractive purchase price for a two flats in Chinatown which have in the region of fifty years unexpired on the leases. Should I regard a short lease as a deal breaker?

A lease is a right to use the property for a prescribed time frame. As the lease gets shorter the value of the lease deteriorate and it becomes more costly to acquire a lease extension. This is why it is often a good idea to extend the lease term. More often than not it is difficult to sell a property with a short lease as mortgage companies may be reluctant to lend money on such properties. Lease enfranchisement can be a difficult process. We advise that you seek professional assistance from a solicitor and surveyor with experience in this field

I am a negotiator for a long established estate agent office in Chinatown where we see a few flat sales jeopardised as a result of short leases. I have received contradictory information from local Chinatown conveyancing firms. Please can you shed some light as to whether the seller of a flat can start the lease extension formalities for the purchaser on completion of the sale?

Provided that 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. This means that the proposed purchaser can avoid having to sit tight for 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.

Do you have any advice for leasehold conveyancing in Chinatown from the perspective of expediting the sale process?

• Much of the frustration in leasehold conveyancing in Chinatown can be bypassed where you appoint lawyers the minute your agents start advertising the property and ask them to put together the leasehold documentation which will be required by the buyers conveyancers.
• Many freeholders or managing agents in Chinatown levy fees for supplying management packs for a leasehold property. You or your lawyers should discover the actual amount of the charges. The management information can be applied for on or before finding a buyer, thus accelerating the process. The average time it takes to receive management information is three weeks. It is the most usual reason for delay in leasehold conveyancing in Chinatown.
• Some Chinatown leases require Licence to Assign from the landlord. If this applies to your lease, it would be prudent to place the estate agents on notice to make sure that the purchasers obtain bank and professional references. Any 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 service charge figures so that they can pass this information on to the purchasers or their lawyers.
• If you have had conflict with your freeholder or managing agents it is very important that these are resolved prior to the flat being put on the market. The buyers and their solicitors will be concerned about purchasing a flat where there is a current dispute. You will have to accept that you will have to discharge any arrears of service charge or settle 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 will still have to reveal details of the dispute to the purchasers, but it is clearly preferable to reveal the dispute as historic rather than ongoing.
• If you hold a share in a the freehold, you should make sure that you have the original share certificate. Arranging a new share certificate can be a lengthy process and delays many a Chinatown conveyancing transaction. If a duplicate share is required, you should approach the company director and secretary or managing agents (if applicable) for this at the earliest opportunity.

I inherited a basement flat in Chinatown. Given that I can not reach agreement with the landlord, can the Leasehold valuation Tribunal make a decision on the sum payable for a lease extension?

Most definitely. We can put you in touch with a Chinatown conveyancing firm who can help.

An example of a Freehold Enfranchisement matter before the tribunal for a Chinatown flat is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case related to 2 flats. The the number of years remaining on the existing lease(s) was 73.92 years.

What makes a Chinatown lease unmortgageable?

There is nothing unique about leasehold conveyancing in Chinatown. All leases is drafted differently and legal mistakes in the legal wording can sometimes mean that 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
• A duty to insure the building
• A provision for the recovery of money spent for the benefit of another party.
• Maintenance charge proportions which don’t add up to the correct percentage

You could encounter difficulties when selling your property if you have a defective lease primarily because it impacts on the ability to obtain a mortgage on the property. Barclays , Chelsea Building Society, and Godiva Mortgages Ltd all have very detailed conveyancing instructions when it comes to what is expected in a lease. If a mortgage lender believes that the lease does not cover certain provisions they may refuse to provide security, obliging the purchaser to withdraw.

I inherited a 1 bedroom flat in Chinatown, conveyancing having been completed half a dozen years ago. Can you let me have an estimated range of the fair premium for a lease extension? Corresponding properties in Chinatown with an extended lease are worth £169,000. The ground rent is £45 invoiced annually. The lease comes to an end on 21st October 2076

With 50 years left to run the likely cost is going to span between £33,300 and £38,400 plus professional fees.

The figure above a general guide to costs for extending a lease, but we cannot give you a more accurate figure without more comprehensive due diligence. You should not use the figures in tribunal or court proceedings. There may be other concerns that need to be taken into account and clearly you want to be as accurate as possible in your negotiations. You should not take any other action based on this information without first getting professional advice.